This is where things get harder. In this post, I'm going to build on my conclusions about the likely shape of the result and try to work out what the next government might look like. The problem with this exercise is that many of the deductions need to be made from what politicians say about their intentions for a negotiation in six months' time. There are two major risks in this process. First, they may be lying. Secondly, they might change their minds. Part of what we have to do is to decide how trustworthy and how forward thinking individual politicians are. This means that bets on the basis of these deductions are inherently more risky even than usual.
You have been warned.
How will the numbers stack up?
The starting point has to be what the new Parliament will look like. I looked at this in my last post:
I came to the conclusion that if the individual seat markets are to be believed, a hung Parliament is very likely indeed, a Labour majority is an outside chance and that no other outcome is currently on the radar. Putting these in percentage terms, using the data from the individual seat markets, I'd assess the chances of a hung Parliament at 75% or more, the chances of a Labour overall majority at 1 in 6, the chances of a Conservative overall majority at something like 1 in 12 and the chances of any other party getting an overall majority at something like 1 in 200 (I'm aware that these don't add up to exactly 100% and no, I'm not offering bets on the odds implied by these assessments). As I said in my last post, betting on a hung Parliament looks like a great bet even at the current best price of 8/15 (still available with various smaller bookies).
It follows that I don't want to bet on either Labour or the Conservatives getting an overall majority at the current best prices of 15/4 and 5/1 respectively. I'd want much better odds.
If there is a hung Parliament, what happens next? Much, of course, depends on the seat numbers. As I noted in my previous post, the par result predicted by the constituency markets at present is:
Conservatives: 273 1/2
Lib Dems: 31
SNP: 16 1/2
Plaid Cymru: 3
That probably overstates Labour by a few and understates the SNP by a few, since the seat markets have not yet fully caught up with the SNP's astonishing rise in the polls. We also need to add in the northern Irish parties - for now I'm assuming that the northern Irish result will result in no changes (they won't change very much). In an entirely unscientific way, I'm going to tidy this up to the following baseline result:
Lib Dems: 31
Sinn Fein: 5
Plaid Cymru: 3
Sinn Fein do not take their seats in Westminster, reducing the effective majority in Parliament to 323.
The SDLP caucus with Labour, so their three seats can reliably be added to Labour's tally. The independent, Lady Sylvia Hermon, left the UUP because of its tie-up with the Conservatives and in practice has mostly sided with Labour also, so we can probably add her vote to the Labour tally too. That takes Labour up to 296.
The Alliance Party have historically caucused with the Lib Dems, but their MP Naomi Long sits on the opposition benches and is probably more independent in practice than Lady Sylvia Hermon. You might tentatively add her to the Lib Dem total if you wish. I wouldn't.
I shall come back to the DUP. They need lengthier consideration.
How could a majority be constructed?
So, if we had this hypothetical Parliament, who would govern Britain? As we learned in 2010, the incumbent Prime Minister is under no obligation to resign simply because he is behind in the seat tally, and I would expect David Cameron to try to construct a workable government. I would also expect him to fail. Even if he were to secure the support of the Lib Dems and UKIP, he would fall short. In practice, he would need the support of the SNP as well as the Lib Dems for even a bare majority. Such an agglomeration is implausible on numerous grounds, but I can discount it for now simply on the basis that it would be far too unstable.
So I would expect a Labour-led government on such a seat tally. And Ed Miliband would have the choice of not one but two different possible junior partners to get over the line: the Lib Dems or the SNP and Plaid Cymru. This would place Labour in a relatively strong position in negotiations.
Would Labour prefer a coalition or a minority government with supply and confidence? Both potential partners would give rise to different problems as potential coalition mates. The SNP would have achieved their seat tally largely at Labour's expense. Labour would not be keen to reward them for that. Additionally, the SNP abstain on votes which do not concern Scotland. This would mean that Labour would need to construct a different majority for English-only matters. This would be a chore.
Labour's problem with the Lib Dems is more emotional: their troops (though not their voters) hate them with a passion, and particularly Nick Clegg. Labour have spent the last five years demonising the yellow peril, so to share a Cabinet table with them would not go down well. Ed Miliband's poor ratings mean that he has no personal capital to draw upon to push through such a deal.
Here is a view from the rank and file from last month:
"Who exactly do they Lib Dems think they are? Do they understand their current predicament? Do they not realise that they are the watchword for unscrupulous untrustworthiness in politics? Their vote share is now around a quarter of what it was five years ago. They’re polling 7% and would probably do anything at this point to get a higher vote share than UKIP. And yet they’re the ones who think they can dish out the red lines to other parties? The Lib Dems may believe that going into coalition with Labour would be problematic for them, but it could be utterly toxic for the Labour Party. Just imagine the reaction from Labour voters across the country if they realise that booting out the Tories doesn’t mean booting out their orange accomplices. “It doesn’t matter who you vote for” would have no better exemplar."
That view from a relatively moderate and thoughtful Labour commentator, which is fairly typical, is going to be hard to overcome.
Lisa Nandy, the MP for Wigan, voted for Ed Miliband in the leadership election in 2010 and is thought to be close to him. Here is her take:
"She may not be a tribalist, but the shadow charities minister has a pretty dim view of the Lib Dems under Nick Clegg and co. For Nandy, "if you look at all of the other parties that are a force in British politics, apart from Labour, they are all on the right. You have got Lib Dems and Clegg wedded to.. free market liberalism."
So, hold on, is she really saying she'd oppose Labour doing a deal with Clegg after the next election? Nandy, the non-tribalist, doesn't hold back.
"The problem with Clegg is that he is from that economic liberal wing of the party. It's very, very difficult to see what Labour has in common with someone like Nick Clegg. There are other people in the Liberal party who might perhaps be different.
"So if they had a different leader and stood on a social progressive manifesto I think that would be a different story. But if they stand on the sort of record that they have got in this government, I think it would be impossible. Because, quite simply, we don’t have enough philosophically in common to be able to form a lasting coalition." "
Leaving aside the remarkable provinciality that she shows by ignoring the SNP as a force in British politics on the left, this quote shows just how far up in the Labour party the hostility to the Lib Dems permeates.
Would the Lib Dems dump Nick Clegg for a coalition with Labour? It would effectively be an admission on the Lib Dems' part that entering the current government was a mistake. I am very doubtful whether they would be ready in May 2015 to make such an admission.
It seems considerably more likely to me and less problematic on the type of numbers envisaged above that Labour would seek to form a minority government, relying on both the Lib Dems and the SNP for supply and confidence, and playing them off against each other to minimise their claims for government attention:
Because many of Labour's policies are individually popular with the electorate, Labour could put them forward and dare the other parties to vote them down. That is likely to look attractive to a Labour leadership that has neither the political capital nor the inclination to enter into full coalitions.
The perspective of the prospective junior partners
It takes two to tango, and as I have already shown, Labour will be a reluctant dancing partner. How do the potential junior partners feel about the process?
The SNP have already set out their stall. Nicola Sturgeon has been as categorical as she can be that the SNP will neither be entering coalition with the Conservatives nor supporting them in government:
And Alex Salmond has made it clear that the SNP is unlikely to enter a formal coalition with Labour either:
"Mr Salmond told BBC Scotland's political editor, Brian Taylor, that he thought a "coalition with a Westminster party is unlikely"."
Do I believe them? Yes I do. The SNP's enlarged support base is firmly left of centre and would not countenance propping up the Conservatives. It is easier to imagine them entering coalition with Labour, but it's hard to see what the SNP would get out of a formal coalition, given their ultimate aim of independence and their lack of interest in UK-wide matters. A supply and confidence arrangement seems much more likely.
Nigel Farage has also stated his position:
"JC So there could be a Ukip-Labour-Lib Dem rainbow coalition.
NF Sounds extremely unlikely.
JC Or a Ukip-Labour coalition.
NF Why coalition? There are other ways of doing things.
JC Tell me how. Confidence and supply?
JC Would that suit you better?
NF To be honest, the way I look at it now, I can’t see Ukip wilfully going into formal coalition with anybody."
Do I believe him? I'm rather less confident in Nigel Farage than Alex Salmond as a deep strategic thinker. But I believe this is his honest view and I believe that this passage accurately reflects UKIP's interest. A party that has positioned itself as being different from all the rest would not want to be seen hand in glove with any of the rest - it would damage their USP. Parliamentary instability would suit UKIP.
UKIP, however, will also have taken note of how Nick Clegg despatched Gordon Brown in 2010. Junior partners in negotiations can make personalities an issue. Nigel Farage would love to take David Cameron's scalp in such circumstances. Might UKIP serve in a coalition under a different Conservative Prime Minister if that was the price of getting rid of Mr Cameron? Just possibly. It would certainly be a way of making UKIP look more appealing to the 40 or so rightwing Conservative MPs who detest David Cameron. But will he have enough MPs to make that a credible strategy? Right now, that looks unlikely. He would probably need about 20 MPs at his disposal for that to start being a possibility.
UKIP's MPs may be less easily led than those of other parties. As a populist party, its MPs will come from different angles, and there may be fall-out as a result (UKIP's track record with its MEPs suggests so). They may make for unreliable partners as a result.
The DUP are old hands at this. Their vote bloc is significant (they look likely to have more MPs than UKIP) and they have long experience of selling their vote to the highest bidder.
There have been whispers that they are looking to cooperate with UKIP in a hung Parliament. That could make sense on both sides, since they have areas of common concern and few conflicts. The DUP might rethink if UKIP flop. Anyway, they won't enter a formal coalition and they won't want to participate in deposing David Cameron: they have no particular interest in personality politics and certainly no interest in irretrievably alienating any mainstream section of mainland politics. There will be another deal to be struck at some point in the future and they'll want to be considered then.
The Lib Dems
Unlike the other smaller parties, the Lib Dems profess to be keen on coalitions. They have already named their negotiating team:
Whether Danny Alexander would remain part of this if he lost his seat is unclear.
Senior Lib Dems are hinting that they would like to do a deal with Labour next time:
But they're also playing harder to get:
The Lib Dems might find a second coalition with the Conservatives difficult, since it would be hard to retain their separate identity through ten years of continuous coalition with a much bigger party. Those on the left of the party would chafe under the yoke that much more, particularly if the government were to be dominated by discussions of Britain's relationship with the EU, where the Conservatives are cool to frigid and the Lib Dems are warm to hot.
The Lib Dems are, however, clearly open to coalitions. If they can find a willing partner.
Summary of likely government shape on par result
If the par result is achieved, it seems to me that it is likely on a balance of probabilities that Labour will form a minority government - maybe a 60% chance. There is a lesser chance that Labour will form a coalition with the Lib Dems - maybe a 30% chance. Other outcomes seem fairly unlikely - maybe a 10% chance for all of them put together.
Moving away from the par result
It's at times like this that I wish I had a good handle on what stochastic modelling really entails. I have a strong feeling that some actuarial skills would come in handy right now. Let's look at some scenarios.
Labour do better than par
As a general rule, the closer that Labour get to an overall majority, the less inclined they will be to enter a formal coalition with another party. The SNP remain unavailable to them as coalition partners and the Lib Dems remain uncongenial to them, and Labour would be more confident. But to be cautious, I shall allocate the same probabilities as before.
Labour and the Conservatives are neck and neck
Let's assume that Labour do less well, getting 6 fewer seats from the Tories and losing 6 more to the SNP. The balance would then be Labour 280, Conservatives 280, SNP 31, Lib Dems 31, the rest the same as before.
At this point, the dynamics change a lot. In these circumstances, the Conservatives probably would have received more votes than Labour and might claim more moral authority. This would increase the pressure on Labour to cut a full coalition deal. It would also weaken the Lib Dems' desire to enter a formal coalition with Labour, for the reasons given by Norman Lamb in the final link above.
The Conservatives would still struggle to put together a majority. How does the combination of Conservatives, Lib Dems, UKIP and DUP sound to you? And that gives just 324 seats. I can't see that one lasting for long.
The problem for Labour is that in these circumstances even a formal coalition between Labour and the Lib Dems would not command a majority. They would need the support of the SNP as well. This change from "or" to "and" is critical.
The SNP, oddly enough, will become more reliable for Labour since the pressures on them get stronger even though their seat tally has strengthened. The need to honour the commitment to their voters not to let a Conservative government in will guide their actions. They cannot afford to play hardball with Labour if there is a serious prospect of a Conservative government. But they still have no motive for entering a full coalition.
On these numbers, the only stable government would be a grand coalition between Labour and the Conservatives. This would be hated by both sets of main party politicians and a gift to both UKIP and the SNP. It would be by far and away the most rational outcome on these seat numbers, so of course stands little chance of being adopted.
Ultimately, Labour, the Lib Dems and the SNP would probably have to work together, because nothing else really works politically. Whether this would be a Labour minority government or a Labour/Lib Dem minority coalition is hard to tell. I'd assess the odds on this as 45% Labour minority, 35% Labour/Lib Dem minority coalition, 10% grand coalition, 10% something else. If you're thinking of backing a Labour/Lib Dem coalition, incidentally, check the terms of the bet carefully with the bookie to make sure you're covered in these circumstances.
The Conservatives are ahead of Labour
Let's turn the tables and imagine the Conservatives on 292, Labour on 274, the Lib Dems on 31, the SNP on 25 and the rest as before.
This is the exciting one. For the reasons previously given, the SNP will do anything to stop the Conservatives: their voters have been promised that and they can't let them down. So the Lib Dems, with barely half their current seat count, will be kingmakers and have huge power. As Spider-Man knows, with great power comes great responsibility. Which way would they jump?
On the one hand, the Conservatives would probably have got considerably more votes than Labour. And the Lib Dems would probably have fallen behind UKIP in vote share. Could the Lib Dems really form a coalition of the losers?
On the other hand, could the Lib Dems really afford to join with the Conservatives for another five years? Their progressive credentials would be completely extinguished if they made a conscious choice to do so. In 2010 they could at least argue that they had no practical choice.
And on the other hand (Fiddler On The Roof style), there's the question of personalities. The Lib Dems get on well at a senior level with the Conservatives and badly with Labour. This matters a lot.
I honestly have no idea which way the Lib Dems would jump or whether they would wish to be in coalition or simply offer supply and confidence. It would be a gruesome choice for them. But note, Labour could forget about asking for Nick Clegg's head and the Conservatives would pay a heavy price to secure their referendum on EU membership. And any rightwing Conservatives who dream of ousting David Cameron would have to accept that would probably come at the cost of the Conservatives leaving government.
I'm simply going to ascribe a 20% chance to each of a Conservative/Lib Dem coalition, a Conservative minority government, a Labour/Lib Dem minority coalition, a Labour minority government and something else, since I honestly haven't a clue what would happen.
Annoyingly, this type of outcome is quite possible, though there is a fairly narrow window. The Conservatives would need to get between 290 and 300 or so seats for this type of permutation.
The Conservatives are well ahead of Labour
As I showed in my last post, the Conservatives are not expected on the individual seat markets to stand a great chance of getting north of 300 seats. If they do, they will in all probability be in the next government. But on what basis?
The closer they get to 325, the more realistic UKIP and the DUP become as an option. But I suspect that David Cameron would prefer to work with the Lib Dems for many reasons.
1) He is closer politically to the Lib Dems.
2) He does not want to be seen to lurch to the right.
3) UKIP and the DUP may not be an internally coherent bloc, for the reasons noted above.
4) There seems to be serious animus between the key personalities in UKIP and the Conservatives (as Douglas Carswell's twitter feed attests).
5) The Lib Dems have more seats, making an arrangement with them more stable.
I am sure he would like the option of UKIP to extract better terms from the Lib Dems though. He personally would probably also prefer a coalition with the Lib Dems if possible - he's made it work for the last five years. Whether the Lib Dems have the stomach for five more years of formal coalition is less clear.
I place the chances here at 50% Conservative/Lib Dem coalition, 40% Conservative minority government (whether supported by the Lib Dems or UKIP) and 10% something else.
So far I've looked at this largely as between Labour and the Conservatives. But other parties have wide ranges of outcomes too. I've already looked at how the SNP doing well might affect dynamics. What if they did badly?
If so, Labour would have done better in Scotland than currently anticipated. A possible outcome might be Labour 305, Conservatives 274, Lib Dems 33, SNP 10. To contrast with Labour 305, Conservatives 256, Lib Dems 31, SNP 30, Labour could not construct a working majority with SNP support (though they would be tantalisingly close with the SDLP, Plaid Cymru and odds and ends). They would be thrown back on the Lib Dems in practice, upping the prospects of a coalition.
What if UKIP do well? There's maybe a one in six chance that UKIP will get something like 20 seats. If they do, these will be mainly at the Conservatives' expense. So we could see something like Labour 290, Conservatives 256, Lib Dems 31, SNP 25, UKIP 20. This does not seem to me to affect the dynamics very much at all. Labour will only imagine talking to UKIP if they absolutely have to. They don't.
But I don't see this as a likely permutation. If UKIP have taken 20 seats from the Conservatives, the Tories are likely to have underperformed against Labour too. I expect the one in six chance that UKIP take 20 seats has a heavy overlap with the one in six chance that Labour get an overall majority.
Paradoxically, UKIP are slightly more likely to have influence in a hung Parliament if they do less well. If the Conservatives tally 315 seats or so, UKIP's and the DUP's seats might make them viable allies. I don't see that outcome as likely, mind, and for the reasons given above, I expect that the Conservatives would turn their backs on them.
What if the Lib Dems do unusually badly? This would be likely to benefit the Conservatives, who are challenging them in more seats. A seat tally such as Labour 295, Conservatives 282, SNP 25, Lib Dems 20, perhaps. That also benefits the Conservatives strategically, because Labour are back practically requiring an "and" alliance, even though their own seat count has gone up.
Summary of permutations
This has been a long post, and I've only touched on some of the permutations. But within a hung Parliament, the five main permutations cover most of the bases. I assess something like the par result as representing 30% of the chance of a hung Parliament, Labour doing better as 20% of that chance, the two main parties being neck and neck as 20%, the Conservatives being a bit ahead as 20% and the Conservatives being over 300 as the other 10%. No doubt you will have other estimates, and I'm very open to different views, but I'm using these for my deductions.
Let's number-crunch all of this to produce a table setting out the various probabilities:
I'm well aware that there's a lot of false precision in this. I'm also aware that it only adds up to 99% - the other 1% is reserved for things like a UKIP overall majority or a UKIP-led minority government. And no, I'm not taking bets on that assessment either.
On my estimates, Labour will be leading the government more than two thirds of the time (including the one in six chance of an overall majority). Bear in mind that a fair proportion of "something else" will be Labour-led governments too. Nearly a third of the time, the government will be a Labour minority government. This is driven by two things. First, the constituency markets give a small but clear lead to Labour. Second, a critical set of seats will either be taken by Labour or the SNP. Either way, they will be used to bolster Labour's attempts to construct a majority.
How confident am I in my estimates? Not very. There are two huge sets of assumptions: first, that the conventional wisdom of the constituency markets is broadly right; and second, that I've correctly understood the dynamics in a hung Parliament. I'd be thrilled if I were right to the nearest 10% in any of these estimates. So I won't be placing bets with gay abandon.
But two bets look worthwhile. First, Ed Miliband should be odds on to be next Prime Minister, even allowing for the risk that he will be turfed out of his job before the next election. He can still be backed at odds against on Betfair. This looks like a great bet. I'm on.
Second, the odds on a Labour minority government look way out of kilter. What I have estimated as a 2/1 shot is available at 7/1 with William Hill. Even if I have underestimated Labour's willingness to form a coalition and overestimated the chances of a hung Parliament, I can afford to have been very wrong indeed before this looks like a bad bet. And if there is a hung Parliament, this bet could in all likelihood be laid at a profit in any case. I've topped up on this bet. But I won't be betting the house on this.