New Government Update
Posted on 12 May 2010
The last 24 hours have seen significant developments in the formation of a new government, which include:Labour's attempts to form a coalition with the Liberal Democrats failed and Gordon Brown resigned as Prime Minister yesterday. David Cameron accepted the Queen's invitation to become the new Prime Minister and to form a government, and Nick Clegg will be the Deputy Prime Minister.
A formal Conservative - Liberal Democrat coalition has been announced which will command a majority in the House of Commons, totaling 363 seats. This coalition was the strongest parliamentary option available and is an outcome that likely to please the markets in the first instance, though they will be keen to see whether the Tories are prepared and able to put in place the economic austerity measures they have promised in recent months.
A number of senior Cabinet positions have been distributed between the two parties, including five to the Liberal Democrats. Positions announced so far are:
- George Osborne (Con) - Chancellor of the Exchequer
- William Hague (Con) - Foreign Secretary
- Vince Cable (Lib Dem) - Minister with responsibility for Business and Banking
- Andrew Lansley (Con) - Health Secretary
- Dr Liam Fox (Con) - Defence Secretary
- Philip Hammond (Con) - Work and Pensions Secretary
- Danny Alexander (Lib Dem) - Scotland Secretary
- Sarah Teather (Lib Dem) - Women and Equalities (with Government Equalities Office to move to the Department for Communities and Local Government)
Other positions are expected to be announced today including Liberal Democrat David Laws as Schools Secretary and Conservative Michael Gove as Home Secretary.
Chris Huhne (Lib Dem) - There is widespread speculation that he will take a senior role within the Energy and Climate Change Department, although this is yet to be formally confirmed
In terms of some important policy commitments of the new government, there will be a referendum on the alternative vote system; the Tories £6bn of cuts this year will go ahead; personal tax allowances are to increase for low and middle-income workers; Parliaments are to be fixed for five years; the ID card programme scrapped as part of a "great repeal" of unwanted Labour policy; and there will be opt-outs on issues on which Liberal Democrat MPs can abstain from voting, which will include university tuition fees.
ActSmart is looking forward to our future engagement with what is currently the department for Business, Innovation and Skills (BIS, previously BERR and before that DTI) but could well be re-named again, to incorporate its specific 'banking' remit, under the guidance of Vince Cable, post Peter Mandelson's departure.
We will continue to keep you updated on developments in relation to the new government and their potential impact upon business.
