Tories to take control, but tough calls on health spending, unity and Europe ahead
The Conservative party has confounded expectations of a hung parliament in the UK, and are set to win a slim majority in the general election.
For months, opinion polls had suggested that no party would win an outright majority, but the results mean David Cameron's Conservatives will now be able to govern alone and without any coalition partners.
A final few constituencies are yet to declare their results, but the Conservatives have now 323 seats confirmed, putting them well on the way to the 216 majority they need to form a single party government.
The result is a huge victory for the party, achieved despite five years of austerity measures, and is undoubtedly based on convincing voters that it is best placed to foster economic growth. However political analysts are already predicting a rocky ride for David Cameron in his second term as Prime Minister - the slim majority means he will be at the mercy of his own 'backbench' MPs, and may have to call on other parties to win key parliamentary votes.
The party is also certain to struggle with a number of hugely divisive questions over the next five years - from a renewed threat of a break up of the United Kingdom, a possible exit from Europe via a promised referendum, and major dilemmas about how to fund the national health service (NHS) in the face of further public spending cuts.
Disaster for Lib Dems and Labour, triumph for SNP
Cameron's party took seats from the Liberal Democrats and Labour, who both suffered badly at the polls, and also fended off the challenge of the UK Independence Party.
Former Deputy Prime Minister Nick Clegg saw his Liberal Democrat party lose 48 seats, leaving them with just eight MPs. Meanwhile Ed Miliband's Labour fared far worse than expected, having lost 26 seats so far, including losing all but one of their seats to the Scottish National Party, who now hold 56 of 59 seats in Scotland. Labour's greatest humiliation was shadow chancellor Ed Balls losing his parliamentary seat to a Conservative challenger.
While the Conservatives will now be able to govern from Westminster, the SNP's landslide victory in Scotland suggests that Nicola Sturgeon's party will push for independence once again, despite having lost a referendum on the issue last September.
UKIP party leader Nigel Farage failed to win his first ever seat in the House of Commons, being defeated in Thanet South by the Conservative candidate, the party losing one of its two sitting MPs. Farage and Nick Clegg and Ed Miliband have now all stepped down as leaders of their parties.
Why the surprise result?
While all opinion polls had suggested a hung parliament right up until polling day, an exit poll taken last night was far more accurate in predicting the result, though even it underestimated the extent of Conservative gains.
The most credible explanations of the surprise swing to the Conservatives centre on the fear among England's voters of a Labour / SNP coalition taking control in Westminster – despite Ed Miliband ruling out such an arrangement.
More broadly, the result is a clear sign that the Conservatives managed to convince voters that Labour could not be trusted with the economy, and also reflected Ed Miliband's long-standing lack of credibility as a leader among the electorate.
The future of the NHS
Ed Miliband's Labour failed to capitalise on its consistent lead in opinion polls on the subject of the NHS, with concerns about is long term future and funding being one of the most prominent election issues.
While there were relatively small differences between the election pledges of the main parties, the overwhelming question is how to fund the NHS over the next five year parliament and beyond.
Here are the Conservatives' key pledges on health:
• Increase NHS spending in England by at least £8bn above inflation over the next five years
• Seven-day access to GPs by 2020 and same day appointments for over-75s when needed
• Integrate health and social care
• Improve access to mental health treatments
Jeremy Hunt is likely to stay within his existing post as Health Secretary, and will have to address the question of NHS funding as a matter of urgency, as many leading hospital trusts are expected to slip into deficit this year.
Chancellor George Osborne has promised to meet demands for an extra £8 billion a year funding for the NHS, but refused to say exactly how the government would pay for this increase.
The £8 billion a year extra funding is based on the NHS Five Year Forward plan put forward by NHS England's chief executive Simon Stevens, however many health service believe this plan is too optimistic, and that the NHS will require even more funding.
The plan envisages the NHS finding £21 billion in savings over the next five years, efficiencies which many say has never been achieved to date.
The Conservatives' victory will mean that it will be full steam ahead in the move towards integrating health and social care – a change which it is hoped can deliver better patient care and help control costs.
Earlier this year George Osborne unveiled plans for the Greater Manchester region to take control of a devolved health and social care spending in one pooled budget (dubbed 'Devo Manc') and this model is set to be replicated across England over the next five years.
While this will undoubtedly be a major reorganisation of how health and social care works, the Conservatives will resist any suggestion that this is another 'top down reform', and will try to retain existing organisation structures.
Implications for pharma
For the pharmaceutical industry, the Conservative victory will be welcome in as far as it represents a degree of stability and predictability. Among the most important issues for pharma are the future of the market access arrangements in England and the rest of the UK, which have become badly fragmented.
The Conservatives have pledged to retain the Cancer Drugs Fund in its existing form – something which Labour had pledged to alter. Before the election, then Life Sciences Minister George Freeman announced an the 'end to end' review of the environment for life sciences, which promises to create a rational pathway for innovative new products from R&D, to regulatory approval, NICE review and then to use on the NHS.
The so-called Accelerated Access review is now likely to resume, but pharma will undoubtedly keep its optimism in check, having been disappointed by previous initiatives, such as the new PPRS pricing agreement.
Meanwhile, David Cameron has promised an 'in-out' referendum on the UK's membership of the European Union in 2017, if talks to reform the EU fail. This uncertainty has already spooked businesses in the UK, and is likely to cause huge uncertainty over the next two years.
