Conservative-Liberal Democratic coalition government (2010)

Following the 2010 United Kingdom general election, none of the parties won a working majority and numerous coalition arrangements were mooted: a coalition between the Conserviatves and the Liberal Democrats would provide a working majority, as would a coalition between Labour, the Liberal Democrats and a number of small parties (some in the press referred to this as "the rainbow coalition"). After consultation with both the Labour Party and the Conservative Party, the Liberal Democrats decided to form a government with the Conservatives, with David Cameron as Prime Minister and Nick Clegg as Deputy Prime Minister.

Coalition agreement

The coalition is bound by a shared agreement which allows the two parties to work together on a number of issues, and sets out a formal procedure for bringing together legislation where the parties disagree (on issues such as electoral reform).

The coalition agreement between the Conservatives and Liberal Democrats commits the two parties to work together on a number of measures:

• deficit reduction
• producing a Spending Review in Autumn of 2010 that reports on how to drive efficiency in the National Health Service, schools and other public services
• to increase the personal allowance for income tax "to help lower and middle income earners"
• producing reform of the banking and financial services sector including a bank levy
• introducing an annual limit on non-EU economic migrants
• introducing five year fixed-term Parliaments
• a Referendum Bill on the Alternative Vote system and on a reduction in the number of constituencies
• raising the default retirement age
• to reform schools to allow for privately or co-operatively run 'free schools' and to change the "academies" system
• to bring forward a "Freedom Bill" or "Great Reform Bill" which would scrap ID cards and regulate or repeal what the coalition considers to be a "substantial erosion of civil liberties under the Labour Government"
• a "programme of measures" on the environment including better emissons performance standards for power generation plants, high-speed rail network rollout and other measures.

The coalition agreement includes a number of areas where Liberal Democrats are allowed to abstain: the building of new nuclear power plants, for instance. The process works by allowing a Liberal Democrat spokesmen to make a statement against a particular policy, and then Liberal Democrat MPs abstaining from the vote. In the case of the referendum on the Alternative Vote system - which the Liberal Democrats are for and the Conservatives are against - they will both agree to have the referendum, and the Conservatives will campaign against it and the Liberal Democrats for it; of course, the public will get to choose in the end.

Spending review

In October 2010, Chancellor of the Exchequer George Osbourne announced the results of the Comprehensive Spending Review. The coalition believed that cuts of £49 billion to public expenditure is required to reduce the structural deficit in the United Kingdom. It claims the structural deficit will be solved in 2015 if the Comprehensive Spending Review cuts are made. The deficit spending problem, Osbourne and the government argued, had been exarcabated by the global economic crisis and such cuts were necessary.

Before the spending review results were announced, a number of announcements had already been made. Michael Gove, the Conservative education secretary, announced the scrapping of the Building Schools for the Future program, which was a fund for building and renovation of facilities in primary and secondary education. The government had also committed not to cut money from the National Health Service, and had suggested through the benefit reform work conducted by William Hague that major reforms to the benefits and social security payments, including the removal of universal child benefit from higher-rate tax payers. The government had also stated that no government department would be immune from spending cuts, and justified public sector spending cuts by stating that the private sector had suffered losses due to the worldwide economic crisis and the public sector would not be immune.