by Shaheen Darr

Created on: May 07, 2010   Last Updated: November 20, 2010

A hung Parliament is formed when no political party has the majority of seats in a general election. In the current 2010 British elections, out of a total of 650 seats, one party would have to win 326 seats to have an overall majority. If this does not happen, a coalition government would have to be formed between two parties to create the number of MPs required to vote in the House of Commons.

Britain’s last hung parliament was formed in 1974 when neither Labour nor the Conservatives had an overall majority of seats in the elections and the Labour leader Harold Wilson was invited by the Queen to form a minority government.  

There are disadvantages of a hung parliament in the decision making process as obtaining support to pass laws from the other parties could prove difficult. This is the case when parties have conflicting views on issues that concern how the country should be run and as the Conservative leader, David Cameron put it, in a hung parliament, politicians "haggle and bicker and scheme" making the whole decision making process quite difficult.

According to the statement given by the current Prime Minister, Gordon Brown, this afternoon, there is a ‘real and pressing’ possibility of a hung parliament in Britain. With more pressing problems that need to be discussed like Greece’s economic woes and the G7 conference call regarding the Euro area, he is willing to discuss with the Liberal Democrat leader, Nick Clegg, areas where there can be some measure of agreement. These include economic and political stability, voting systems reforms and how to work together for Britain's national good.

Meanwhile, the Liberal Democrat leader, Nick Clegg expressed his disappointment with the outcome of his party during the election. Despite this setback,  he too has put national interest as a priority for the party that has the majority of seats. This rules the Labour party out and it is the Conservative party towards which he has shown his support in achieving this.

In his speech at St Steven’s Club this afternoon, David Cameron, the Conservative leader, also confirmed that his party had fallen short of obtaining the majority of votes, making a hung parliament a possibility. The main areas his party will target will be economic recovery and restoring faith in Britain’s political, social and voting systems. While stressing the advantage of having a minority Conservative government he also showed interest in working with Nick Clegg to tackle Britain’s problems. While there were differences in some of their policies, there were areas of mutual ground where they could come to a compromise for the good of the country. The priority was dealing with Britain's deficit and ensuring that it has a strong and stable government to do this.   

The scenario of a hung parliament is creating uncertainty in the financial markets as has been seen in the weakening sterling in the foreign exchange markets. Losing confidence in sterling by foreign investors could force the government to push up interest rates resulting in increasing mortgage costs and other lending rates. With the economy already reeling from recession, this could create even more problems for the country though Fredrik Nerbrand, head of global investment strategy at HSBC Private Bank, said: “A hung or balanced government is not necessarily such a bad thing. Many countries manage to get along quite well with them …..”

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