They've argued their corners and come up with a series of proposals that supposedly gives us the best of both worlds. But will the Coalition leave you richer or poorer?
Our new Coalition government have spent the week ironing out the finer details of their arrangement and working out exactly whose policies trump whose. The result is their Final Coalition Agreement.
Now available to all, it builds on the policies set out in their First Coalition Agreement (see below for a reminder about what was included) and covers all the major plans they intend to action now they're in power. The finer details and exact figures will be made available on Tuesday 22nd June when Chancellor George Osborne announces the Emergency Budget.
While the makes for interesting, and undoubtedly worthy reading if you are so inclined; just in case you don't have the time, here's a summary of the key points that could affect your household finances:
What's New? : Policies from the Final Coalition Agreement
| Banking |
| Banking |
- A free national financial advice service will be created
- Unfair bank charges will be stopped
- Additional consumer protection measures will be introduced
- A Post Office Bank will be created
- A green investment bank will be created
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| Lending |
- Excessive interest rates on credit and store cards will be banned
- A 7 day cooling off period for store cards will be introduced
- Credit card companies will be forced to provide customers with clearer information that will enable them to judge whether they have the best deal
- More protection against aggressive bailiffs and unreasonable charging orders will be provided
- The courts will be asked to ensure that repossession is always used by lenders as a last resort
- Orders for the forced sale of a property to settle debts less than £25,000 will be banned
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| Tax |
| Council tax |
- Council tax on property in England will be frozen for 1 year with the intention of freezing it for a further year thereafter.
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| Tax credits |
- The tax credit system will be reformed to reduce fraud and overpayment
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| Tax on alcohol |
- The tax on alcohol will be reviewed with a view to cutting down on binge drinking without penalising those who drink responsibly
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| Non doms |
- A review will be held on the taxation of non-domiciled individuals.
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| Homeowners |
| HIPs |
- HIPs (Home Information Packs) have been suspended with immediate effect in England and Wales
- Energy performance certificates will still be required when you sell a property
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| Broadband |
- Superfast broadband will be rolled out across the UK in the near future
- The aim is to provide this service to those in remote areas at the same time as it becomes available to those living in towns and cities
- May be partially funded by the TV licencing fee
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| Affordable housing |
- Measures to bring empty homes into use will be developed
- Shared ownership schemes as a means of getting on the property ladder for both social tenants and others will be supported
- 'Home on the Farm' schemes will be used to encourage farmers to convert outbuildings into affordable housing
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| Stamp duty |
- A review will be held on the effectiveness of raising the stamp-duty threshold for first time buyers
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| Energy |
- Energy bills will need to provide information about how customers can move to the suppliers cheapest tariff
- Energy bills will need to illustrate how the amount of energy you use compares to that of similar households
- Energy efficiency home improvements paid for by reductions in energy bills will be encouraged
- Community-owned renewable energy schemes where residents benefit from the energy they generate will be supported
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| Pensions |
| Retirement |
- Benefits such as winter fuel allowance, free TV licences, free bus travel, free eye tests and free prescriptions will be maintained.
- The possibility of providing early access to pension funds will be investigated
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| Occupational pensions |
- Pension rules and regulations will be simplified to encourage investment in occupational pensions
- Auto-enrolment in company pensions will begin in 2012 as planned
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| Employment |
| Employees |
- Measures to end discrimination and encourage equal pay in the workplace will be introduced
- The right to request flexible working will be extended to all employees
- A pay review of the public sector will be conducted
- The National Minimum Wage will be maintained
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| Business start-ups |
- Starting up your own business will be made easier
- Social tenants will no longer be prevented from starting a business in their own home
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| Families |
| Nursery places |
- Free nursery care for pre-school children will be maintained
- Flexible parental leave will be introduced
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| Welfare |
| Jobseekers |
- Those receiving incapacity benefit will be reassessed and if capable of work will be moved on to Jobseekers' Allowance
- Introduce a 'Work for Yourself' scheme to enable those looking for work to set up their own business
- Develop local work clubs where jobseekers can get together to exchange skills and contacts
- The benefit system will be simplified with a view to encouraging people to work
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Here's a reminder of the policies that we found out about last week when the Coalition published their First Coalition Agreement:
| Tax |
| Income tax |
- The income tax personal allowance will be raised to help 'lower and middle income earners'.
- A 'substantial increase' in the income tax threshold will be announced in April 2011.
- The income tax threshold will be increased to £10,000 as a 'longer term policy objective'. This will be achieved through an annual increase in personal allowances.
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| National Insurance |
- Employee National Insurance contributions will increase by 1% in April 2011.
- There will be no increase in the National Insurance contributions for employers.
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| Inheritance tax |
- The Conservative's proposed increase in the inheritance tax threshold has been put on hold.
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| Married couples' tax |
- The Coalition have agreed to disagree on transferable tax allowances for married couples. The Conservaties will try and push through this change, however, the Lib Dems will not be required to support them.
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| Capital gains tax |
- Non-business capital gains will rise so that they are taxed at a similar level to income (potentially close to 20% for those taxed at basic rate, 40% for higher rate tax payers and 50% for additional rate tax payers).
- Entrepreneurial business related capital gains will be subject to generous exemptions'.
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| Child trust funds |
- Reductions will be made to Child Trust Fund contributions for children of higher earners.
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| Tax credits |
- Reductions will be made in the level of tax credits paid to higher earners.
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| Tax on flights |
- Air passenger duty will be replaced with a per-plane tax.
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| Homeowners |
| HIPs |
- HIPs (Home Information Packs) will no longer be required when you sell your property, though you will still need an energy performance certificate.
- Smart meters will be rolled out in homes across the UK.
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| Pensions |
| Retirement |
- Compulsory retirement at 65 will be phased out.
- A review will be held to establish when the state pension age will start to rise to 66; though it will not be before 2016 for men and 2020 for women.
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| State pension |
- The link between average earnings and the basic state pension will be restored from April 2011.
- The state pension will then rise annually by the higher of the increase in average earnings, prices or 2.5%.
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| Annities |
- The obligation to buy an annuity at 75 will be scrapped.
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| Equitable Life |
- 'Fair and transparent payments' will be made to Equitable Life policy holders through an independent payment scheme.
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| Employment |
| Jobseekers |
- A single welfare to work scheme will be introduced to help all unemployed people return to work.
- The payment of benefits to those who are out of work but are able will become conditional on 'willingness to work'.
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| Banking |
| Reform |
- The Coalition are planning an extensive reform of the banking system.
- They will introduce a banking levy, 'tackle' bankers' bonuses and take steps to increase competition within the banking sector.
- The Bank of England will assume responsibility for the stability of the financial system as a whole and oversee the regulation and stability of individual financial institutions.
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| Currency |
- The UK will not join the Euro as long as the Coalition retains power.
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