Robert Peston

The Tory and Lib Dem negotiators are reaching the final stages of policy negotiations.

Any agreement on ministerial jobs will come later.

This is what I’ve learned would be some important elements in their joint economic and business policy:

1) The £6bn of additional spending cuts promised by the Tories will stand, unless the economy were to dramatically weaken. A well-placed source said to me that the £6bn wasn’t economically important enough to be a stumbling block for the Lib Dems.

2) The Tories will adopt the Lib Dem plan to increase the tax-free allowance on income tax to £10,000. A meaningful initial rise in the allowance would come quickly, with a clear timetable announced to get to the full £10,000.

3) We are not likely to see any meaningful increase in the inheritance tax threshold while the Lib Dems are part of the government. That Tory manifesto pledge would be kicked into the long grass.

To be clear, the ink is not yet even on the de facto contract between the two parties. And there are senior Tories and Lib Dems who fear that if a contract is eventually written, the coalition government may not last long, such is the mistrust between those at the top of the parties.

But my strong sense is that both sides are up for giving it a go – in the “national interest”, according to my sources, and not simply to taste the elixir of elected office.

This article is from the BBC News website. © British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.

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