By Tim Castle
LONDON (Reuters) - The leaders of Britain's fractious coalition pledged on Monday to cap the cost of long-term care for the elderly and to improve state pensions in an effort to re-engage with electors midway into their five-year government.
Conservative Prime Minister David Cameron and his Liberal Democrat deputy, Nick Clegg, have seen popular support fall away as voters suffer squeezed incomes and the economy fails to stage a stable recovery from the 2008/2009 financial crisis.
Despite trailing behind the opposition Labour party in polls, the two leaders said their alliance remained "steadfast and united" on its key aim of cutting Britain's deficit and restoring the economy to health.
In a joint statement to mark the halfway point of Britain's first coalition government since World War Two, Cameron and Clegg set out a series of domestic policy initiatives designed to quash talk that the partnership had run out of steam.
"Our mission is clear: to get Britain living within its means and earning its way in the world once again," they wrote in a review of the government's actions since it came to power in May 2010.
Without giving details, they promised to limit the amount the elderly pay for long-term healthcare, to reform state pensions, build more houses, help parents with childcare costs and find ways to boost investment in transport infrastructure.
Labour dismissed the mid-term review as "another relaunch" of the coalition, seen by many at its birth as an unstable marriage between the center-right Conservatives and the smaller center-left Liberal Democrat party.
In spite of sharp differences over issues such as political reform and Britain's relationship with the European Union, the alliance has held together, bound by a joint commitment to an austerity programme that has kept interest rates low.
Political reality has also proved an effective bond, with Clegg's party at risk of a wipeout if they force an early election, after losing the backing of left-leaning voters angry at a partnership that returned the Conservatives to government.
Later on Monday the two leaders will address media at Cameron's Downing Street residence in London, in what is likely to be a somber echo of their relaxed joint appearance in the garden of the same building after sealing the coalition deal.
They will be speaking a day before a parliamentary vote to approve a real-terms cut in unemployment and tax-credit benefits, condemned by Labour, which the coalition believes will enjoy popular support at a time of low or frozen pay rises.
At the weekend, Cameron said he wanted to be re-elected in 2015 and serve another five-year term as prime minister, a move seen as dismissing suggestions that he was tiring of his role, and putting a lid on the ambitions of potential rivals.
(Editing by Louise Ireland)