Coalition looks to open new chapter

David Cameron and Nick Clegg are to "press the reset button" on the coalition this week, in an attempt to draw a line under almost two months of terrible headlines and worse election results.

The Prime Minister and his deputy will hold a joint press conference on the eve of their second Queen's Speech, restating that economic recovery remains the joint ambition of both Tories and Liberal Democrats.

However, both parties have attempted to play down the idea that the event on Tuesday will be a repeat of the bonhomie seen in the Downing Street rose garden two years ago when the coalition was formed.

"It will be more gritty," said a Lib Dem source. "It is not going to be another love-in or a renewing of the coalition vows." A senior Tory source added: "It is definitely no rose garden Mk II. They will be putting front and centre that the number-one policy is deficit reduction."

The two leaders will use the event to attack Labour's economic record, claiming their solution to the debt crisis is more borrowing. But a Labour Party spokesman said: "They can have as many rose gardens as they like. The problem is they have made a catastrophic error on the economy."

Some MPs are suggesting that Mr Cameron and Mr Clegg draw up a new coalition agreement to give the Government a "renewed sense of purpose". But others have warned that any attempt to recreate the closeness of the coalition honeymoon will "go down like a lead balloon".

Instead, the Queen's Speech on Wednesday will focus on delivering the coalition agreement, with an emphasis on crime, children and energy. Despite howls of protest from Tory MPs, Mr Clegg will bring forward a House of Lords reform bill, promising to hold the first elections to the Upper House in 2015. However, up to 120 Tory MPs are understood to be willing to vote down the bill at the earliest opportunity.

A crime and courts bill will be a centrepiece of the new legislative programme, with both sides of the coalition laying claim to different aspects as proof of their influence. Tories will be cheered by the plan to create a "National Crime Agency", bringing together existing agencies such as the Serious Organised Crime Agency and the Child Exploitation and Online Protection Centre into what is being dubbed a British FBI. Theresa May, the Home Secretary, hopes a single agency charged with tackling organised crime, policing the country's borders and protecting children will draw a line under a run of bad headlines, from the bungled detention of the radical cleric Abu Qatada to long immigration queues at Heathrow.

The measure will also pave the way for cameras to be allowed in courts in England and Wales, and for an overhaul of community sentences, a policy championed by Lib Dems and Kenneth Clarke, the Justice Secretary. More criminals will come face to face with their victims through "Neighbourhood Resolution Panels", while offenders given non-custodial sentences could be tagged with GPS trackers to reduce reoffending rates.

Other measures expected to be in the Queen's Speech include:

* A children and families bill which will promise to speed up the adoption system, propose shared parental leave for new mothers and fathers, boost the powers of the Children's Commissioner, and make it easier to request flexible working.

* An enterprise bill that will seek to cut red tape for employers, but will stop short of the "quick fire" policy desired by some Tories to make it easier to sack underperforming staff.

* A powerful new watchdog, the Grocery Code Adjudicator, that will aim to stop supermarkets exploiting farmers and suppliers.

* A co-operatives bill is expected to make it easier to set up and run employee-owned businesses.

* An electricity market reform bill will guarantee income for low-carbon energy suppliers, to encourage investment in new generators, but risks claims of a back-door subsidy for new nuclear power stations.

However, a promise in the coalition agreement to enshrine in law the commitment to spend 0.7 per cent of gross national income on overseas aid from 2013 looks set to be broken. A source said: "The Government is making good progress on this anyway. Enshrining it in law is a good thing but we can do it in the fullness of time."

Ministers are also expected to promise to legalise gay marriage, take action against dangerous dogs, criminalise forced marriage, criminalise drug-driving, introduce a minimum alcohol price and reform Civil Service pensions.