UK's changed political landscape

The coalition deal between the Conservatives and Liberal Democrats in the UK will change British politics forever and is indeed a historic achievement. In view of the electoral result, it was inevitable that these two parties would join forces to give Britain a stable government with a comfortable parliamentary majority.

Although a coalition between Labour and the Liberal Democrats, supported in Parliament by the Scottish and Welsh nationalists as well as Northern Ireland's SDLP was mathematically possible, this scenario was never really feasible.

Such an alliance would have had a majority of only two seats, it would have been held to ransom by Scottish and Welsh nationalists demanding their countries be protected from budget cuts, and it would have ignored the fact that Labour lost the election.

So Nick Clegg was right to join David Cameron in government, and this coalition offers Britain political stability and the best hope of tackling the deficit and overcoming enormous economic challenges. Gordon Brown stepped down as Prime Minister with dignity, and Labour now needs to rejuvenate itself in opposition.

Of course, many analysts and commentators are asking how long this coalition government will last, considering there were clear differences between the two parties during the election. It very much looks like both parties genuinely want to make a success of the coalition; both sides have made concessions and the deal is intended to last for a full Parliament.

Under the coalition agreement, the Liberal Democrats have been given five Cabinet seats, including the post of Deputy Prime Minister for Clegg, while the Conservatives were allocated 18 posts, including, of course, Cameron as Prime Minister. Both parties have compromised on policy, something which is normal in many European countries when coalitions are formed, but most of the sensible policies of both parties have been kept.

The coalition agreement is strong on civil liberties, which was a key Liberal Democrat policy, while the Conservatives' educational reform proposals remain in place. Britain is to keep its Trident nuclear deterrent, although its cost will be scrutinised, and the Liberal Democrats will be allowed to continue making the case for an alternative nuclear deterrent.

The UK will continue to use nuclear power for its civil energy requirements, immigration from outside the EU will be capped, and crucially, £6 billion in budget cuts will take place this year, which were all Tory campaign promises.

In major concessions to the Liberal Democrats, the Conservatives agreed to a referendum on electoral reform, scrapped plans to cut inheritance tax and abandoned their pledge to repatriate powers from Brussels. This latter concession is a very important one.

Many feared that a Conservative government would adopt a confrontational approach towards the EU - most Conservative MPs are, after all, eurosceptic - but thanks to the participation of the Liberal Democrats in the coalition, Cameron has stepped back from the party's eurosceptic line.

In a move I am sure will be welcomed by all EU governments, the Conservative-Liberal Democrat policy statement says the new British government will be "a positive participant in the EU, playing a strong and positive role with our partners".

Such a declaration is far more positive about the EU than what was stated in the Conservative manifesto, namely that the UK would be "active and energetic in the EU, promoting Britain's interests and engaging in the shared challenges all European countries face".

Furthermore, the coalition has agreed not to opt out of the EU's Charter of Fundamental Human Rights, which guarantees workers' rights, and not to repatriate powers ceded to the EU on social legislation.

The Liberal Democrats, on the other hand, have made a modest concession on the single currency, and the coalition agreement states that Britain "will not join or prepare to join the euro in this Parliament".

The biggest challenge for the coalition, of course, is tackling the country's huge deficit, which stands at 11 per cent of GDP. Although during the campaign the Liberal Democrats had opposed Tory plans to cut £6 billion this year, they have now agreed to this, although the new government has said these cuts will not affect frontline public services.

Labour will obviously be holding the coalition to its word on this latter point, and it remains to be seen whether the fragile economic recovery can withstand such cuts.

So there you have it. New Labour is out and New Politics is in. Britain should be in for some very interesting times.