There’s no hiding from it, no getting away from it, and the news headlines have been full of it since last Friday: the UK went to the polls and couldn’t quite manage to pick a winner. Well, there was a winner, but they haven’t managed to take hold of the keys to No. 10 Downing Street just yet. This is a real opportunity for Aussie travellers (especially if you are heading to the UK in the near future).
Before we get into how this is good for Aussie travellers, let’s have a look at what has happened, what should have happened, where we are now and so on. If you don’t like the constitutional details of the UK then feel free to skip to the end of the article for the good news bit.
How is the UK parliament supposed to work?
Almost exactly like the Australian one actually. No surprise given that the Aussie parliament and government was based upon the UK model. To get into more detail though, the UK parliament consists of 650 MPs (Members of Parliament), and each seat must be contested at least once every 4-5 years, with the Prime Minister (PM) setting the actual date. The UK operates a system called “First past the post” in which the party with the most seats won (and therefore MPs returned) gets to form the government if they win more seats than all of the other parties combined. So, with 650 seats up for grabs, a party must win 326 seats to form a government.
What happens if a party does not get the 326 seats?
Well, that is exactly the situation that the UK finds itself in right now, and it has the news media frantically trying to satisfy the public’s quest for knowledge on the situation. The answer is quite simple actually: two or more parties must work together to generate a “working majority”. Namely, it means that combined, they will reach the magical 326 seats. Parties can do this in a number of ways, but the most common two (and one of which will be the likely outcome), are that two or more parties effectively merge for the period of the parliament – known as a coalition, or, two or more parties just agree that the smaller party/parties will either vote with, or at least abstain from voting against, the larger party in a confidence vote. The latter being the most likely outcome.
Who is in charge at the moment?
While the parliament is hung, the incumbent Prime Minister – Gordon Brown – remains in charge, and all of the various ministers and secretaries of state remain in their posts until the whole mess is sorted out. This can actually lead to some bizarre outcomes, as demonstrated by the case of Bridget Prentice, Justice Minister. She announced some time ago that she would be standing down from parliament at the election and her name was not put forward on the ballot paper. Of course, as a result of that she is no longer an MP. However, because the ministers have to stay in place for the time being, she is still justice minister. Quite strange really because she must carry out her ministerial duties but is not allowed to enter the parliamentary chambers.
Can the Queen choose a new PM?
No. The Queen has no power to appoint a Prime Minister, nor can she demand the resignation of the incumbent. What she can do however, and is duty bound to do, is to accept the resignation of a Prime Minister and then invite the leader of the largest parliamentary party to form a government in her name, and appoint a prime minister (normally the leader of that party). There is basically only one instance in which a PM is required to resign, and that is when he/she cannot “command a majority” when it comes to a vote. Basically, if the PM loses a vote of no confidence then they must resign. A PM is deemed to have lost such a vote if they are not the leader of a party with at least 326 MPs or has the command of that number using either of the methods described above.
But the PM does not have the command of 326 MPs, should he go now?
No. Although the Labour party did not win the necessary number of seats, and he therefore cannot claim to control a majority, neither can anyone else at the moment. Hence, he has no need to resign just now, and therefore he hasn’t.
What happens next, and who are the players?
There are three main parties in the UK, as follows:
- Conservatives (also known as the Tories): The returned the most number of MPs in the election – just over 300. Lead by David Cameron, they are the party that are most likely to lead the next government.
- Labour party: Came second in the election with just over 250 seats. Lead by Gordon Brown, they are the current government.
- Liberal Democrats (Lib Dems): Came third in the election with 56 seats. Lead by Nick Clegg, it is the Lib Dems that will be the second party in any coalition.
Currently, the Tories are attempting to reach agreement with the Lib Dems. Should that prove successful then the Tories will form the government. If those talks are unsuccessful, the Lib Dems will start talks with Labour. Should those prove successful, Labour will form the government despite not winning the most seats.
If no agreement can be formed then a new election will have to be run.
And the good news?
If you have read the bits above then you will be able to see that political confusion reigns in the UK at the moment. If you didn’t read the above, then just trust that political confusion does reign in the UK at the moment.
Confusion like this tends to have an effect on the markets around the world, and in particular (in the case of the travelling Aussie), the currency markets. Most of the markets had largely predicted a hung parliament in the UK so there is an element of that build into the price of the Pound at the moment. However, judging by the market reaction in Friday’s trading, they didn’t quite build in enough of a safeguard and Sterling plunged against most world currencies. There is no reason that the nose dive will stop until the government sorts itself out, and the upshot of that is that you can buy Pounds for fewer Dollars than ever before. If you’re game, and in need of Pounds then this could be the time to capitalise on the confusion and make a few extra quid for your holiday. Of course the Pound may mount a staggering recovery and become expensive again, that’s up to you to guess. What is for sure, is that Sterling has never been so cheap.
Happy shopping!