Coalition 2.0: David Cameron and Nick Clegg use rail upgrade to put Government back on track

Show of unity after days of speculation – but plans for new policies scaled back after bruising Lords battle

David Cameron and Nick Clegg tried to breathe new life into the Coalition yesterday by insisting that it would last until 2015 and announcing that it would issue a report mapping its progress and unfinished business.

The Prime Minister and his deputy defied sceptics in their respective parties who have predicted in recent days that the Coalition will break up well before the planned 2015 election. At a joint press conference in Birmingham, they emphasised their "shared agenda" in an attempt to move on from their bruising battle over House of Lords reform last week.

A progress report, expected in September, will highlight how many of the 430 pledges in the Coalition Agreement signed in 2010 have been met, and how the remaining ones will be kept. However, plans for a new agreement with a raft of fresh policies for the second half of this parliament, dubbed "Coalition 2.0", have been scaled back in a recognition of both parties' desire to go their own way before the next election.

The "mid-term review" is likely to show that about 120 promises have been kept, about 200 are in progress, and the rest are either broken or hard to quantify.

The Conservative and Liberal Democrat leaders, who clashed in private over Lords reform last week, put on a show of public unity yesterday as they tried to reassure the financial markets and voters that their project has not run out of steam. Indeed, Mr Cameron argued that the deeper-than-expected economic gloom made their partnership even more valid and said he was "even more committed".

Insisting the Coalition still had "real purpose, a real mission," Mr Cameron added: "We get on better than most of the people who were at the top of the last few governments we can both remember, so I don't accept the warring couple analogy."

Mr Clegg played down the Lords row as one of the "bumps in the road" to be expected on an issue which excited strong opinions. He added: "I'd put a considerable amount of money on us seeing it through to 2015 because that is what we are committed to doing and that is what we will do."

The two leaders confirmed that the Government would spend an extra £4.2bn on what is being billed as the biggest modernisation of Britain's railway network since the Victorian era. But work will not start until 2014 and ministers hope for a more immediate boost to the economy from infrastructure projects to be announced by George Osborne, the Chancellor, later this week.

The rail plans include a high-capacity "electric spine" running from Yorkshire and the West Midlands to south coast ports. An £800m electrification and upgrade from Sheffield to Bedford will complete the electrification of the Midland Main Line running from London St Pancras and of the lines from Nuneaton and Bedford to Oxford, Reading, Basingstoke and Southampton.

When existing schemes are taken into account, a total of £9.4bn will be invested in railways between 2014 and 2019. But campaign groups expressed fears that the promised investment would mean further big increases to season ticket prices.

Despite the two leaders' assurances on the Coalition there was some scepticism within both parties. Lord Steel, the former Liberal leader, predicted that they might go their separate ways six months before the May 2015 election. Stewart Jackson, a Tory MP, said the Coalition would be "dead" if the Lib Dems took revenge for the collapse of Lords reform by blocking new constituency boundaries that could hand the Tories up to 20 extra seats.

In a public display of unity the PM insisted the Coalition still had 'real purpose, a real mission'

Rail upgrade: the areas that will benefit

Great Western rail line electrification from Cardiff to Swansea

The Great Western rail line will be electrified between London and Swansea at a cost of £600m. Newer, longer trains will run on the line. Commuter lines in the south Wales valleys will also be electrified, including in Ebbw Vale, Maesteg and the Vale of Glamorgan. Two-thirds of the Welsh population will have access to the new electric trains.

'Electric spine' from Yorkshire to Bedford

An 'electric spine' will run from Yorkshire and the West Midlands to the south coast ports. The £800m upgrade will run from Sheffield to Bedford, passing through Nottingham, Derby and Leicester, completing the full electrification of the Midland Main Line out of London St Pancras. The lines from Nuneaton and Bedford to Oxford, Reading, Basingstoke and Southampton will also be electrified.

Direct link between Heathrow and the West Country & Wales

A new £500m direct link will connect the Great Western Main Line to Heathrow airport. The new track will run from Slough to Heathrow. From 2021, passengers from the West Country, the Thames Valley and Wales will no longer have to travel via Paddington.

'Northern Hub' rail upgrades in Manchester and Liverpool

The 'Northern Hub' will be completed. A £322m cluster of rail upgrades around Manchester city centre, Manchester Airport and across to Liverpool would see up to 700 more trains running between towns and cities in the North. The plans include new lines between Sheffield and Manchester and electrification of the line between Liverpool and Manchester.

Longer platforms at Waterloo

Platforms at London's Waterloo station, the UK's busiest train terminal, will be lengthened at a cost of £350m.

Improvements to East Coast Mainline

The East Coast Main Line from North-east England down through Yorkshire, Lincolnshire and Cambridgeshire to London will see improvements worth £240m.

Poppy McPherson