An astonishing victory for the Liberal Democrats

Well, I am impressed.  The Lib Dems have obtained everything and more that I predicted yesterday.  I couldn’t be happier.  I’m astounded that the Lib Dems have achieved so much or that the Conservatives were prepared to concede so much.  Congratulations are due to both Cameron and Clegg.  This is a sensible, grown-up result.  Full details of the coalition agreement are yet to be released (they will at 2pm London time), but it looks like:

The Cabinet

  • Lib Dems to have five (!) seats in the cabinet, including deputy PM for Clegg.

Electoral Reform

  • Fixed term (five year) parliament, with the next election to be held on the first Thursday of May, 2015 [Lib Dems].
  • Adjustments to electoral boundaries to equalise the constituency sizes [Tories].
  • A referendum on Alternative Vote — a.k.a. Preferential Voting — for the House of Commons [Lib Dems].
  • Proportional Representation for the House of Lords! [Lib Dems]

Fiscal Policy

  • An emergency budget within 50 days [Tories].
  • A reduction in spending of six billion pounds for the 2010/2011 year [Tories].
  • A gradual raising of the tax-free threshold to £10,000 [Lib Dems].
  • Capital Gains Tax increased to match income tax, [Lib Dems] with lower rates for entrepeneurial business investments [Tories].
  • Inheritance tax to remain unchanged [Lib Dems].
  • The rise in employers’ National Insurance will be scrapped [Tories].
  • The rise in employees’ National Insurance will remain to partially fund the increase in the tax-free threshold [Lib Dems].
  • Tax cut for married couples will go ahead [Tories].

Europe

  • No adoption of the Euro [Tories].
  • Referendum on any future treaties that would cede any power to Brussels [Tories].

Immigration

  • A limit on non-EU immigrants to the UK [Tories].

Security

  • Trident gets replaced [Tories].

Financial Regulation

  • Macroprudential regulation to be at the Bank of England [Tories].
  • Microprudential regulation to be decided later (i.e. the FSA may not be dismantled) [Lib Dems].
  • An independent commission to consider breaking up the biggest banks [Lib Dems].

Energy

  • No agreement on nuclear power, but a Lib Dem will be secretary of state for the environment [Lib Dems].

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