CONSERVATIVE LEADER David Cameron, who became Britain’s youngest prime minister in 200 years last night, has made major concessions to the Liberal Democrats to secure a five-year coalition deal.
The Liberal Democrat Party formally ratified the coalition deal with the Conservatives early today.
Just minutes after he became prime minister, Mr Cameron (43) warned that “difficult decisions” lay ahead. “This is going to be hard and difficult work,” he said.
Mr. Clegg said early today that he hoped this was "The start of the new politics I have always believed in".
Despite some rumours to the contrary, Mr Cameron is to appoint his close friend, George Osborne, as chancellor of the exchequer, while the Lib Dem leader Nick Clegg is to become deputy prime minister.
Lib Dem treasury spokesman Vince Cable will be his deputy as chief secretary to the treasury, second in line to Mr Osborne.
Former Tory leader William Hague will, as expected, become foreign secretary, while his party colleague, Andrew Lansley, will take over as health secretary – while the Liberals will have junior ministers in other departments.
Mr Cameron has conceded a referendum on limited electoral reform and abandoned plans both to cut inheritance tax and to offer tax benefits to married couples, while he has agreed that tax reforms should first seek to remove those earning less than £10,000 a year from the tax net, as the Lib Dems had wanted.
The Liberal Democrats have accepted that billions of pounds of spending cuts must happen this year, and put aside their desire to reduce the power of the UK’s nuclear deterrent, and demands for an amnesty for illegal immigrants.
Sources indicated that detailed policy had only been hammered out on "the most difficult areas" with more work required in the coming "week or two". But they said the coalition deal represented "a really significant realignment of British politics".
The UK would have a "government with a majority of over 70, secure for five years, committed to dealing with the deficit right upfront and central," the source said.
The new power-sharing administration will scrap Labour's planned rise in national insurance, but some benefits will go to reducing income tax thresholds for lower earners.
The Lib Dems, who will be given five seats at the new cabinet table, will also be allowed to take alternative positions on key issues.
Speaking outside 10 Downing Street, an emotional Mr Brown, accompanied by his wife Sarah and children, offered his best wishes to the Conservative leader as prime minister, saying it was a job “with great capacity for good”.
Accepting the blame for Labour’s election result, Mr Brown later told party staff that “the fault is mine and I will carry it alone”, adding that he had resigned as party leader and would be replaced temporarily by the party’s deputy leader, Harriet Harman.
Paying a warm tribute to one of the other architects of new Labour, Peter Mandelson, Mr Brown said: “Peter has been the rock on which the future and stability of Labour has been based for so many years.”
His successor is to be chosen by July, the party’s national executive decided yesterday, though Ms Harman has already indicated that she will not stand for the leadership and wants to remain where she is.
However, the Miliband brothers, David and Ed, along with fellow Cabinet minister, Mr Ed Balls – who has strong union support – are expected to do so, though formal declarations will not happen until today.
The prospect of a Conservative/Liberal alliance grew sharply yesterday afternoon once it emerged that a morning session between Labour and Liberal Democrat negotiators had not gone well.
Relations between the two descended sharply last night, after senior Labour figures briefed privately that the Liberals had demanded billions worth of spending cuts immediately.
Lib Dems insist the talks came to naught when many on the Labour team backtracked on the offer of electoral reform made late on Monday by Mr Brown in a final attempt to keep his party in power, if not himself.
Even though Labour had offered concessions on Monday, it was clear after a meeting of Lib Dem MPs finished in Westminster at 1am yesterday that most were minded to go in with the Tories.