Conservative - Lib Dem coalition: Both sides claim victory but pact is finely balanced

Published on Thursday 20 May 2010 23:09

DAVID Cameron last night appeared to have kept enough of his big-ticket policies intact to claim that his party had emerged victorious from the coalition negotiations.

• Nick Clegg listens to PM as the coalition document is launched

Despite many policies being kicked into the long-grass and back-bench disquiet in both parties, the Prime Minister kept his plans to make 6 billion of spending cuts this year, to scrap Labour's planned "jobs tax" and to cap immigration.

But yesterday's deal was a genuine compromise with the Lib Dems. In addition to their 20-odd seats in the government there were enough Lib Dem inspired policies for Nick Clegg to claim that a great deal of progress had been made.

Important concessions have been made to the Liberals, including fixed-term parliaments, implementation of the Calman Commission and the green tinges to transport policy.

While Tory policies that they objected to including a flat-rate levy on non-domiciled individuals and the removal of their policy to scrap Labour's health targets have been abandoned or are being reviewed.

Yesterday Mr Cameron said he was confident the deal could deliver "strong stable government" for five years.

"Our visions for the future and the values that inspired them are strengthened and enhanced by the two parties coming together," Mr Cameron said.

The deal could also help Mr Cameron's modernisation agenda for his own party. By being forced to do business with the Lib Dems he has been compelled to move his policies into the centre ground – a move that fits in to his vision of a modern Tory Party.

Last night some Tory MPs were privately expressing the opinion that the real losers from the deal were the right wing of their party. The deal rules out going into the euro in this parliament, despite the Lib Dems' wish to enter the single currency when conditions are right.

The only real concession to the right wing Tories is the Iain Duncan Smith inspired welfare policies that include reassessing all incapacity benefit claimants for readiness to work and putting all those deemed fit onto Jobseekers' Allowance.

Balance of power revealed by coalition commitments

Transport

Establish a high-speed rail network to help create a low-carbon economy. "Our vision is of a truly national high-speed rail network for the whole of Britain," the document states. It concedes that financial constraints means this will have to be done in phases.

&#149 Support sustainable transport initiatives, including the promotion of cycling, and encourage joint working between bus operators and local authorities.

&#149 National recharging network for electric and plug-in hybrid vehicles.

Defence

THE coalition promises to maintain the nuclear deterrent, while scrutinising renewal of Trident for value for money. Lib Dems will continue to make the case for alternatives. Government to play a strong role in the Nuclear Non-Proliferation Treaty Review Conference and press for continued progress on multi-lateral disarmament.

Cuts to Ministry of Defence costs by at least a quarter. Ensure service personnel get more rest and provide support for former personnel to go to university.

More support for veterans' mental health needs. Review of rules on awarding medals.

Pensions and Older People

A PLEDGE to restore the earnings link for the basic state pension from next year, with an assurance that pensions will increase in line with earnings, prices or 2.5 per cent – whichever is greater.

Default retirement age is to be phased out, with review established to set a date for official state retirement age to be 66.

Public-sector pensions will be the subject of a commission to investigate affordability. General pledge to simplify rules on occupational pensions in an attempt to "reinvigorate" the sector.

Winter fuel allowance and free TV licences will be protected.

Europe

UK WILL not join, nor prepare to join, euro during this parliament.

No further transfer of sovereignty over next parliament. Any future treaty transferring powers must be subject to UK referendum.

Look at creating UK Sovereignty Bill. Press for European Parliament to meet only in Brussels – currently sits some of time in Strasbourg. UK will not take part in setting up European public prosecutor. Backing for further EU enlargement.

Lib Dems wanted to join euro when conditions were right. This should appease Eurosceptic Tory wing.

National Security

THE government will review all counter terrorism legislation in the UK, including control orders that restrict the movement of suspected terrorists, and will try to find a "practical" method by which telephone intercept evidence can be allowed in court.

In order to increase the number of foreigners that can be deported because of a threat to national security, the government is to attempt to expand the number of countries offering a guarantee that any deportees will not be tortured.

The Lib Dem manifesto was silent on terrorism, so the policy is all Tory.

Taxation

INCREASE in personal IncomeTax allowance to 10,000 to help lower- and middle-income earners. First budget will see an increase in personal allowance from April next year. Conservative proposal to increase employer National Insurance thresholds will go ahead to stop Labour's jobs tax.

The Conservatives' flagship policy to increase the Inheritance Tax threshold to 1m is a casualty. The Tories wanted flat-rate levy on all non-doms. The coalition document has reduced this to: "We will review the taxation of non-domiciled individuals."

Constitution

FOR Scotland, the document promises to "implement the proposals of the Calman Commission". Implementation of Calman would see the Scottish Parliament given the power to vary income tax, power over stamp duty and more legislation devolved to Holyrood. There is also a pledges for a referendum to be held on further Welsh devolution.

The West Lothian Question, first posed by Tam Dalyell, which asks why, in the post-devolution era, Scottish MPs should have the right to vote on issues that only affect England, will be the subject of a commission.

Immigration

THE coalition will introduce an annual cap on the number of non-EU immigrants. There is an intention to reduce the flow of migrants from new EU countries in the future.

Creation of a dedicated Border Police Force within a revised Serious Organised Crime Agency, which will improve border controls and try and clamp down on drug smuggling and people trafficking.

Reintroduction of exit checks at borders and a look at ways to speed up asylum applications.

The detention of children for "immigration purposes" to be ended.

Civil Liberties

DOCUMENT will introduce a Freedom Bill, scrap ID cards, the National Identity register and the ContactPoint database. The next generation of biometric passports will be halted.

Finger-printing of children at school without parental permission to be outlawed.

Human Rights Act lives to fight another day. The Conservative manifesto promised to replace the Human Rights Act with a UK Bill of Rights, but that promise was replaced with a commission to look at a British Bill of Rights. Key Conservative policy parked.

Westminster Reform

THE establishment of five-year, fixed-term parliaments, governed by a controversial rule that means dissolution votes must be passed by 55 per cent of the house.

A referendum on electoral reform that will include a question on the introduction of the alternative vote system for Westminster elections.

The creation of, fewer, larger and more equal sized constituencies thereby reducing the number of MPs sitting in the house.

The public will be given the right to recall errant MPs, and a committee will examine a "wholly or mainly" elected House of Lords.

Foreign Affairs

PROGRESS a shared resolve to safeguard the UK's national security and support armed forces in Afghanistan and elsewhere. Push for peace in Middle East with a secure Israel living alongside a sovereign and viable Palestinian state. Establish new "special relationship" with India and seek closer engagement with China, while standing firm on human rights.

Maintain a strong, close and frank relationship with the United States.

Before the election, Lib Dems had called for an end to the war in Afghanistan; document says it will support armed forces there.

Banking

BANKING system to be reformed, with banking levy introduced. "Robust action" to tackle "unacceptable bonuses". Plans to ensure a flow of funds to small businesses. Independent commission to look at separating retail and investment parts of banks. Joining the euro during this parliament is ruled out. Single agency to be created to tackle serious economic crime, taking over from the Serious Fraud Office, Financial Services Authority and the Office of Fair Trading.

No sign of the "people's bank bonus" proposed by the Conservatives.

Energy and Climate Change

LIB Dems will be able to maintain opposition to nuclear power, but this will not prevent Conservatives building more nuclear power stations, provided they are not publicly subsidised. Lib Dem spokesman will speak against the policy and MPs will abstain in parliamentary vote. Nuclear power will not be confidence issue.

No third runway at Heathrow and no permission for extra runways at Gatwick and Stansted. Air passenger duty replaced with per-flight duty. Ofgem to establish security guarantee for energy supplies.

Offshore grid for wind power.

Deficit Reduction

MAIN burden of deficit reduction to be tackled by reduced spending cuts, rather than tax rises. No rise in National Insurance. Measures to protect those on low incomes. Creation of an independent Office for Budget Responsibility to forecast growth and borrowing for forthcoming emergency budget.

Major cuts to "non-frontline services" in 2010-11. Full Spending Review this autumn. Reduced spending on Child Tax Fund and tax credits for higher-earners. Cut quangos.

Both parties wanted cuts, but the Tories plans for 6bn cuts get the green light.

Welfare and Post Office

End all existing welfare-to-work schemes, creating a single new programme.

&#149 Ensure Job Seeker's Allowance claimants aged under 25 referred to new programme within six months.

&#149 Reassess all claimants of Incapacity Benefit for readiness to work – those deemed capable of work to be moved on to Jobseeker's Allowance.

&#149 Work for Yourself scheme, to help start-up businesses with loans and advice.

&#149 Inject private capital into the Post Office, raising prospect of part-privatisation.

England-only policy

Given that England has separate education, health and legal systems, much of document's contents apply only south of the Border.

&#149 The coalition will extend anonymity in rape cases from victims to include defendants.

&#149 On schools, the central Tory plan to smash the state monopoly and allow charities, businesses and groups of parents to set up new "free schools", using taxpayers' money, remains intact.

&#149 Missing is a key Tory pre-election pledge – scrapping government-imposed targets in the NHS.