U.K. Prime Minister David Cameron swept back into office after a general election that saw his Conservative Party win an unexpected majority in the face of a surge in nationalist support in Scotland.

With Cameron immediately renewing his pledge to hold a referendum on British membership of the European Union, the result throws up questions about Britain’s constitutional future. For now, the surprise victory was welcomed by markets, with stocks and the pound rallying as it became clear Cameron had defied forecasts of a hung parliament to easily defeat Ed Miliband’s Labour Party and govern alone.

“I truly believe we’re on the brink of something special in our country,” Cameron, 48, told reporters outside his 10 Downing Street residence on Friday. “Our manifesto is a manifesto for working people and as a majority government we will be able to deliver all of it.” That includes an “in-out referendum on Europe,” he said.

The result is a vindication of the Tories’ campaign based on their record of producing an economic recovery and cutting a record budget deficit. That same austerity agenda was rejected by the Scottish National Party of Nicola Sturgeon, whose surge reopens doubts over the integrity of the U.K. just eight months after Scots voted “No” to independence.

And:

Armed with a parliamentary majority, Cameron will be free to pursue his party’s policy platform including reductions in income tax and inheritance tax and the chance for tenants to buy their homes from non-profit housing associations. He’s also planning 30 billion pounds ($46 billion) of fiscal consolidation, with cuts in welfare spending planned.

And:

Cameron reached out to Scotland, saying his Conservatives would govern as a “party of one nation, one United Kingdom.” He said he’d meet his pledge to devolve more powers, while also ensuring “fairness” for England.

And:

“While Cameron has had a great night, I suspect his problems in some way have only just begun,” Tim Bale, professor of politics at Queen Mary University in London, said in an interview. “It’s a very tight majority which means he will have to make promises to people and do things to people to keep them on board on Europe.”

David Fuller's view

I think the Conservatives deserved to win on the basis of economic performance.  I am delighted that George Osborne has another 5 years to guide the UK economy from the indebted and depressed situation he received after the previous election.  This remains a challenge but no other party or possible coalition has the policies for this challenge.  I am relieved that the Tories have an overall majority, since that is the key to a strong government.

How will the UK Government deal with Scotland?  By governing as a “party of one nation, one United Kingdom”, as Cameron said above.  This will probably include a more federalist approach, devolving more powers to all regions, including England.  The Conservative majority will be viewed as a blow by Nicola Sturgeon of the SNP as they will have considerably less influence outside of Scotland than she and Alex Salmond had expected.

How will the UK Government deal with the in-out referendum on Europe?  It has no credible reason not to proceed with it as promised by Cameron.  This government wants a reformed and economically viable EU, which is no longer interfering with UK economic policies and also a drag on UK resources.  It has been singularly unsuccessful in shifting economic views in the Socialist EU but now has a slightly stronger hand in these negotiations.  German Finance Minister Wolfgang Schaeuble’s views on this possibility of ‘Brexit’ are interesting:

"I would prefer that the British could also agree, especially since I would not like the British to be driven out of the EU in the end. It is German policy that one does not support the voices that can imagine an EU without the UK."He spoke of the damage such a move would inflict on the EU."Try then to explain to an Indonesian: Europe is an incredibly strong, dynamic entity but unfortunately not in a position to keep a globally oriented country like Britain as a member. This loss of reputation alone would be a catastrophe."

I think a majority of UK voters, me included, would like to remain within a reforming and economically viable EU.  However, I support the democratic process of this future referendum and would probably vote to leave if there is no positive shift by EU officials such as EU Commission President Jean-Claude Junker.

(See also: EU ready to hear Cameron ideas, seek ‘fair deal’ for Britain.)  

What factors may have contributed to the Conservative Party’s surprisingly strong election victory?

This is conjecture but there were several contributing factors.  Moreover, undecided voters usually reject what they consider to be riskier or less influential candidates.   

1) Labour was viewed as a riskier option for the economy; 2) Cameron was seen as more prime ministerial than Miliband, ditto Osborne versus Balls; 3) Voters realised that it was a very important two-party contest; 3: Cameron was more convincing in the last week of the campaign; 4) Ed Miliband, while more confident and energetic than expected, lacked credible economic policies; 5) Miliband’s ‘Kinnock moment’ was his limestone commandments slab for the No 10 garden; 6) Most important of all, Nicola Sturgeon may be the toast of Scotland but she way overplayed her hand, frightening and angering English voters with talk of propping up Miliband and keeping the Tories out of office.

As for Sturgeon in Scotland, she is certainly feisty, articulate and energetic.  However, when one is at the pinnacle of popularity and expectations, there is nowhere to go from there other than downwards.  This may not take long because her understanding of wealth creation is limited.   

Lastly, I think Tim Bale of Queen Mary University in London, quoted in the last article section above, is way too pessimistic.  Cameron has a workable majority and an experienced team.  This should be good for the UK economy and stock market.  If the Conservative Government fails over the next five years, it will have no one to blame but itself.