As Brown Steps Down, “An Extraordinary Bidding War” Breaks Out For Rule Of England

May 10, 2010 2 Comments ›› Pat Dollard

Times Online:

Britain’s government became the subject of an extraordinary bidding war last night after Gordon Brown announced his intention to resign in an audacious attempt to keep Labour in power.

In a three-sided poker game being played out across Westminster, Mr Brown threw his last card, dramatically opening the possibility of a deal with the Liberal Democrats that would dash David Cameron’s hopes of making it to Downing Street. Within hours, the Conservative leader had stepped up his offer to Nick Clegg, inviting him into full coalition with the promise of a referendum on changing the voting system.

The Lib Dem leader now appears certain to be heading into the Cabinet, along with some senior colleagues, by the end of the week, but with the identity of the prime minister in his gift.

Mr Clegg consulted his MPs about whether to swing towards Mr Cameron or Labour — initially under Mr Brown followed in the autumn by a successor elected by the Labour Party, who would be the second Prime Minister in a row to take office without being elected by voters. The meeting broke up at 12.35am without agreement. Mr Clegg will meet his MPs again today.

A Lab-Lib deal would require a “rainbow coalition” including Scottish and Welsh nationalists, non-Unionists, one Green and an Ulster independent to enjoy a Commons majority.

Mr Clegg said that Mr Brown’s decision to resign was “an important element which could help ensure a smooth transition to the stable government that everyone deserves”. David Miliband emerged as the bookmakers’ favourite, but candidates will not campaign until coalition talks are resolved.

Mr Brown’s bombshell interrupted a day that had started with Mr Cameron apparently heading to No 10 with the support of the Liberal Democrats although short of a full coalition.

Unknown to the Tories, Downing Street had opened “back channels” to senior Lib Dems including the former party leaders Lord Ashdown of Norton-sub-Hamdon, Charles Kennedy and Sir Menzies Campbell.

Vince Cable, Mr Clegg’s deputy, had also made it clear to No 10 that the Liberal Democrats “did not want to jump into bed” with the Conservatives.

It emerged that a Labour negotiating team, including Lord Mandelson, Ed Balls, Ed Miliband and Lord Adonis, met the Lib Dems on Saturday to scope out common ground. The latest twists came on a dramatic day when:

· Labour’s negotiating team held “positive and constructive” talks with the Liberal Democrats;

· Mr Clegg met his MPs twice and the party’s federal executive, Mr Cameron met his Shadow Cabinet twice and addressed all Tory MPs, and Mr Brown called a Cabinet meeting with barely an hour’s notice;

· Sterling slumped on the assumption that a Lab-Lib administration would be slower to tackle public sector finances;

· William Hague said that the Tories were prepared to go “the extra mile” and offer a referendum on the alternative vote (AV) system as part of their “final offer”. Labour may offer a legislative route to AV without a referendum.

The developments threatened trouble for all three parties. Labour figures warned Mr Brown that a Lab-Lib coalition would be a disaster and that the party should accept the election result. Senior Tories said that the AV system would mean dozens of Tories losing their seats and shut the party out of power. Mr Clegg was told he faced resignations if he did a deal with the Tories.

Mr Brown said that the election result had shown that no single leader had been able to win the full support of the country and that it could be “in the interests of the whole country to form a progressive coalition government”.

Liberal Democrats said that he had removed a “stumbling block” to a possible deal. Ministers stressed that the overlap in policy was much more obvious with Labour than the Tories.

Key to talks between Labour and the Lib Dems is whether the voting system could be changed in early legislation without a referendum.

Mr Brown’s announcement threatened to expose Labour’s own divisions over electoral reform and coalition politics. Jack Straw, the Justice Secretary, is believed to have warned the party that it should accept the voters’ verdict rather than be seen clinging to power.

Some suspect that a concerted operation is under way to push David Miliband forward. Alan Johnson, the Home Secretary, is among a number of senior Cabinet ministers ready to back Mr Miliband over the next few days.