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Page last updated at 11:10 GMT, Wednesday, 12 May 2010 12:10 UK

Q&A: Tory-Lib Dem alliance

The Conservative Party is to form a coalition government with the Liberal Democrats following Gordon Brown's resignation as Britain's prime minister.

What's happening?

The Conservatives have agreed to form a coalition government with the Liberal Democrats. It is the first time Britain has had a coalition government in 70 years - and the first time these two parties have ever agreed to a power sharing deal at a national level in the UK. Conservative leader David Cameron will lead the new government but there will be senior cabinet post for Liberal Democrat MPs, with their leader Nick Clegg as deputy prime minister.

Why didn't the Tories form a government after the election?

They didn't get a clear win. Normally the party with more MPs than all the others put together forms a government, but the Conservatives fell just short of that. They have 306 MPs - they needed 326 for a majority. When no-one has a majority of MPs it is called a hung Parliament. . It means that to have a government the Conservatives needed to form a coalition, or at least reach an understanding with the Lib Dems and/or other parties, to get legislation through.

What sort of deal have the Conservatives and Lib Dems done?

David Cameron made it clear in his speech on the steps of Number 10 that it would be a full coalition, as opposed to more basic deal to sustain the Conservatives in power but no more. The Lib Dems are to get five seats in Cabinet and a reported 20 ministerial jobs. Vince Cable will have responsibility for business and banks, Danny Alexander is expected to be scottish secretary and Chris Huhne to be energy and climate change secretary. David Laws is also expected to get a high-profile job. The arrangement is intended to last for five years as the two parties have agreed the next election should be held in 2015.

What will be their key priorities?

They have said their top priority is the economy and cutting Britain's record budget deficit. Education is seen as crucial too. Both parties want similar-sounding pupils' premiums and further schools reforms. Cleaning up politics is also near the top of the agenda and there are a range of measures from fixed term Parliaments, banning non-dom peers, curbs on lobbyists and recalling MPs that both parties agree on. It is also reported they have agreed on reforms to the House of Lords. Finally, and most importantly for the Lib Dems, electoral reform. There will be a referendum on scrapping Britain's first-past-the-post voting system in favour of the Alternative Vote method before the next general election, under Tory proposals - even though the Conservatives are likely to campaign for against any voting change.

How will it work?

It is impossible to say precisely, as we are in uncharted waters. Ministers from both parties will be bound by collective responsibility - meaning they must agree to support all Cabinet decisions - when it comes to key issues such as the economy, tax, defence, immigration, foreign policy and Europe. However, it has been agreed that the Lib Dem MPs will be permitted to abstain in a vote in the House of Commons on certain issues where they disagree with the Conservatives. One definite area of disagreement is on the Conservatives' plans for a tax break for married couples. Other such areas could be nuclear power and university tuition fees. Should the Lib Dem end up voting against the coalition on a central issue, that could bring an end to the deal.

What policy compromises have they agreed?

A document will be published saying which of the main policies from the two party manifestos, will be the government's main priorities. It has involved a series of compromises on both sides and manifesto pledges dropped.

The Lib Dems have agreed to back the Tories plan for £6bn in public spending cuts this year and support the scrapping of part of next year's 1% National Insurance tax rise. They have agreed to drop plans for a "mansion tax" on properties costing more than £2m and will support a cap on non-EU immigration. They have dropped their opposition to renewal of the Trident nuclear deterrent although the cost of the project will be carefully scrutinised. They have also agreed that no further powers should be ceded to the EU without a referendum and the UK should not join the euro.

In return, the Tories have agreed to scrap plans to raise inheritance tax thresholds to £1m and to spend more money to cut class sizes for disadvantaged pupils. They are also backing Lib Dem plans to raise the point at which people start paying tax to £10,000, although this will be phased in. The Tories have agreed to a referendum on the voting system and the introduction of fixed-term Parliaments, which they previously opposed.

What will the two parties make of the deal?

Both men have tried to take their parties with them during the negotiations, giving them regular updates and taking soundings, but there is still likely to be much anger among backbench MPs and grassroots activists on both sides who are more used to battling against each other in local and general elections than being on the same side.

What happens to Gordon Brown and Labour?

Gordon Brown has formally tendered his resignation as prime minster to The Queen. He has also stood down as leader of the Labour Party with immediate effect, handing over the reins to acting leader Harriet Harman. There will now be a battle to succeed Mr Brown at the head of the Labour Party, with a new leader likely to be in place by the middle of July. Labour Party MPs will sit on the opposition benches in the House of Commons for the first time in 13 years.

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