Coalition government - the first 100 days

By Laura Kuenssberg
Chief political correspondent, BBC News channel

Only one person is ever in charge at 10 Downing Street - but what is decided behind the famous black door is now the responsibility of two men, and two parties.

The two men in question, David Cameron and Nick Clegg, barely knew each other 100 days ago.

Their two parties, the Conservatives and the Liberal Democrats, knew each other only too well.

Apart from a few isolated examples in local government, they had been at each other's throats for years.

So, as this most unlikely of political alliances reaches its symbolic 100-day milestone, should Mr Cameron and Mr Clegg be celebrating the successful birth of a new kind of politics, symbolised by their joint press conference in the Rose Garden at Downing Street on day one?

Or letting out an exhausted sigh of relief that they made it this far?

The chaos and calamity some, including the Conservative Party in a general election broadcast, warned would result from a hung Parliament has not yet come to pass.

But there are still formidable hurdles to clear before this experiment in coalition government - the first at Westminster since World War II - can be judged to have been a success.

'Further and faster'
Top of the coalition's list from day one was getting to grips with the deficit, the gap between what the Treasury takes in tax revenue and how much taxpayers' cash the government spends.

At the general election, the Liberal Democrats continually questioned the Conservatives' commitment to go "further and faster" than Labour was already planning.

But in the days after the election, it became clear to political insiders that the Lib Dem leadership was shifting its position.

Senior Conservative John Redwood, who was concerned about working with the Lib Dems, credits their change of heart with allowing coalition to get off the ground in the first place.

He told the BBC: "I argued the case immediately after the election that we should try for Conservative minority government, with the Liberal Democrats allowing us support in motions of confidence and to get through the main parts of the budget, because I didn't think at that point that the Liberal Democrats would buy into the kind of Budget we were recommending.

"When I discovered that the Liberal Democrats were coming around to the view that we needed a tougher and tighter Budget, then it was was clear you could go further than just having a minority government."

'Peas in a pod'
So, even from day one, in the light-filled Downing Street garden, the message was less sunny.

Like Labour, the coalition believed major reductions in public spending would be necessary to deal with the public finances.

But the pace and scope of cuts would be faster and deeper - the coalition's ambition is to eradicate the deficit completely by the end of this parliament. Coalition ministers presented a united front on the need to act now, and act boldly.

Indeed, when it comes to those seated around the cabinet table or in junior government roles, the two parties have gelled surprisingly well.

One cabinet minister, describing the body language between Clegg and Cameron, told me they were like "peas in a pod".

It probably helps that there are 23 Lib Dem ministers - including nearly half of the parliamentary party - scattered around various government departments, with the deliberate intention of embedding the party in the administration.

But for all that many of the Lib Dems and Tories with government jobs appear to be thriving, in recent weeks there has been a tacit admission that they have not done as well as they might have in selling their core message to the public, many of whom are nervous about the impact of the squeeze on spending.

Lib Dem anxiety

There has been anxiety over the Academies Bill, a flagship Conservative policy, that will reform education in England.

There has been nervousness about the scale of the reforms to the NHS in England - a plan that was not in the coalition deal thrashed out in the aftermath of the election.

It should be noted some of the other tensions in government are traditional disagreements between departments, not coalition clashes - differences between the Treasury and the MoD over who pays for Trident for example.

But, equally, it is true to say that anxiety about the coalition runs deeper among Liberal Democrats than it does among Conservatives.

Many harbour a fear about losing their identity; being swallowed up by the party that outnumbers them at a rate of more than five to one in the Commons.

Their dip in the opinion polls does not do much to bolster Lib Dem confidence either.

Internal discomfort
Former leader Sir Menzies Campbell has warned Nick Clegg about entering into any kind of electoral pact or deal with the Conservatives, as some have suggested could be the answer and which would see the Lib Dem candidates not fielding candidates against Tories in areas where they could not win, and vice versa.

Sir Menzies said it should be a matter for local parties, not the leadership, to decide: "He might issue an exhortation but he could not issue an instruction.

"Every Liberal Democrat leader will tell you that [backbenchers] find the carrot a much more attractive instrument than the stick."

As the two parties move from their first 100 days shackled together in coalition towards the party conference season, there will be an inevitable focus on relationships inside the parties.

Both David Cameron and Nick Clegg are understood to be having to spend more time than ever before cajoling and soothing egos, keeping their MPs and activists on board, using the "carrot" to the best of their ability.

But that internal discomfort could well be dwarfed by the public's reaction when the cuts announced in the Budget and October's spending review begin to bite.
The speed at which Chancellor George Osborne wants to balance the nation's books is just one source of nerves for Lib Dem MPs - particularly among those who remain on the back benches, without a government position.



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Pension tax relief may be cut further

By Ian Pollock, Business reporter, BBC News


Government plans to restrict pension tax relief for the higher paid may be even more aggressive than those put in place by the previous Labour administration.

The coalition is planning to replace the big tax changes that Labour had put in place, starting next April.

These would have raised an extra £4.6bn by 2014-15.

However a Treasury consultation paper suggests a range of options, one of which might raise even more - £5.3bn.

The alternative proposals being put forward by the Treasury were welcomed by the National Association of Pension Funds (NAPF) which said they would be "less damaging" than Labour's plans.

"It's a simpler approach that that will encourage higher earners to stay in their workplace pensions, so helping protect pensions saving for all staff," said Joanne Segars of the NAPF.

Coalition plans
The Treasury suggests that each taxpayer's annual pension allowance - the amount their pension pot can grow tax free - should be slashed from the current £255,000 a year to between just £30,000 and £45,000 a year.

Under the Treasury plan, a £40,000 limit to the annual allowance - after which an extra tax bill would be generated - might be exceeded by someone whose pension entitlement in a final salary scheme had risen by just over £2,000 in a year.

Chas Roy-Chowdhury of the Association of Chartered Certified Accountants (ACCA) said the coalition's plans might catch more people in the tax net who were considerably lower paid than those targeted by Labour.

"It is still likely that many earning a lot less than the £130,000 could be affected where they are in a defined benefit (final salary) scheme," he said.

"This will depend on the valuation method and length of enrolment in the scheme but could affect even those on half the £130,000 especially if they make additional voluntary contributions (AVCs)," he warned.

Pay rise impact
To work out the increased value of someone's pension pot if they are a member of a defined contribution scheme is easy.

They are given an annual statement each year of the value of their pension investments.

However membership of a traditional final-salary scheme involves using a formula in which the rise in someone's accrued pension is multiplied by 10.

Thus a pay rise, perhaps due to promotion, which had the knock-on effect of increasing someone's pension entitlement by £4,000 in a year would currently fall within a £40,000 limit.

However the Treasury is suggesting that this annual accrual should be multiplied by much more, perhaps by 15 or even 20.

More tax
The Treasury consultation document illustrates the possible effects of the new approach.

Its figures suggest that by 2012-13, a £45,000 annual pension allowance would raise a similar amount to that expected under Labour's plans - in the region of £3.6bn.

But a lower £30,000 annual allowance would raise £4.8bn - £1.2bn more than Labour intended.

By 2014-15, an annual allowance of just £30,000 would raise an extra £5.3bn in tax while a £45,000 annual allowance would raise £3.9bn by that year.

Those estimates take into account the possibility that some taxpayers might tweak their pay arrangements to avoid breaching the new lower allowances.

Raj Mody of the accountancy firm PwC said it was possible that twice as many individuals in final salary pension schemes would breach the new limit.

For example, a 50-year-old employee in a typical final salary scheme earning £80,000 a year who, through promotion, got a 20% pay rise, could find themselves with an additional tax bill of over £10,000, he said.

"An unintended consequence of the new regime is therefore likely to be a continued shift of employers and individuals away from final salary schemes to defined contribution plans," Mr Mody added.

Labour's plans
With the highest rate of tax now at 50%, Labour had planned to restrict the amount of tax relief available to the highest paid.

It had calculated that in 2008-09 a quarter of all pension tax relief, worth £28.4bn that year, was going to the tiny minority of tax payers who earned more than £150,000 - worth an average of £20,000 a year each.

To rein in the new 50% tax relief now available on top earners' pension contributions, Labour put in place two changes due to start next April.

The first was that tax relief would be tapered away from 50% down to 20% as people's incomes rose above the £150,000 level.

The second and more profound change affected those with incomes of more than £130,000.

If the value of their employer's pension contributions, when added to their personal income, took their gross income over £150,000, then they would start to be taxed on the value of those employer contributions at a rate of as much as 30%.

This approach was widely criticised as far too complex.

Many experts suggested that the coalition, if it still wished to rein in tax relief for higher earners, should simply restrict the amount by which anyone's pension pot could grow each year before it started to lose tax relief.

That is the plan on which the Treasury is now consulting.

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Clegg rejects MPs' call for AV referendum date change

Posted on www.bbc.co.uk/news/uk-politics

Deputy Prime Minister Nick Clegg has rebuffed calls backed by 44 Tory MPs for the date of the referendum on voting reform to be moved.
Elections for the Welsh Assembly, the Scottish Parliament, the Northern Ireland Assembly and some English councils are all also due for 5 May.

The MPs fear differing turnout across the UK and overshadowing of the debate.

Mr Clegg said it was "disrespectful" to suggest voters "could not make two different decisions at the same time".

He said everyone in Scotland, Wales and Northern Ireland, plus 80% of people in England were already due to vote on 5 May 2011, so it would save them having two trips and cut costs by £17m.

But senior Tory backbencher Edward Leigh told Mr Clegg as he took deputy prime minister's questions, that the referendum should be on a different date so there could be a "proper debate" about the issue.

Earlier a Downing Street source had called reports of a revolt against electoral reform "a little exaggerated".

ormer cabinet ministers Peter Lilley, John Redwood and Sir Malcolm Rifkind have signed a Commons motion of complaint about the referendum date.

Also among the signatories to the document, tabled by Tory MP and former defence spokesman Bernard Jenkin, is former shadow home secretary David Davis.

'Odd result'
Mr Jenkin suggested ministers had room to change the date as it was not part of the coalition agreement itself.

"Therefore it is of less status than, for example, a point of principle," he told BBC Radio 4's World at One.

The choice of date, he said, should not be determined by the cost of staging the referendum but on whether it would provide a "true and fair test of public opinion".

Holding it on 5 May could lead to an "odd result" because of wide variations in turnout in different parts of the country, he added.

"One has the suspicion that Nick Clegg wants it on this date to disguise the fact that, out there, there is an awful lot of apathy about changing the voting system."

Under the post-election agreement reached by the Conservatives and Liberal Democrats, the coalition is committed to hold a referendum on adopting the "alternative vote" (AV) system.

This allows voters to rank candidates in their constituency in order of preference.

Anyone getting more than 50% of first-choice votes in the first round is elected, otherwise the candidate with the fewest votes is eliminated and their backers' second choices allocated to those remaining. This process continues until a winner emerges.

Prime Minister David Cameron, who opposes getting rid of the current "first-past-the-post" system, will campaign against such a change. His deputy, the Lib Dem leader Nick Clegg, will push for the reform.

It is feared the issue will cause inter-party strife.

The motion submitted by the 44 Tory MPs argues that referendums on issues of national importance should be held "in isolation", as turnout would be "artificially inflated" in parts of the country where elections are being held.

It urges the Electoral Commission - which has said a referendum is "deliverable" on 5 May but there are some "risks" attached to the date - to make the final ruling.

My personal view is that opponents are worried about a higher vote in favour. Perish the thought!

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PM and goal-line technology firms dispute Fifa claims

By Daniel Emery
Technology reporter, BBC News

The prime minister has backed calls for video and goal-line technology (GLT) to be used in football matches.

David Cameron's call echoes that made by makers of ball-tracking systems, along with a number of managers.

"I'm a keen follower of cricket and tennis and I think the third umpire has been a great thing... that's something football could now have a look at," said Mr Cameron.

Fifa has consistently refused to entertain the idea of using GLT.

Manufacturers of ball-tracking systems say England's disallowed World Cup goal just emphasised an ongoing problem with the sport.

Hawk-Eye and Cairos, which make rival GLT systems, say Fifa needs to rethink its current position.

"We are using technology that is 100% accurate and adds fairness to the game," Christian Holzer of Cairos told BBC News.

"Technology should not enter into the game. It was a clear statement made by the majority of the IFAB (International Football Association Board)," said Fifa general secretary Jerome Valcke in March.

But not everyone agrees. There have been calls from players, managers and coaches for a number of years, prompted by a series of controversial refereeing decisions.

British based Hawk-Eye, which uses a camera detection system, and German firm Cairos, which utilises chip technology inside the ball, both say that new technology would assist referees and make their job easier.

"The decision was unfair to the English team. Had it gone 2-2 at half-time, it would have been a very different match," said Mr Holzer.

The issue of GLT has dogged Fifa for more than a decade.

The rules of football are determined by IFAB, which consists of eight voting members. England, Scotland, Wales and Northern Ireland each have one vote, with "the rest of the world" (ie the Fifa executive) holding the remaining four.

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