The latest opinion polls in Britain show that the country could well end up with a hung Parliament after this year's general election, which will probably be held in early May.

Until recently, the polls had been pointing to a clear victory for the Conservatives but their lead over the governing Labour Party has now fallen from double digits last year to six percentage points.

A hung Parliament is one in which no single party secures an overall majority of seats. The only options available in such a scenario is either the formation of a coalition government or the creation of a minority government which is kept in power as a result of one or more of the opposition parties not voting against it in a parliamentary vote of confidence. In the UK, such minority governments tend to be weak and short-lived, which is certainly what Britain does not need in the present circumstances.

The post-war period in Britain has witnessed two hung Parliaments, but no coalition governments. The first was after the February 1974 election in which the Labour Party received the largest number of seats but was short of an overall majority. A minority Labour government led by Harold Wilson was formed which lasted eight months.

In October of that year, another election was held in which the Labour Party won by a slim three-seat majority.

In March 1977, Labour, now led by Prime Minister James Callaghan, lost its parliamentary majority through various by-election defeats and formed the so-called 'Lib-Lab Pact', in which the Liberal Party agreed to support the government in a vote of confidence in return for Labour backing of certain Liberal policies.

This pact was dissolved in July 1978, and in March 1979 the Labour government collapsed after it lost a parliamentary vote of confidence. In May that year the Conservative Party, led by Margaret Thatcher, was elected to office in a landslide victory which ushered in 18 years of Conservative rule.

Labour's catching up with the Conservatives in the opinion polls is quite incredible and must be a huge relief for Prime Minister Gordon Brown, who has been written off many times since he entered Downing Street three years ago. The fact that Britain finally exited the recession in the fourth quarter of 2009 - which witnessed a modest 0.3 per cent economic growth - has probably helped Brown somewhat.

Furthermore, a recent poll has shown that Labour is now as trusted as the Conservatives in managing the economic crisis. Last summer, Labour trailed the Conservatives by nine points on this question. Even though Brown remains an unpopular figure, voters perhaps believe that his handling of the recession deserves merit, and if this is the case, Labour will no doubt take maximum advantage of this during the election campaign.

In reality, however, this election is for the Conservatives to lose. Labour has been in government since 1997; it has grown tired in office, its leader lacks charisma, public finances are in a bad state, taxation has gone up considerably, unemployment figures remain high and the party has faced dissent from within.

So the Conservatives, under the leadership of David Cameron should win, but it is not going to be at all easy. Last week, for example, Michael Heseltine, a former Cabinet minister under Margaret Thatcher and John Major, stunned party activists by declaring that he expects a hung Parliament after the election in which the Conservative Party will only win a relative majority of seats.

Such a declaration, coming from a Tory grandee like Heseltine, certainly cannot be dismissed.

Part of the problem for the Conservatives is that their message sometimes appears to send out mixed signals. For example, Cameron has said that curtailing the deficit would be a priority for a Conservative government, yet he remains committed to big spending on health and cutting corporation tax, income tax and inheritance tax.

Furthermore, while in the past Cameron was way ahead of Brown in personal ratings, the two are now almost neck and neck. Also, although there is a general feeling among the electorate that change is needed, Cameron does not have the same effect on voters as Tony Blair did in 1997 when there was a massive swing towards Labour.

There will be 650 parliamentary seats up for grabs in the election and 326 are needed for an absolute majority. Labour currently has 346, the Conservatives 193 and the Liberal Democrats 63. The Conservatives are concentrating their efforts on certain 'target seats' which they must win to get an outright majority in the House of Commons.

Should they end up with a relative majority, however, this does not automatically entitle them to try to form a government. This will depend on whether Brown steps down or tries to secure a parliamentary majority with the support of the Liberal Democrats.

This will be a fiercely fought election. The Conservatives will focus on the need for change, while Labour will turn this into a presidential contest, highlighting Brown's experience and handling of the recession and contrasting it with what it claims to be Cameron's inexperience and lack of clarity on key issues.

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