British Prime Minister Gordon Brown announced on Monday that he intended to resign and said his Labour Party would hold formal talks on forming a possible coalition government with the Liberal Democrats.
REUTERS - British Prime Minister Gordon Brown said on Monday he would step down this year to try to give his Labour Party a chance of forming a government with the smaller Liberal Democrats after an inconclusive election.
The Lib Dems are already talking to the Conservatives about governing together, but Brown said in a statement delivered in front of his official residence at 10 Downing Street the Lib Dems now also wanted to talk to Labour.
The centre-right Conservatives, led by David Cameron, won most seats in parliament but fell short of a majority in the election last Thursday.
Labour, in power since 1997, came second and the Liberal Democrats, led by Nick Clegg, a distant third.
Gordon Brown speaks to the press
“Mr Clegg has just informed me that while he intends to continue his dialogue that he has begun with the Conservatives, he now wishes also to take forward formal discussions with the Labour Party,” Brown said, adding that he would facilitate that.
“I have no desire to stay in my position longer than is needed to ensure the path to economic growth is assured, and the process of political reform we have agreed moves forward quickly,” Brown said.
“As leader of my party I must accept that that (the election result) is a judgment on me. I therefore intend to ask the Labour Party to set in train the processes needed for its own leadership election,” he said.
Brown did not give a precise time frame for his departure—effectively sacrificing himself to shore up his party—but said he hoped it would happen by the time of the annual Labour Party conference, which is scheduled for late September.
Spanner in the works
Brown’s announcement could make it easier for Labour to lure the Lib Dems away from the Conservatives, since Clegg had signalled strongly during the election campaign that he did not wish to keep the unpopular Brown in office.
“I think it makes it much more possible for the Lib Dems to do a deal with Labour. It throws a massive spanner in the works for the Conservatives,” said Julia Margo, director of research at the left-leaning Demos think-tank.
“It’s going to be a very messy government whichever way you play it. Another election in October is what I’ve got my money on.”
It is by no means certain that Brown’s departure will be enough to clinch a Labour/Lib Dem agreement. The scenario is fraught with difficulties for Clegg and the two parties combined would fall short of an outright majority.
Many politicians have said it would be anti-democratic for another Labour figure who was not a candidate to be prime minister during the election campaign to tak
e over in mid-term.
Britain’s sterling currency fell and government bond futures hit a session low after Brown’s comments. Markets had been hoping for a quick deal between the Conservatives and Lib Dems and will not relish the prospect of further delays as parallel talks take place between the Lib Dems and Labour.
“This twist is disappointing for markets which want a quick resolution to this uncertainty,” said David Owen, chief European financial economist at Jefferies.
“Markets were keener on the idea of a Tory (Conservative) government with Lib Dem support, largely because there is a perception they would cut the deficit sooner.”
UK General Election Results
Conservative: 306 seats
36.1% of the vote
Labour: 258 seats
29.1% of the vote
Liberal Democrats: 57 seats
23.0% of the vote
Seats needed for a majority: 326
649 of 650 seats declared
Britain’s budget deficit is running at over 11 percent of national output, raising fears that the country could lose its top-notch credit rating and get into debt difficulties. The markets want to see quick and aggressive action on the deficit.
The three main parties agree that the deficit should be tackled, but disagree about the timing. The Conservatives say they would start immediately, while Labour and the Lib Dems say they would wait until a fragile recovery was consolidated.
Brown’s decision to step down is an extraordinary move from a dogged politician. He was a powerful finance minister for 10 years when Tony Blair was prime minister, but it was an open secret then that Brown wanted the top job.
Relations between the pair were famously tense and at long last, Blair stood aside for Brown in 2007, during his third term. Last week was the first time Brown led Labour into an election.
Date created : 2010-05-10