The initial agreement was published on 12 May 2010. It consisted of a seven-page document, in 11 sections. In the foreword, it stated "These are the issues that needed to be resolved between us in order for us to work together as a strong and stable government". Of the 57 Liberal Democrat MPs, only two refused to support the Conservative Coalition agreement, with former party leader
Charles Kennedy and
Manchester Withington MP
John Leech both rebelling against. The 11 sections were as follows: •
Deficit Reduction •
Spending Review – NHS, Schools and a Fairer Society •
Tax Measures •
Banking Reform •
Immigration •
Political Reform •
Pensions and Welfare •
Education •
Relationship with the EU •
Civil liberties •
Environment Deficit To tackle the
budget deficit and
national debt, the agreement detailed "significantly accelerated reduction in the structural deficit" over the Parliament, with £6,000,000,000 cuts to be made in the financial year 2010–11, with plans to be published in an
emergency budget within fifty days.
Spending In spending, the agreement committed the government to a full Spending Review of government including a full Strategic Security and
Defence Review to be completed by the Autumn, an increase in
National Health Service funding in real terms and funding of disadvantaged pupils from outside the normal education budget. It would also establish an independent commission to review the long term affordability of public sector pensions, and restore the earnings link for the basic state pension from April 2011. Britain's
independent nuclear deterrent would be maintained, but the proposed
replacement of the Trident system would be reviewed for value for money.
Tax In
taxation, the agreement committed to increasing the personal income tax allowance to £10,000 by 2015 to take many of those on the lowest salaries out of the tax system. The de-prioritising
Inheritance Tax cuts, and also laid out measures and arrangements on the issues of marriage, aviation, non-business capital gains taxes, and
tax avoidance. The planned 1% rise in
National Insurance will be partially scrapped.
Banking In the
banking system, the agreement announced various reforms to "avoid a repeat of Labour's financial crisis" and stimulate the flow of credit, including the introduction of a banking levy, and controlling unacceptable
bankers' bonuses and regulatory reform.
Immigration The section regarding
immigration, markedly shorter than all others, merely stated in one paragraph that there would be an annual cap on the number of non-EU workers admitted to live and work in the UK, with the mechanism decided later. The practice of child detention for immigration purposes would also be ended.
Political reform As part of reform of the political system, the parties agreed to creating
fixed-term parliaments. An early motion would set the date of the
next general election as the first Thursday of May 2015, with later legislation establishing five-year fixed terms and introducing a new minimum of 55% of MPs supporting a motion before
Parliament could be dissolved outside this timetable. Both parties would
ensure their MPs voted for the introduction of a
Referendum Bill on
the question of whether the electoral system for electing MPs to the
House of Commons should change from
first-past-the-post to
alternative vote, and whether MPs constituencies should be changed in size or number. On the issue of
devolution, the parties agreed to establish a committee on the
West Lothian question (Scottish MPs in Westminster voting on English issue), implement the
Commission on Scottish Devolution proposals, and offer a referendum on further devolution for
Wales. Other political reform measures included introducing the power to recall MPs, bringing forward the
Wright Committee proposals for Commons reform, and introducing proposals for reform of the
House of Lords by December 2010, review local government and voter registration.
Pensions and welfare In pensions, compulsory retirement at sixty-five years of age would be abolished, although the earliest age for the state pension would be increased from 65 to 66, from a date no earlier than 2016 for men, 2020 for women. Changes would be made to the
Jobseeker's Allowance and welfare to work systems, including a rule that receipt of benefits would be conditional on willingness to work. Payments would be made to
Equitable Life policy holders.
Education A "significant" funding premium for children from poorer backgrounds will be established, incentivising schools to take them in and giving them more resources to devote to them. In
schools,
new providers would be allowed to enter the state schooling system where demanded, schools would be granted greater freedom over the
National Curriculum, and schools would be "held properly accountable." The parties would await
Lord Browne's proposals for
higher education with the agreement stating the Liberal Democrats may abstain if they do not like proposed changes (i.e. if there was to be an increase in tuition fees).
European Union As part of the agreement the parties ruled out joining the
euro while the coalition was in force. The parties agreed Britain would be a "positive participant" in the
European Union, although there would be "no further transfer of sovereignty or powers over the course of the next Parliament", ensured by amendment of the
1972 European Communities Act requiring referendums on future treaties, and requiring
primary legislation before any
Passerelle clause could be enacted, and through examination of a possible United Kingdom sovereignty bill. Other measures include non-participation in establishment of a
European Public Prosecutor's Office, limiting the
Working Time Directive, deciding the stance on the forthcoming EU budget, and pressuring the
European Parliament to abolish its
seat in Strasbourg and maintain only a
single seat in
Brussels.
Civil liberties Agreement on
civil liberties included measures to "reverse the substantial erosion of civil liberties under the
Labour Government and roll back state intrusion." This included: the scrapping of the
National Identity Card and register, the
next generation biometric passport and the
ContactPoint database. The Scottish model of implementation of the
United Kingdom National DNA Database was to be extended to the whole of the United Kingdom. The
Freedom of Information Act would be extended, and a Freedom (Great Repeal) Bill is to be introduced. Other reviews, reinforcements and repeals would take place in the fields of the right to
trial by jury, the right to
non-violent protest,
libel laws and
freedom of speech,
anti-terrorism legislation, regulation of
CCTV, storage of internet and email records, and creation of new
criminal offences. Fingerprinting of children at school without parental permission was to be outlawed.
Environment In pursuit of the parties' policies on creation of "a low carbon and eco-friendly economy", a range of measures would be adopted. In
transport, a
high speed rail network would be established, while the
proposed third runway at
Heathrow Airport would be cancelled, and no new runways would be approved for
Gatwick Airport or
London Stansted Airport. The legislation required for the
building new nuclear power stations would proceed, without public subsidy for the projects. Any new
coal-fired power stations would be required to implement
carbon capture and storage, while the targets for energy from renewable sources would be increased, subject to the advice of the
Climate Change Committee. Other measures include a
smart grid,
smart meters and
feed-in tariffs, a green investment bank would be created, and promotion of
anaerobic digestion of waste for energy,
marine energy, home energy improvement, green spaces and wildlife corridors, and electric car recharging networks.
Home Information Packs would be abolished, albeit retaining the energy performance certificates. Import or export of illegal timber would be criminalised. ==Final agreement==