David Cameron and Nick Clegg close in on agreement
Tories and Lib Dems edge towards sharing government, but deadlock remains over voting system reform
Nick Clegg and David Cameron were edging towards an agreement over the formation of the next government last night, but were still struggling to find common ground over the deal-breaking issue of reforming Britain's voting system.
A day of high drama, which saw secret meetings take place in Whitehall and desperate phone calls made between party leaders, ended without resolution.
Senior Tories and Liberal Democrats will meet again today to hammer out a deal which would finally allow Mr Cameron to enter Downing Street. Mr Cameron will set out the details in a meeting with his new band of MPs in the Commons today.
The Tory leader yesterday dangled the prospect of several cabinet jobs to the Liberal Democrats, but both sides believe a looser agreement is more likely.
Gordon Brown left Downing Street for an hour-long meeting with Mr Clegg as he manoeuvred to make him an offer should talks with the Tories collapse. But it could be the last role of the dice for the Prime Minister, who consulted his most trusted allies yesterday over his own position.
A series of “back channel” negotiations were taking place across the weekend between the parties. One source familiar with the discussions said a broad anti-Tory coalition was a serious option — but depended on Labour having a new leader.
He said: “Propping up Gordon Brown would be toxic, but once he goes things become much easier. The arithmetic is very much possible.”
Politicians in all parties fear the failure to form a stable government may see the pound damaged as the markets open this morning. However, the Liberal Democrats vowed not to be rushed into an inferior deal with the Tories because of the market volatility. One said last night: “We're not interested in some sort of sticking-plaster solution.”
Emerging from five-and-a-half hours of talks at the Cabinet Office in Whitehall, both parties said discussions had been productive, with Britain's record deficit taking a prominent role.
However, the parties seemed little closer to agreeing on electoral reform. Yesterday, dissent within the Liberal Democrat ranks began to build amid signs they would not be offered a serious concession on the issue from Mr Cameron.
The Tories look set to offer a free vote in the Commons on changing the voting system, a move that would almost certainly see the Lib Dems' desire for proportional representation voted down.
Mr Clegg has been warned by senior colleagues of the pitfalls of conceding ground. “This [electoral reform] is virtually the only issue that will be at the forefront of any discussion with the Conservatives,” one Lib Dem frontbencher said last night. “No substantial deal can be made that doesn't progress this issue forward. It's not going to be handed to us on a plate but it is something that we are intent on fighting for.”
A senior Conservative confirmed last night that the two sides were still far apart on electoral reform, but insisted that Mr Cameron believed the distance could be narrowed. He said: “David is negotiating in good faith — he is hungry for power and so are the people around him.”
Mr Clegg found himself wooed by both Tory and Labour leaders yesterday. He spoke to Mr Cameron by phone as their teams of negotiators continued talks.
He was then asked to attend a face-to-face meeting with Mr Brown at the Foreign Office.
It is thought an 11th-hour agreement with Labour would include an immediate commitment on a referendum on the “alternative vote” system, with further discussions on a second public vote on proportional representation.
Some kind of deal with the Tories remains the most likely outcome.
Emerging from the talks yesterday evening, William Hague, the shadow Foreign Secretary, said the negotiations had been “very positive and productive”.
He also listed key areas of agreement, with electoral reform notably absent. “The issues we have covered have included political reform, economic issues and the reduction of the deficit, banking reform, civil liberties, environmental issues.
“We've had good discussions about all of those areas. We intend to meet again over the next 24 hours. We are agreed that a central part of any agreement that we make will be economic stability and a reduction of the budget deficit.”
Danny Alexander, Mr Clegg's chief of staff, gave an even briefer statement. “We're agreed that any agreement made will have deficit reduction and economic stability at its heart,” he said. Both sides then reconvened in Portcullis House, part of the Westminster estate.
Some big hitters in the party were keen to leave the door open for a last-ditch deal with Mr Brown. “Our party is very suspicious of the Tory party being able to deliver,” said Simon Hughes, the party's climate change spokesman. “If [a deal with the Tories] isn't possible, then of course it is both constitutionally proper but also logical that we would then talk to the other of the three major parties, which is the Labour Party,” he said. “Now, they appear more accommodating on these things. They may be more willing to be helpful.”