Unfortunately for the Labour party they've found themselves in an identical position to the Tories during Blair's reign. They simply could not find an electable leader. In fact even now with Cameron they've only just managed to do it, with him needing two attempts to actually win a majority. A very slim majority at that.
On Labour's side they're faced with a very poor selection of candidates right now and whilst Burnham is the favourite and probably will win the leadership, I can't see him becoming PM unless it's as part of a coalition next time out.
The party needs a radical new face and some serious fresh thinking to combat the threat of a Tory government currently holding all the cards with free reign to mess the country up in the face of no shackles from within parliament and no viable opposition to hold them to account. Although I don't consider myself particularly aligned with him, Chuka Umunna would have been the best leader of the party as he's young, fresh and different. The guy isn't tainted by being part of the previous Labour government, he looks statesmanlike and, let's not beat about the bush, he's black, which would give him (rightly or wrongly) extra kudos from certain sections of the electorate.
I believe Umunna has been very clever with his withdrawal from the leadership race and believes that the party will take longer to heal than between now and the next general election, so has left the party to fight what will likely be another losing election campaign in five years time under somebody else's stewardship, ready for him to rise to power at a time when the party will be in a far stronger position as the groundswell of anti-Tory support will be too great for Osborne's Conservative's to bear.
Many people see this as a cycle just as the Thatcher/Major years gave way to the Blair/Brown years and we're therefore in for at least a decade of the current government. However, the Tory majority is so slim, and the divisions within the party so pronounced that their biggest enemy right now is themselves. Whilst under normal circumstances I'd expect them to hold power next time round, it's very difficult to see how they'd actually gain seats (as incumbent governments never do) when we next go to the polls, after years of austerity measures and a flailing economy. And it will be a flailing economy because overwhelming evidence from across the globe has shown time and time again that austerity measures during and after a recession simply do not work.
With the state of the country meaning the swing voters are going to have abandoned the Tories and regretted their decision in letting them in this time, the Lib Dems likely to have a bit more fight in them under a new leader and swelling membership - and crucially, having shed the poisonous image of Clegg the liar and cosying up to the Tories (a mistake they'll surely never make again in our lifetimes) - how will the Tories have any hope of holding power? Between now and then their majority is only likely to decrease, if anything, and it's not inconceivable that their majority could have even been eroded completely before the next election is called, meaning they'd only be a minority government by that point anyway.
What you need then is an opposition party leader capable of really sticking the knife in and winning back middle England. The Tories will be sitting ducks but Burnham isn't going to be the man with the rifle to finish them off. Instead we'll be back to where we were after Gordon Brown. The economy in a shit state but the incumbent government's opposition not yet credible enough to be considered a worthy alternative. Suddenly we're all looking at coalition options once more.
UKIP support will no doubt increase, as will that of the Green party. But can either party really make any gains in terms of seats won? Especially after the redrawn boundaries to favour the Tories? It seems any gains they could really make will only be very marginal. So we're back to seeing what happens in Scotland. SNP support will no doubt surge and the desire for a second referendum on leaving the Union will rise to the top of the agenda once more. Only this time faced with a Tory majority government and an economy that's doing them no favours, they'll have no reason to vote to stay, feeling they'd be better off by themselves.
So it's down to Scotland and whether the Lib Dems can regroup to become a credible party again. Centrist voters will be missing the Lib Dems right now because both Labour and the Tories have veered off left and right respectively. Burnham may bring Labour closer to the Blairist centre but there's definitely room for the Lib Dems to fight to gain back many of the seats they lost to Tories who'll be very unpopular come the next election, and if they can get them back, we're looking at no overall majority once more.
So what would happen in a coalition next time out? Lib Dems won't be touching the Tories again, but similarly Labour know they can't side with the SNP. UKIP may be natural allies to the Tories whilst the Greens would be open to working with Labour, but neither party has the clout to win enough seats under the present system to be of significance.
That leaves us with the Lib Dems, who had looked all but irrelevant after the May election, potentially holding the balance of power once more. Their new leader strikes a deal with Burnham's Labour, or we are left with a Tory minority government, who'd be battered without the power to push through their policies and unlikely to make it through a full five year term.
OK so this is all a long way off right now and much can change in politics. But is Burnham going to be the man to lead a resurgent Labour party back to power? No. However, is David Cameron's tiny minority going to hold up after years of cuts, poverty and economic depravity? Of course it won't.
The future of multi party politics dictating coalitions and pacts that we all thought was on the cards before this year's election will SURELY bear fruit next time out because otherwise how can anyone realistically expect a majority?
Excellent, more or less sums up my thoughts but in a much clearer and articulate way than I could manage. The only area Im not sure about is the future of UKIP and The Lib Dems. UKIP exist as an anti-EU party, now that they have got their referendum their raison d'etre diminishes enormously and I can see them fading. The referendum will also flush out and neutralise the anti-EU Tories if the vote is in favour of remaining in the EU. The Lib Dems took such a drubbing at the election I find it difficult imagining them being anything other than a shadow of their former selves for years and years, if ever again. I think the Greens will become stronger but will always be a marginal party which leaves Labour and the Tories, and you can bet the Tories will do everything within their means over the next 5 years to make Labour a party of the past (greater independence for Wales anyone). The SNP are not going to go away in Scotland and they have the most able party leader by a country mile in Nicola Sturgeon. Labour have to undertake a fundamental change of direction, something which, at the moment, they do not look capable of doing. If they fail to do this I can actually see the Labour party splitting into two or three smaller parties - after all, in all but name they are already well down this road. Where that will leave everything **** knows!!!!