Andrew Grice: A month is a long time in politics

Four weeks in, the coalition is learning the art of compromise

The love affair between David Cameron and Nick Clegg is contagious. One month into the Liberal-Conservative coalition, ministers from the two parties are bonding in their respective departments, too. Liberal Democrats have to pinch themselves to make sure their red boxes, pampering by civil servants and ministerial cars (sometimes) are not a dream. Tory ministers, for the most part, are happy to have the Liberal Democrats on board, not least for the cover they provide for the central task of making deep and unpopular spending cuts.

The politicians are gradually getting used tocoalition politics. "Our system is built on looking for areas where you disagree," said a Liberal Democrat minister. "When you start looking for where you agree, you realise that you have a lot more in common than you thought."

Negotiations on two "coalition agreements", which provide the policy prospectus for the new Government, proved easier than both parties imagined. But more than 20 tricky issues have been farmed out to commissions, committees and working parties. If the coalition lasts, some of these reviews will boomerang as divisions between the two parties are exposed.

There have inevitably been differences behind the scenes in the past month but they seem to have been resolved amicably. Some civil servants mutter that the relationship between Mr Cameron and Mr Clegg is much more harmonious than the one between Tony Blair and Gordon Brown, the unhappy coalition which ran the country for 10 years.

The Prime Minister and his deputy are trying to bring a more grown-up approach to politics in which the Government can be more open about the inevitable disagreements within it. There is brave, over-optimistic talk about weaning our voracious media off the stories about splits and rows it devours. "We are not going to sit here like Gordon Brown throwing bricks at the television screen," quipped one Downing Street adviser. "We see this as a real opportunity to change the way politics is done for the better."

There have been teething troubles, as there would be for any new administration as it finds the agenda less under its own control than in opposition. Harold Macmillan's "events, dear boy, events" – the unexpected nasties that can blow any government off course – are even more likely when two parties share power. Discipline will be harder to enforce.

Mistakes have been made. The apparently different lines taken by William Hague, Liam Fox and Andrew Mitchell when they visited Afghanistan showed the need for some degree of command and control to prevent the show veering off the road. Yet there is a calm professionalism to the new regime, whatever the tensions beneath the surface. It was displayed during its first crisis – the early, regrettable but inevitable resignation of David Laws, the Treasury Chief Secretary. Mr Laws, ironically, had been one of the early stars of the Government, displaying a steely and sure-footed approach to spending cuts at two press conferences and a bravura performance at the dispatch box. He will be sorely missed when the detailed cuts emerge.

There are MPs in both parties who believe the happy coalition will collapse under the weight of its own contradictions; some secretly hope so. Yet the partnership may prove more resilient than the doubters think. The two party leaders have invested much in it and their determination to make it work should not be underestimated.

Critics keep their heads down, anxious to avoid blame if it ends in tears. Tory traditionalists, especially the eurosceptics, are uncomfortable with their new bedfellows. They suspect Mr Cameron is snuggling up to the Liberal Democrats so he can nudge his right-wingers out of bed completely. Some Liberal Democrats fret about their party losing its identity and being swallowed up by the Tories. In their hearts, some senior Liberal Democrats cannot get over the fact that Mr Clegg did not hop into bed with Labour, however difficult the parliamentary arithmetic. They fear many people who voted Liberal Democrat last month will not forgive or forget what he has done. Simon Hughes, the Liberal Democrats' new deputy leader, will be keeper of the party's conscience. He didn't rock the boat much yesterday after David Willetts, the Universities minister, raised the inevitable spectre of higher tuition fees. The coalition agreement allows Liberal Democrat MPs to abstain but the party pledged to phase out fees and many election candidates promised to vote against a rise.

The main trouble ahead will probably be over the spending cuts. The coalition is preparing the ground for the bad news on a daily basis and trying to pin the blame on Labour. This year's £6.2bn of cuts was the easy meat. The nasty medicine will be along soon: tax rises and very tight spending limits in the emergency Budget in 11 days, with the gruesome detail of the cuts announced this autumn after a spending review.

Despite the loss of Mr Laws, the honeymoon is not quite over yet. It will almost certainly end on Budget day. "Let us enjoy it," Eric Pickles, the Communities Secretary, said this week. "It is not always going to be like this."

HOME AFFAIRS

What have they done?

Immediate action to halt the previous government's identity card scheme – an easy hit as both the Tories and Lib Dems agree on this. A plan to ban identification of men accused of rape until conviction was announced in haste but ministers are now having second thoughts after a backlash. An annual limit or cap is to be imposed on immigration from outside the European Union in line with the Tories' election pledge.

What are they yet to do?

A commission (yes, another one) will look into the question of creating a British Bill of Rights, one of those tricky areas where the coalition parties appear to be facing in different directions. The Tories want to scrap the 1998 Human Rights Act, which incorporates the European Convention on Human Rights into UK law, but the Liberal Democrats have insisted that any change will "incorporate and build on" the convention. A difficult circle to square. Tory proposals to provide more prison places, impose longer jail sentences for people who carry knives and give more power to magistrates also appear to have been dispatched to the long grass.

Andrew Grice

ECONOMY

What have they done?

The Government swiftly imposed the bulk of the £6bn immediate cuts in public spending promised during the election campaign. Chief Secretary David Laws, below, resigned soon after following an expenses scandal. The Office for Budget Responsibility under Alan Budd, left, will announce the new growth forecast on Monday. Speeches by ministers have softened up the public for the "unavoidable" cuts, on which the public and unions will be consulted, in a programme modelled on a Canadian project in the 1990s. A "star chamber" of senior members of the Cabinet will sit in judgement on their ministerial colleagues. The Coalition has said that it will ring-fence front-line spending on the health service, armed forces and overseas aid and restore the earnings link with pensions.

What are they yet to do?

The heavy lifting on fixing the public finances starts with the emergency Budget on 22 June, perhaps the toughest since the Second World War. The full horror of the cuts to individual departments and spending programmes will be laid bare in the comprehensive spending review in the autumn. After that the reality of the £60bn in cuts in everything from your local bus and library services to Job Seekers allowance to GPs' pay will hit almost every family, just as the Government has warned it will. Even then, ministers will find it tough to push the cuts through against union resistance, public outcry and the possibility of a renewed banking crisis and "double dip" recession. Sacking 750,000 public sector workers will not be painless. Meanwhile Labour's tax rises will go ahead, except for the hike in employers' National Insurance. Most observers believe a rise in VAT to 20 per cent, pre-announced in the Budget for implementation next year a near certainty, by far the most significant change. Capital gains tax and corporation tax reform are also going to be tricky and controversial. One particular area to watch is the partial privatisation of the Royal Mail. Ed Davey, the minister charged with this, could raise a useful £9bn. Have they a stomach for fight with the militant post office unions?

Sean O'Grady

WELFARE

What have they done?

Iain Duncan Smith, the Work and Pensions Secretary, below, promised a review of the benefits system, and a Treasury document highlighted benefits, Gordon Brown's tax credits and public sector pensions as areas under the shadow of the axe. Basic state pension will be linked to earnings but the age at which it is paid will be raised.

What are they yet to do?

Social care has been kicked into the long grass through a commission to review it. The Tories favour a voluntary one-off £8,000 insurance payment so that people would not lose their homes to pay care home fees, while the Liberal Democrats are keen on a "partnership" scheme between individuals and the state. The review of benefits is still in its early stages and the coalition has not yet explained how it could make significant savings while honouring its pledge to protect the poorest and most vulnerable people.

Andrew Grice

EUROPE

What have they done?

Plenty of warm words to suggest the Government wants to play a constructive role in the European Union. In a speech in Madrid today, Nick Clegg will say it will be "a tireless supporter of a strong, prosperous eurozone, a strong prosperous EU" and it "realises that Britain's own success is, in so many ways, dependent on wider European success".

What are they yet to do?

Rows with EU partners – so far. But David Cameron could come under pressure at his first EU summit next week over a plan to give the European Commission advance knowledge of the Budgets of member states to prevent a re-run of the Greece crisis. The Government will want to avoid any changes being included in a new EU Treaty because it has promised a referendum on any new transfer of powers to Brussels. Rows between the two coalition partners – so far, even though they have very different instincts on Europe.

Andrew Grice

EDUCATION

What have they done?

Education Secretary Michael Gove, below, has been like the proverbial bat out of hell with legislation to allow more schools to become academies. Three quangos have been axed – the Qualifications and Curriculum Development Authority, the General Council for Teachers in England and Becta, which advised schools on new technology. State schools have also been allowed to teach the International GCSE (based on old O-level lines) and Labour reforms to the primary school curriculum and for new diplomas have been ditched.

What are they yet to do?

So far, there has been little evidence of Liberal Democrat influence. That will come with the announcement of their "pupil premium" – giving schools more money for taking in disadvantaged youngsters. But, will there be new money for it or will something else be scrapped to raise the funds. Some of Mr Gove's announcements leave unanswered questions. What will happen to the General Teaching Council for England's regulatory role in disciplining errant teachers?

But the biggest question is over the future for student fees. There are strong hints they will rise – but will the Lib Dems be happy to abstain as per the coalition agreement, or will some vote against? Also, will Labour support a rise as many of their candidates in the election signed a pledge not to vote in favour of it?

Richard Garner

HEALTH

What have they done?

Financial penalties announced for hospitals that discharge patients too early. In future they will be paid only once if patients have to be readmitted as emergencies within 30 days. Public inquiry into the scandal at Mid-Staffordshire NHS Trust where appalling standards may have contributed to as many as 400 excess deaths. The previous inquiry, under Labour, looked only at the trust and was in private. The new one will look at the regulators (and the coroner) and ask how they allowed the scandal to happen.

What are they yet to do?

Battle GPs to get them to resume responsibility for out-of-hours care. Cut administration costs by 30 per cent (an election pledge) – a review of health quangos is underway. Scrap NHS targets – Andrew Lansley, right, said this week he would "issue guidance shortly" on removing the four-hour limit on A&E waits, which doctors have criticised for distorting clinical priorities. Others are due to follow, to be replaced with "outcome measures," but there is unlikely to be a bonfire of targets. The promised £200m cancer fund, to pay for drugs recommended by a patient's doctor but not approved by Nice, will start in April 2011. By far the toughest task will be honouring the pledge to protect the NHS from the economic whirlwind, by increasing its funding in real terms every year for the duration of Parliament.

Jeremy Laurance

POLITICAL REFORM

What have they done?

The coalition has confronted the thorny issue of the House of Lords reform (which was frankly the easy bit). A cross-party committee is due to produce proposals for a mainly elected second chamber by the end of the year. Fixed-term parliaments, which means the next election will be on 7 May, 2015.

What are they yet to do?

Timing of referendum on whether to bring in the alternative vote (in which people can rank candidates in order of preference) for general elections is unclear. Liberal Democrats favour next May but the Tories want to wait; some fear the coalition will falter if there is a "no" vote (for which the Tories will campaign). Trouble ahead over the controversial proposal to make it harder for MPs to force a general election through a vote of confidence. The coalition has proposed a 55 per cent threshold rather than the current simple majority, but may have to back down amid a rebellion by Conservative MPs.

Andrew Grice

DEFENCE

What have they done?

A Strategic Defence Review has been given the go-ahead, as well as the creation of a National Security Council, to co-ordinate the efforts of departments and agencies to safeguard British security. On his first day in Downing Street, David Cameron called a meeting focusing on the conflict in Afghanistan.

Yesterday, during his first trip to the country as Prime Minister, he announced £67m in additional funding to counter the threat of Taliban roadside bombs to British troops fighting there.

What are they yet to do?

There have been confusing and contradictory messages on Afghanistan. There seems to be no joined-up policy on the biggest foreign policy and defence challenge faced by the country. Liam Fox, above left, said he wanted a quick exit for British troops declaring that the UK was not there to build infrastructure, just when his Cabinet colleagues William Hague, the Foreign Secretary, above right, and Andrew Mitchell, the Development Secretary, were saying the opposite, while Nick Clegg and the Lib Dems want to cut and run from the war. Another challenge comes on the issue of Trident, which the Lib Dems promised to scrap and the Tories to keep.

Kim Sengupta

ENVIRONMENT

What have they done?

So far, the Coalition's biggest decision concerning the environment has been to cancel plans for a third runway at Heathrow, and to block new runways at Gatwick and Stansted. They have also said they will honour the previous Labour government's promise, made at the Copenhagen summit, to contribute £300m towards the protection of rainforests. Chris Huhne, the Energy Secretary, has also used bold language on increasing renewable energy sources. And they have promised to set up a "green" investment bank to promote green technology.

What are they yet to do?

The Government has shunned the example set by the US and Norway in imposing a moratorium on off-shore oil drilling after the Gulf of Mexico disaster, and may continue to offer lucrative tax breaks for the oil companies exploring the sea off the Shetlands. The Transport Secretary Philip Hammond, has promised to "end the war on motorists", although he has not said what this means but it does not sound good for the environment. There is also no detail on whether the money will be there for the investment that would be needed to turn Chris Huhne's words to solid results. Nor do we know what assets the green investment bank will have. In opposition, both David Cameron and Nick Clegg called for stricter standards for coal-fired power stations. There is a £3bn plan for a power station at Hunterston, in Scotland, which will test whether their actions match their words.

Andy McSmith