Six months ago, the polls suggested Labour was dead and buried and the Conservatives were heading for a sizeable Parliamentary majority. But as we near the election, the gap has narrowed and all the chatter has been about the prospect of a hung parliament. Clearly, the chance to play ‘power broker' offers Nick Clegg and the Lib Dems much to gain from such a situation, but they also need to be very careful not to undermine their position or to play their hand too soon. At their Spring Conference, Clegg said he was not ‘the kingmaker', but also said that he would not back early cuts to public spending, whilst also praising Thatcher's attack on the Trades Unions. Confused thinking or political pragmatism? To actively campaign for a hung parliament would be electorally disastrous for the Lib Dems, so they'll carry on trying to present a coherent set of policies whilst knowing a hung parliament offers their best prospect of exerting influence.

If no party can win a majority of MPs, then it's almost impossible to predict what the consequences would be. Inevitably there will be plenty of behind the scenes negotiations and posturing for the cameras and it may not just be the Lib Dems who are able to flex their muscles. Other smaller parties from Scotland, Wales and Northern Ireland may also extract concessions in return for their support. Since every major decision will need to be negotiated, the pace of change is likely to be slow and we can expect more continuity of policy. However, the one aspect of policy where there seems to be a major difference between the Tories and Labour - on how fast to public spending - will need to be resolved or the financial markets are likely to be ‘spooked' which could mean a worsening economic outlook.

But the Lib Dems would be well advised not to get too far ahead of themselves. A hung parliament is a rare event in British politics, occurring only once in over 50 years. On that occasion, in 1974, Harold Wilson led a minority government for less than a year, before calling another election and gaining a tiny majority of 3 seats. A Lib-Lab pact held things together until 1977, but when the Liberals withdrew their support, a minority government could only stumble on weakly until 1979. You'd be forgiven for thinking a hung parliament was a likely outcome in this election, but history suggests it's still a remote possibility.