David Cameron swept back into Downing Street after the Conservatives secured a dramatic and unexpected election victory, winning their first outright majority in parliament since 1992.
But Britain faces unprecedented strain after a night of triumph for the Scottish nationalists, who won all but three of Scotland’s 59 parliamentary seats.
The election transformed the UK’s political landscape, triggering the resignations of three party leaders — Labour’s Ed Miliband, the Liberal Democrat chief Nick Clegg and Nigel Farage of the UK Independence party — and claiming the scalps of a swath of senior politicians who have dominated Westminster for a decade.
The Tories won 331 seats, giving them a majority of 12 — a far better result than senior Tories had imagined possible. Labour saw its tally sink to 232, even worse than its poor performance in the 2010 election, as its huge losses in Scotland more than wiped out its modest gains in London and elsewhere. The Liberal Democrats meanwhile saw their support collapse, winning only eight seats — 49 fewer than in 2010. Voter turnout was the highest since 1997.
The outcome confounded the many polls ahead of the election that had put the Conservatives and Labour at level pegging. The British Polling Council set up an independent inquiry on Friday into why forecasters had so dramatically understated the level of Tory support.
After meeting the Queen at Buckingham Palace, the prime minister returned to Downing Street where he struck a conciliatory tone, saying the Conservatives would govern as “a party of one nation”. He also promised Scotland the “strongest devolved government anywhere in the world” with wide powers over taxation.
He also reiterated his pledge to hold an in-out referendum on Britain’s membership of the European Union, an announcement that reignited concerns in Europe’s capitals about the risk of a Brexit. Mr Cameron must now enter tricky negotiations with his EU counterparts that will reveal what price they are willing to pay to keep Britain in the union.
In a speech to supporters announcing his resignation, Mr Miliband said he was “truly sorry” he did not succeed as Labour leader but would “never give up” fighting for the Britain he believed in. “The course of progress and social justice is never simple and straightforward,” he said.
Mr Clegg said the results were “immeasurably more crushing and unkind than I can ever have feared”. He was speaking after a disastrous night when some of the party’s most high-profile figures — such as Vince Cable, business secretary, and Danny Alexander, deputy finance minister — lost their seats.
UK stocks enjoyed a relief rally, with the FTSE 100 rising 1.7 per cent, or 119 points, in early afternoon trading. It was led by energy and banking stocks — two of the sectors that would have been vulnerable to increased regulatory scrutiny and a higher tax burden under a Labour government.
Centrica, the owner of British Gas and one of the UK’s main energy providers, led a rally on the FTSE, rising 7.4 per cent to 276.5p. Royal Bank of Scotland was one of the best-performing financial stocks, up 6 per cent at 352p.
Currency markets also reacted positively, with sterling up 1.8 per cent against the dollar to $1.5513 and gaining 2.2 per cent versus the euro.
Manny Roman, CEO of Man Group, the UK’s largest hedge fund, said: “A clear outcome and a level of continuity is certainly a positive thing for the UK economy, and the City will no doubt welcome what is expected to be a more business-friendly environment.”
The UK Independence party suffered a devastating blow when its charismatic leader Nigel Farage lost to the Conservatives in South Thanet, failing at his seventh attempt to enter parliament. Mr Farage quit as Ukip leader, offering another cause for Tory celebration.
His party won about 13 per cent of the popular vote, but the UK’s first-past-the-post electoral system meant Ukip was only likely to return one MP.
Labour also suffered some significant casualties. Ed Balls, the shadow chancellor, and one of the leading Labour politicians of his generation, lost his seat of Morley and Outwood to the Tories by just 422 votes. “I feel sorrow about the result that Labour has achieved not just in Scotland but across the country and I have concern about the future,” he said.
But the other big story was the Scottish National party surge, which swept away Labour and the Lib Dems. The SNP’s strong finish could embolden it to push for a second independence referendum.
Alex Salmond, the party’s former leader, declared: “The Scottish lion has roared this morning.”
The poll has exposed deep divisions in the UK, with Scotland turning to a leftwing, separatist party and England choosing Mr Cameron’s centre-right Tories. Mr Salmond said Mr Cameron no longer had “legitimacy” in Scotland.
The election could herald a further loosening of the ties that hold the UK together. Boris Johnson, London mayor and newly elected Tory MP for Uxbridge, suggested Mr Cameron would move to create a more federal UK. “There has to be some sort of overall offer,” the London mayor said.
In the end, Mr Cameron and his campaign were vindicated. But with Scotland appearing to pull away from the union and with the Conservatives’ promised referendum on EU membership looming, the prime minister’s toughest work may lie ahead.