Conservatives try for coalition after UK election

LONDON, (Reuters) – Britain’s opposition Conservatives  offered coalition talks to the Liberal Democrats today after  a dramatic parliamentary election produced no outright majority,  the first time this has happened in Britain since 1974.

The centre-right Conservatives won the most seats in the  650-seat House of Commons, comfortably ahead of the ruling  centre-left Labour Party but not in overall control. The  centrist Liberal Democrats came a distant third.

Prime Minister Gordon Brown remained in office in a  caretaker role pending the emergence of a new government, in  accordance with British constitutional convention.

He said the Conservatives and Liberal Democrats had every  right to try to do a deal first but was ready to talk to the Lib  Dems about a possible agreement if discussions failed.

Yesterday’s poll, marred by scenes of anger as hundreds of  voters were unable to cast their ballots due to administrative  problems, left none of the three big parties satisfied.

The Conservatives came tantalisingly close to an outright  win but were left at the mercy of smaller parties. Ahead in the  polls by double digits for most of last year, they saw their  lead shrink in recent months despite voter fatigue with Labour.

For Labour, hopes of extending their 13 years in office  looked tenuous, while a predicted Lib Dem surge did not happen.

With results in 649 out of the 650 parliamentary  constituencies declared, the Conservatives had won 306 seats,  followed by Labour on 258 and the Lib Dems on 57.

“A STRONG BASIS FOR A STRONG GOVERNMENT”

Conservative leader David Cameron said Britain urgently  needed a strong government to reassure jittery markets that it  was serious about tackling the country’s record budget deficit,  which exceeds 11 percent of national output.

“No government will be in the national interest unless it  deals with the biggest threat to our national interest, and that  is the deficit. We remain completely convinced that starting to  deal with the deficit this year is essential,” Cameron said.

The Conservatives were in power for most of the 20th century  but they lost three successive elections to Labour from 1997.  Cameron is under intense pressure to lead them back into office.

He said one possibility was a minority Conservative  government seeking support from other parties issue by issue,  but he would also offer the Lib Dems a more formal agreement,   which could include coalition government. This is extremely rare  in British politics.

“I want to make a big, open and comprehensive offer to the  Liberal Democrats,” he said. “I think we have a strong basis for  a strong government.”

Possible areas of agreement included reforming tax and  electoral systems and reversing a planned increase in payroll  tax, Cameron said, signalling that the Conservatives would be  less open to compromise on European and defence issues.

Cameron has said he would make deeper and faster spending  cuts than Labour or the Liberal Democrats, who have both warned  this would harm a fragile recovery.

His statement went some way to calming investor fears of  political deadlock and British government bonds briefly erased  their earlier losses after he spoke — the latest lurch on a  volatile day.

Sterling also recovered partly from an earlier fall.

BROWN HOLDS OUT CARROT TO LIB DEMS

The Lib Dems, whose leader Nick Clegg had stated earlier  that the Conservatives should have the first shot at forming a  government, said after Cameron’s statement that it was time for  a “breather” and Clegg would not speak publicly again today.

Clegg and Cameron spoke later on the phone but no deal is  expected imminently. The Lib Dems are expected to discuss any  proposals on a deal internally tomorrow.   Appearing earlier outside his Downing Street residence,  Brown said that if the two opposition parties could not clinch a  deal, he stood ready to talk to the Lib Dems. He dangled an  offer of electoral reform, a key Lib Dem demand.

A coalition with the Lib Dems is Brown’s last hope of  holding onto power.    The BBC calculated the Conservatives had taken 36 percent of  the overall vote, Labour 29 percent and the Lib Dems 23 percent.

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