An agreement has been reached according to sky news.

[JustBlameSue]

Between Tories and Lib Dems. No real details as yet.

i don't think it is the media putting on false pressure - there is a genuine need to come up with a stable gov't as quickly as possible.

i genuinely think there is a possibility you get a Lib/Lab coalition that becomes completely unworkable as the last few days have shown that this sort of horse-trading doesn't make for good governance. You will have this coalition for a few months, with another unelected PM and in that period (until a next election is called), you can have a serious run on the pound, the UK markets collapse (it's down 1.8% now - i guarantee you - if a Lib/Lab coalition is announced today - the market will crater) which means lower value of your pensions etc, and nobody making a serious dent on the budget deficit - because surprise, surprise, the labour party leaders will be too busy with their leadership contest to give a damn about national interests. Oh, forgive me, the market is now down 1.9%.

Hilarious that it is all going down to PR/eletoral reform. I didn't realise this was the most pressing agenda for the electorate -- given it didn't feature much during the campaigns and the debates - and if it mattered SOOOO much to the majority of people - it is shocking that the Lib Dems actually LOST seats. But clearly, this IS the most pressing issue - so never mind we are bankrupt and the display of the last few days actually is the best argument why "working together" as Mr Clegg so sweetly put it during the debates fails to enthrall me given the current display.

PR probably matters more now that there is real potential for it

Well I do agree with you that no one with the name Balls should run the country. Think of the headlines when it all goes tits up.

But Page62

the reality is that nothing is going to bring 100% stability - It is easy to make an argument that

a Lib/Con coalition won't be stable or workable in the long term

that a Conservative minority government won't work at all

It's not just a Lib/Lab coalition which is vulnerable

If i wasn't so scared of a run on the pound, i almost wish Cameron would just say off you go then Brown holds fort for an orderly transition (by the way, do people HONESTLY think that if the man so rejected by the electorate manages to cling on for 5 more months that there is no possibility he might have a change of heart down the road) -- it is unworkable. The english will take the brunt of the cuts as the support of the Scottish is vital as every vote counts. By the time a proper, workable gov't is finally elected, the fiscal situation would be much worse and the most vulnerable people that Labour promises to look after are actually (as usual) the ones who pay the price the most.
complete shambles -- even the BBC can't help but put the question of "how can you look the electorate in the eye...." - never mind hey, they might get PR which the electorate was really secretly craving for above everything else

The markets know no loyalty do they? There could be a run on the pound at ANY TIME, as I'm sure you know.

I do feel the need just to say though, that GB is acting absolutely correctly. The constitution says he has to stay as PM until someone else can form a government. He has announced that he will resign as head of the Labour party. It's good he hasn't gone today - otherwise there'd be NOBODY IN CHARGE! The markets wouldn't like that!

The Tories have failed to win a majority, and have to see if they can form a government - that's what they're trying to do aren't they?

Was pointed out somewhere (blog or press but can't remember) that Labour have never had so many 'rebel' MPs.

And that many of them have campaigned in this election as an MP who will put their constituents above their Party when it comes to voting.

How would that work with a teeny tiny majority?

Ahundredtimes

A Lib/Cons coalition would give 363 seats, 37 seats clear of a majority

A Lib/Lab coalition would give 315 seats, 9 seats short of a majority

it doesn't take a maths genius to work out which combination gives a stable majority that all these parties purport to aim for in the interest of the nation.

I wouldn't mind it so much if the Lib Dems just came out to say "right, we only get one shot at this, this is what we have been praying for all these years. i think it is unrealistic for people to think we won't act first in the interest of our party so we will extract the best deal we can it might mean a torrid time for the next 12 months for everyone else but guys, we have waited sooooo long, so please understand why we are doing this surely, 23% of you agreed with us right?". If you're going to behave in a completely self serving way, at least have the balls to admit it.

Yes because the Conservative Party are sooo altruistic aren't they

I'm just not sure they are being entirely self-serving.

Well not any more self-serving than every other person negotiating for any of the parties

Is difficult to make an argument that any negotiator has the good of the country at heart! I'm sure the Tory negotiators are compromising left, right and centre in the 'scrabble' to get power - they're desperate for it. And that desperation really not altruistic

I think the degrees of vulnerability thing is true. They're all pretty vulnerable really

ah, never said the Tory party is being altruistic. they at least have the most seats and don't use the argument that PR would have changed that. the electorate knew the system prior to voting if they hated the system soooooo much - it would have been top of the agenda and the Lib Dems would have registered an IMPROVEMENT in their poll standing. but they didn't -- but somehow they speak for ALL of us now. i'm really glad about that.

It would be interesting to see what the Lib Dems sacrifice in their manifesto to get PR 1) NI exemption for first £10k, 2) scrapping ID cards, 3) Trident, 4) pupil premium, 5) Europe? arguably, the things they are more known for given the debates never mind, they will get PR on behalf of their supporters whahey [hmmm].

it is a mess. the only thing i want is a stable majority and the simple maths suggest this can only be achieved via a Lib Dem/Cons coalition one where the nation doesn't have to hold its breath if an MP is in hospital/abroad on holiday/etc everytime a vote is being passed.

But it'll fracture that coalition because they are so far apart on so many things, unless everyone works out how coalition parliaments work - which will mean having to grow up very quickly, and probably too big a cultural shift too quickly - and stop wetting their pants about it.

I can't see them in a coalition. I can see them doing the supply and demand thing though

Cameron has totally failed to win a majority when he should have. You could argue that he has created this instability by totally failing to WALK an election that should have been his for the taking. . .

Page62 - they publically stated 4 key things they would insist on for a coalition.

As far as I can tell from the press its electoral reform (STV not AV) that is the only one causing trouble with the Tories. Why don't they just agree to put it to the public in a referendum? Let the public decide if the majority of us want it or not.

Perhaps if we look at the each alternative (feel free to add pros and cons)

Conservatives rule as Minority

1. danger of not getting through the Queens speech 2)inability to get financial stuff through parliament 3)Markets would be very very uncertain with no 2)

Labour rule as Minority
Prob not worth discussing?

Conservative/LibDem rule

1. very very unhappy lib dem voters
2. most stable government
3. Conservatives got more popular votes than the other individual parties 4)Conservatives very opposed to PR

Labour/LibDem/OtherParties rule

1. Pissed off tories 2)Some pissed off Lib Dems 3)Who would be PM? 4)Unstable government? 5)Economy?????? 6)More people voted not Tory than Tory overall. 7)Labour have made some wobble towards PR

I have tried not to put my Lib Dem Bias on to the above. I believe it is right for the parties to negotiate with each other. It is probably too public though which makes it look bad. (mind you it is fascinating viewing)

oh you bad kitten

I think there would be more pissed off lib dems with lib/lab than lib/con.

The labour party themselves don't want lib/lab they want to be in opposition and let the tories sort out the mess. The only labour people trying to negotiate are a couple of individuals desperate to be PM now gordon has gone.

The country as a whole wants tory/lib or con go alone. Labour have been voted out.

If the cons go alone there will be another election and the lib dems will all lose their seats so the lib dem mps need to get a grip and sign a 4 yr deal with the tories today.

Or they could risk tories go it alone, another election tories have bigger mandate lib dems disappear, election in 4 yrs and labour are back.

BadKitten, great summary. I think a Lib-Lab pact is frankly hopeless right now. I can't see how it can work given that it will take until September for a new leader to emerge. My bet is that if it happens it will collapse messily hence a new election, hence Cameron sitting pretty with a bigger majority. Whereas a Con-Lib pact will stop Cameron sweeping back in with an even bigger lead in 12 months; the Lds may be able ot rein in thier wackier notions....

I know many of you hate the talk of what the markets are doing but looking at the Gilt (K debt) market it has been going up steadily since 11.00 am and is now nearly as high as it was at its peak yesterday just before GB spoke.

If I were a betting man I would say the markets are acting as if they expect a Lib-Con agreement.

EDIT: Gilt (UK debt) market

about the variation on GILT, yesterday Peston was saying it went down slightly because being a less attractive market, it took second place to the newly recovered European post rescue package and a little to do with Uk internal politics - I off course know nothing about it apart from the comments I heard

Lib/Con, Lib/Lab, Lib/Con..........what a kerfuffle. Taking libs innit

Saw this little beauty in the Sun today

So actually, their poll said; which gov't would you like to see?

Lib/Lab 39% (?)
Lib/Con 33%
Con min 20%

Do you want PR?

Yes 47%
No 38%

Still, at least they mentioned they'd done a poll this time...

Right there with you on PR really not being the biggest priority...I?m betting most people didn?t vote LD for PR. Be honest now!

The LDs need to think about their procedures. Have a ¾ majority and the Exec is nice in theory but right now it?s a critical delay.

So the options
Conservatives rule as Minority

1. danger of not getting through the Queens speech 2)inability to get financial stuff through parliament 3)Markets would be very very uncertain with no 2)

4. Labour come back bigger and badder than ever with ammo against the Conservatives and the Lib Dems
5. The Lib Dems lose all credibility because they can?t get a coalition to work, or they look like they?re whinging because the others wouldn?t play nice
6. Inability to get a lot of things through Parliament, not just the finances, which mean nothing really gets done
7. Could do irreparable damage to the Conservatives if (when) they fail

Labour rule as Minority
Prob not worth discussing?

Conservative/LibDem rule

1. very very unhappy lib dem voters
2. most stable government
3. Conservatives got more popular votes than the other individual parties 4)Conservatives very opposed to PR

5. Effective majority on the budget
6. ?best of both? manifestos
7. Probably referendum on electoral reform
8. Lib Dems get seats on the cabinet in a formal coalition and prove that they can govern effectively
9. Scotland VERY unhappy ? could raise the West Lothian question
10. Markets tentatively seem to like it
11. Some key issues (under confidence and supply) will be sorted either with Lib Dem support or Labour - see the handy Venn diagram

Labour/LibDem/OtherParties rule

1. Pissed off tories 2)Some pissed off Lib Dems 3)Who would be PM? 4)Unstable government? 5)Economy?????? 6)More people voted not Tory than Tory overall. 7)Labour have made some wobble towards PR

8. Highly unstable coalition held to ransom by the Nationalists
9. Lib Dems have a lot of power over Labour
10. Scotland and Wales are happy, voters in Henley-on-Thames are very upet (see the BBC for details)