Coalition Govt mid-term review roundup

David Cameron Speaking 480

The much anticipated coalition Government mid-term review has failed to shed any fresh light on plans for the second half of the parliament.

The Government reiterated its plans to reform the state pension system, reform long-term care funding and ringfence UK banks’ retail arms, but failed to give any fresh details.

The review was unveiled by prime minister David Cameron and deputy prime minister Nick Clegg at a press conference in London this afternoon.

The paper outlined the Government’s policy priorities until the next general election in 2015. Both party leaders gave firm commitments to provide a stable Government, calling the Government “steadfast and united”.

The mid-term review is divided into four key policy areas of the economy, public services, welfare and society, and foreign policy.

On state pension reform, a white paper detailing plans to introduce a flat-rate, single-tier state pension worth £140 a week for future retirees was due to be published in Spring 2012.

In July, pensions minister Steve Webb issued a statement saying the paper had been delayed until the Autumn. The document has still not been published.

The review commits to putting in place a mechanism to ensure the state pension age reflects future changes in life expectancy.

It also says policymakers are “working towards a better, simple, single basic state pension” but there is no new detail on how or when the reform will be delivered.

A banking reform bill is due to be published later this month and the Government promises to make amendments to accommodate the recommendations of the Parliamentary Commission on Banking Standards.

The PCBS published its interim report last month when it called on Government to “electrify” the ringfence. It will report back in the next few months on the culture and standards of UK banking.

The midterm review highlights the Government’s proposals to impose tougher criminal sanctions and associated penalties for financial crimes.

It also contains a commitment that the UK will continue to fight to protect the competitiveness of the financial services industry from EU regulation. It promises to push for a “non-discrimination clause” in the banking union to protect EU nations not in the euro.

There was no mention of long-term care funding in the report but both Cameron and Clegg committed to implementing a cap on care fees as outlined by the Dilnot Commission.

There were reports over the weekend that the cap will be £75,000, more than double the level recommended by Andrew Dilnot in his report.

Partnership director of corporate affairs Jim Boyd says the Government may have merely been “flying a kite” by suggesting a £75,000 limit to costs.

He says “There is a risk that people who are considering how to fund their care are lulled into a false sense of security that the Government will deliver something in the short term and fail to plan how to fund their care.”

The Conservative policy of transferable tax allowances for married couples has been resurrected with plans to allow Liberal Democrat MPs to abstain from any vote as outlined in the 2010 coalition agreement.

On housebuilding, there is a commitment to “support and extend” the FirstBuy mortgage scheme and the Government says it will continue to “champion” NewBuy.