Cameron and Clegg forge historic coalition

David Cameron will begin work today on putting together his historic new coalition government with the Liberal Democrats.

David Cameron will begin work today on putting together his historic new coalition government with the Liberal Democrats.

Following his triumphant arrival last night at No 10, the new Conservative Prime Minister declared that it would be a “full and proper” coalition between the two parties.

No 10 confirmed that Nick Clegg had been appointed Deputy Prime Minister, serving as one of five Lib Dem ministers in the new administration.

They are thought to include his chief of staff Danny Alexander, who was being tipped for Scottish Secretary, and children’s spokesman David Laws – both members of the Lib Dem team which negotiated the coalition deal with the Tories.

Other posts confirmed last night were George Osborne as Chancellor and William Hague as Foreign Secretary. Liam Fox as Defence Secretary and Andrew Lansley as Health Secretary were also thought to have retained their shadow cabinet portfolios.

On the Lib Dem side it is thought that there will be Cabinet jobs for treasury spokesman Vince Cable and home affairs spokesman Chris Huhne, as well as a number of junior postings.

The appointment of so many Lib Dem ministers means that a number of Tory shadow ministers will be out of luck and one of Mr Cameron’s first tasks may be to placate those who are among the disappointed.

Following a late-night meeting of Lib Dem MPs and the party’s federal executive to endorse the deal, Mr Clegg sought to reassure his supporters in the country who were unhappy at the idea of a coalition with the Conservatives.

“I can imagine this evening you will be having many questions, maybe many doubts, about this new governing arrangement,” he said.

“But I want to assure you that I wouldn’t have entered into this agreement unless I was genuinely convinced that it offers a unique opportunity to deliver the kind of changes you and I believe in.”

Details of the power-sharing agreement hammered out over five days of negotiations began to emerge in last night in Westminster briefings.

Under the terms of the deal the UK will move to five-year fixed-term parliaments with the next election to be called on the first Thursday of May 2015.

On the central issue of reducing Britain’s record £163bn (€192bn) deficit, they will go ahead with the Tories proposed £6bn (€7bn) of spending cuts this year.

The will also scrap the bulk of the planned increase in national insurance contributions for employers.

But instead of getting rid of the rise for employees, there will be a “substantial increase” in personal tax allowances to benefit low and middle-income workers, as the Lib Dems had been calling for.

The Lib Dem manifesto pledge to take everyone earning under £10,000 (€11,700) out of income tax altogether will be a long-term goal with “real terms steps” being taken each year, although with no timetable set for its achievement.

The Lib Dems have also won a referendum on changing the Westminster voting system – from first-past-the-post to the additional vote rather than the full proportional representation they had wanted.

The Conservatives accepted that their plans to exempt estates worth up to £1m (€1.17m) from inheritance tax were unlikely to be implemented – while Lib Dem promises of a “mansion tax” on £2m-plus properties will also be abandoned.

The Lib Dems will not be required to support proposals for a tax break for married couples – although the Tories remain hopeful it would be approved.

But they will sign up to a commitment not to join the European single currency and to legislation requiring a referendum on any proposed transfer of powers to the European Union.

And the Conservatives will retain their promise of a cap on immigration and implement in full their welfare reform and school reform programmes.

In another area of significant disagreement – Trident nuclear missiles – the new joint administration will be committed to “the maintenance of Britain’s nuclear deterrent”.

But the Liberal Democrats will be allowed to “continue to make the case for alternatives” and insist that the renewal of Trident be scrutinised to ensure it offers value for money.

Nuclear power is another of several issues where different positions will be allowed.

There was agreement on a series of civil liberties-related policies, such as scrapping the ID card programme and its national register and the next generation of biometric passports, reviewing libel laws and further regulation of CCTV cameras.

There was also agreement on imposing a levy on banks and tackling excessive City bonuses but a independent commission will be set up to decide which party’s different visions of how to split up the banking sector should be implemented.

Gordon Brown, whose dramatic resignation last night paved the way for the new government, was back home in Scotland today with his wife Sarah and their two children.

It is thought that he will now stand down as an MP and quit politics altogether - friends said that they expected him to concentrate on charity work.

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