In just under two days time, we shall we find out which party or parties will sit and rule in Westminster for the next 5 years. As the polls are as close as ever and no party seems to hold a significant majority, all results point to a hung parliament. As of Sunday, May 3rd, the average of all the polls looks like this: Labour: 33%, Conservative: 33.6%, UKIP 13.8%, Lib Dem 8.3%, Green 5.1%. (The data is taken from: YouGov, Populus, Opinium, ComRes, Survation, Ipsos MORI, ICM, TNS-BMRB).

This morning Conservative MPs have stated that current Prime Minister and Party Leader David Cameron may not be the man to lead the party in the next parliament if he fails to deliver the required seats in this election, while Ed Miliband has called on the unions once to again to get him out of trouble. Tensions are building. Nerves are fraying.

Lots of possible coalitions have been touted – Conservative & Liberal Democrat, Labour & Lib Dem, Labour & SNP, even Conservative & UKIP. A second Conservative led Liberal Democrat coalition may well be the most plausible and logical option. Ironically, if the Conservatives had been more open to changing the current voting system (first past the post) to something that resembled ‘Proportionally Representation’ (or AV as it was termed during the campaign) earlier in 2011, they may found themselves with a greater share of the vote.

So what happens while potential governments or coalitions are formed?

The Cabinet Manual, a rule book of sorts, was drafted by the former cabinet secretary Gus O’Donnell a few months before the 2010 election, and was revised the following year. Its guidance on constitutional matters, is at best, vague however. The Cabinet Manual states merely that if there is no outright majority, the parliamentary parties should “seek to determine and communicate clearly to the sovereign…who is best placed to be able to command the confidence of the House of Commons.” That person will then be invited by the Queen to become prime minister, and form the new government.

In the case of a hung parliament, the party with the largest percentage of the vote (which does not necessarily mean the most MPs in the House of Commons due to the way constituency boundaries are drawn), will be given the opportunity to form a government. The goal is to assemble an alliance in parliament that can count on the support of at least 326 MPs. Any government that is formed needs to retain “the confidence of the House of Commons” for it to function. Without the support of a majority of parliament’s 650 elected members, an executive is not considered capable of functioning.

The incumbent prime minister “can, and should, remain in office until it is clear whether he, or the leader of the opposition, can form an administration which commands the confidence of the House of Commons.” Even if they lose their seats, ministers remain ministers, although their powers are reduced. According to the Cabinet Manual, a caretaker government may make no decisions that would bind a new government. That rules out any new policies, appointments or big contracts. It must also consult the opposition parties if decisions cannot be put off.

There however is a side story that we need to seriously consider.

The Fixed-term Parliaments Act received royal assent on 15th September 2011 and came into force on that day. The Act has a major impact on the timing of parliamentary elections in the UK as the Act sets the date of the next general election as 7 May 2015 and on the first Thursday in May in every fifth year thereafter.

The Act goes on to state that early elections can be held only:

• If a motion for an early general election is agreed either by at least two-thirds of the whole House or without division or;
• If a motion of no confidence is passed and no alternative government is confirmed by the Commons within 14 days.

The Act applies until it is repealed, so future Parliaments will now operate on a five year cycle.

The important line then is “if a motion of no confidence is passed and no alternative government is confirmed by the Commons within 14 days.” In the current political context of a potential hung parliament, if a coalition is formed and by September for example it receives a vote of no-confidence from the house, not only will it cease to be the governing executive power but a snap General Election will not follow. This is because, any party leader, elected to the Commons now has 14 days to try and form another government.

This could well mean that we could see a succession of failed coalitions before the public are allowed to vote again. It could seriouly damage the economy as confidence in the financial markets will be shaken. On the other hand, when a Snap General Election does finally occur, it may well benefit the main parties as voters may return to home them in order to vote in a strong and stable government.

Interestingly, whichever coalition is formed, it is unlikely to have the same majority that made the current one quite effective in governing. The current Conservative – Liberal Democrat coalition has a majority of about 80 MPs in the house. This was enough to account for any rebels in their own camps and to overcome significant opposition from Labour and other minority parties in the house. It is very likely that any coalition that does form will have a majority of only 30 – 40 MPs hampering their ability to pass new laws or amendments to past ones.

We here at Delany & Co have previously explored (in our analysis of the March Budget 2015 and which party promises the most for the UK’s tech industry) and concluded that a Conservative – Liberal Democrat coalition would best serve the interests of the technology industry in the UK. This not only based on their manifesto pledges, but also because of their success in promoting the tech industry and their record together in government. Even if you are not a fan of either party, it is surely better to choose the devil you know, than the devil you don’t.

Photo Credit: CitiBlog – Milton Keynes News