LONDON (Reuters) - Following are some of the key policies in a coalition agreement between Britain’s Conservative Party and the Liberal Democrats, according to a Conservative source. The agreement calls for:
— Lib Dems get five cabinet positions. Their leader Nick Clegg becomes deputy prime minister. Some junior ministerial posts will also go to Lib Dems.
— A significantly accelerated reduction in the structural budget deficit over the course of a parliament, the main burden to be borne by reduced spending rather than increased taxes
— Six billion pounds in cuts to non-frontline services this financial year subject to advice from the Treasury and Bank of England
— partially reverse Labour’s planned increase in payroll tax
— create independent Office for Budget Responsibility
— The Conservatives agreed to scrap their commitment to raise the death tax threshold to 1 million pounds ($1.48 million) over the next parliament.
— Instead the two parties have agreed to adopt the Lib Dem policy of raising the personal tax allowance to 10,000 pounds as a long-term goal, with a promise to take “real terms steps each year toward this objective.”
— The parties did not agree to a Lib Dem call for a “mansion tax” on high-value properties or to stop tax relief for higher rate pensioners.
— The parties agreed to a substantial increase in the personal income tax allowance from April 2011, with the benefits focused on the lower and middle classes.
— This will be funded by dropping plans to increase the employee threshold for the national insurance payroll tax and by raising capital gains tax for non-business assets so it is closer to the level of income tax.
— The Lib Dems have agreed not to oppose the Conservatives’ planned marriage tax allowance but are not required to vote for it.
— The two parties agreed to introduce a banking levy, to tackle bonuses and to create a more competitive banking industry.
— They committed to get more credit flowing to smaller and medium-sized businesses. The government will look at the Conservative proposal for a loan guarantee scheme and the Lib Dem proposal for net lending targets for nationalized banks and decide which is the best one.
— Set up an independent commission to investigate whether to separate retail banking from investment banking. Its interim report is due within a year.
— They will make proposals to give the Bank of England control of macro-prudential regulation and oversight of micro-prudential regulation
— Fixed-term parliaments, including the current parliament, with the next general election to be held on the first Thursday of May 2015.
— A referendum on the alternative vote system
— A wholly or mainly elected House of Lords
TRIDENT NUCLEAR-ARMED SUBMARINES
— The agreement commits the government to maintaining Britain’s nuclear deterrent. The renewal of Trident should be scrutinized to ensure value for money. The Lib Dems will continue to make the case that Britain should look at alternatives to replacing Trident.
— The Lib Dems will maintain their opposition to nuclear power while permitting the government to bring forward the national planning statement for ratification by parliament so that new nuclear construction becomes possible.
— The new government will not join the euro or propose to join the euro. It does not propose to transfer any new powers to the European Union. It will legislate for a referendum lock that requires any government proposals to transfer new powers to the EU to be put to a referendum.
— A cap on immigration
— An end to child detention in immigration centers
— The Conservatives’ welfare reform programme to be implemented in full
— The Conservatives’ plans for schools reform can go ahead provided all schools are held properly accountable.
— Additional funding for the pupil premium, which would raise school funding for poor children.
— The parties agreed on a major programme of civil liberties, including a “Freedom” bill. They would scrap planned identity cards, the national identity register and the next generation of biometric passports.
— They would extend the scope of the Freedom of Information Act, review libel laws to protect freedom of speech and further regulate closed-circuit television cameras.
— They back a major environmental programme to encourage a low-carbon, eco-friendly economy, including a green investment bank and a smart electricity grid.
Reporting by Adrian Croft; Editing by