The Guardian
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Parties continue talks on UK coalition govt


UNCERTAINTY over the new government in Britain continued yesterday as the Conservatives disclosed that they held good discussions with the Liberal Democrats but failed to conclude a deal to govern together. Further talks are to resume within 24 hours.

David Cameron’s Conservatives won the most seats in Thursday’s parliamentary election but fell short of a majority and are seeking the support of Nick Clegg’s third-placed Liberal Democrats, or Lib Dems, to end 13 years of Labour Party rule.

“We are agreed that a central part of any agreement that we make will be economic stability and the reduction of the public deficit,” Conservative negotiator, William Hague said after close to seven hours of talks with a team of Lib Dems.

Hague said the sides would meet again within 24 hours and in the meantime would brief the party leaders, Cameron and Clegg.

Emerging from the government building where the talks took place minutes after Hague, Lib Dem spokesman, Danny Alexander, made almost identical comments.

Prime Minister Gordon Brown, whose Labour came a distant second in the election, remains in office in a caretaker role. He stands ready to try for an alliance with the center-left Lib Dems if they are unable to agree with the Conservatives.

Clegg appeared to be keeping his options open, with news emerging that while the Conservative-Lib Dem talks were going on, he met in secret with Brown at a nearby location.

“The two met this afternoon at the Foreign Office to update each other. They had an amicable discussion. David Cameron was aware that they were meeting,” said a Liberal Democrat spokesman.

But Brown’s position appeared precarious, with three of his own party’s legislators calling on him to step down.

The election was the first since 1974 to give no party overall control. It has come at a time when Britain’s budget deficit is running at a peacetime record of more than 11 percent of national output – very unnerving to financial markets.

Markets want to see a stable government emerge quickly and start aggressively cutting the deficit.

Analysts said the comments on tackling the deficit might buy the parties some time to do a deal, but that a sell-off could follow if rapid progress was not made.

“It really has to be sorted by Monday night. Of course, the markets might also help bring some of the backbench MPs in line and make them accept whatever offer is on the table,” said David Lea, Western Europe analyst with Control Risks.

A major stumbling block to a Conservative/Lib Dem deal could be electoral reform, a long-cherished ambition of the Lib Dems who would win far more seats if Britain switched from its winner-takes-all system to proportional representation.

Opinion polls in yesterday’s newspapers suggested most Britons favoured a more proportional system of voting, but the center-right Conservatives are firmly opposed to such a change.

The parties must overcome other differences on economic policy, defence, immigration and Britain’s stance toward Europe, but they could find common ground on issues such as lower taxes for the poor, education and the environment.

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