Britain's coalition a welcome step, says English

Britain's new Conservative-Liberal Democrat coalition Government is a welcome step towards political and economic stability for a country which remains extremely important to New Zealand, says Finance Minister Bill English.

But former High Commissioner to Britain Jonathan Hunt believes the parties are uneasy bedfellows and the coalition is unlikely to last.

Prime Minister John Key says he has sent new British Prime Minister David Cameron a text message of congratulations and hopes to talk to him by telephone over the next few days.

"I'm very confident that under his prime ministership the relationship between the two countries will go from strength to strength."

He also wished Gordon Brown, the Labour Party's defeated leader, well for the future.

Mr English told the Herald yesterday that the coalition was good news.

"This is one of our bigger markets and the sooner they get in good shape the better, but I expect it's going to take a while.

"You've only got to look at the kiwi versus the pound to see the problem."

The New Zealand dollar has hit post-float highs of about 49 pence against the British pound in recent weeks because of the uncertain economic, fiscal and political picture in Britain.

Although the pound strengthened in reaction to news of the coalition, most of its gains were shortlived amid uncertainty over the European Union's debt problems.

Mr Hunt said the Tory-Liberal Democrat coalition was likely to be a very difficult arrangement: "[They] are just not natural bedfellows.

"While the Conservatives would have to make some accommodations - with the big one the Liberal Democrats want being around changing the electoral system to MMP - I don't see how the Conservatives are going to get that far."

Although the coalition agreement included the two parties agreeing on fixed-term Parliaments - including the current one, with the next general election scheduled for May 2015 - Mr Hunt said he would be surprised if the coalition proved durable.

"It won't survive a full term. There will come a time when ... Cameron will want to try and get a full working majority."

Mr Hunt believed Mr Brown had been a very good Chancellor of the Exchequer but never appeared happy in the top job.

"I have a great respect for him - he's a very interesting, intelligent man - but he perhaps was at the place at the wrong time."

Mr Hunt saw few implications for New Zealand, which enjoyed good relations with Britain whichever party was in power.