Wow! Cazart! Cowabunga!

In a day of high drama and farce, Gordon Brown finally pulled out the Samson Option, offering his resignation to a packed media horde outside No.10 Downing Street early on Monday evening.

The announcement followed another day of talks between the Tory and Lib-Dem negotiating teams, with the sticking point remaining the question of a referendum on voting reform, specifically on the possibility of proportional representation.

Mid-way through the day, a Lib-Dem spokesperson confirmed what everyone knew — that the Lib-Dems were in back channel chats with Labour, and had been since the weekend. Hardly shattering revelations, yet it seemed to make the Tories very peevish, which would suggest they are easily surprised.

The whole area around No.10, and down to the Houses of Parliament, was frenetic, filled with photographers, live cross vans, and old-fashioned rubberneckers doing a bit of pollie spotting. Most of the coverage, of course, consisted of focusing on the closed door of No.10, waiting for something to happen.

When it happened, it happened fast. Brown’s announcement of resignation (actually announcement of an intent to resign some time) in the future was followed by a narked William Hague coming out and making the Lib-Dems the public offer of a referendum on AV, plus cabinet posts, and series of further concessions on, you know, policies.

By now, speculation on the future nature of the British government was being combined with speculation on the Labour leadership, with not one but two Milibands, David and Ed in contention, as well as Ed “sinister” Balls, the ultimate Brownite fixer, older statesman type Alan Johnson, deputy leader Harriet Harman, and as a dark horse, Health Secretary Andy Burnham. David Miliband is in the swim and a favourite, someone like the near invisible Burnham has the advantage of being … erm … near-invisible.

If Labour and the Lib-Dems do do a deal, one that many thought, this author included, was more likely than a Tory Lib-Dem deal they’re going to have to work fast. Once the Lib-Dems are on board, side deals would have to be done with the Scottish National Party and Plaid Cymru, who would want both specific grants, etc, for their regions, as well as a speed up to a referendum on Scottish independence.

That’s not to say that Clegg and those around him wouldn’t contemplate a deal with the Tories and that might still come off. But they have to sell 75% of their MPs and their executive on it, otherwise it goes to the larger fruit basket of the membership.

But as the deal-making gets faster, the Tory and Lib-Dem leadership are likely to commit mistakes, and offer more than their rank-and-file would accept. At that point, on these knife-edge numbers, leaders can no longer guarantee supply of their own troops a left section of Lib-Dem Mps might simply refuse to accept a deal with the Tories, just as a tranche of old guard Tories might rebel against any further trade-offs.

Obviously something has to happen and fast; it is not only the markets that will start to get skittish if things linger too long. A few more days of this and it will be on the way to a political crisis.

The problem is not the hung parliament, it’s that a parliament whose system gives such unbalanced representation has generated no clear result, leaving people’s legitimacy in a quantum meta-state. For example, if this had been a PR election, then Labour 29% would add to the Lib-Dems 23%, to create a 52% progressive block, a clear majority against the Tories 36%.

But that 23% has given the Lib-Dems only 8% of the seats. So in assessing that, do you count their seats or their votes? The current system can’t give you a true answer.

But with Brown’s announced resignation, I would imagine it possible that a Labour-Lib-Dem core deal will be struck some time tomorrow, to be fleshed out later, with the intent being a referendum and a new election within 18 months. Brown would hang round for three months or so, until Labour had a new leader.

We shall see. And bloody soon.

Peter Fray

Save 50% on a year of Crikey and The Atlantic.

The US election is in a little over a month. It seems that there’s a ridiculous twist in the story, almost every day.

Luckily for new Crikey subscribers, we’ve teamed up with one of America’s best publications, The Atlantic for the election race. Subscribe now to make sense of it all, and you’ll get a year of Crikey (usually $199) and a year’s digital subscription to The Atlantic (usually $70AUD), BOTH for just $129.

Peter Fray
Editor-in-chief of Crikey