Latest update: 25/05/2010
Queen unveils government's deficit-reducing plans
Queen Elizabeth II formally opened Britain's parliament Tuesday and outlined the government's ambitious legislative programme. The new agenda focuses on tackling the country's deficit while ushering in political and educational reform.
REUTERS - Britain's Conservative-Liberal Democrat coalition set out its plans for government on Tuesday, making reduction of a record budget deficit and boosting economic growth its top priorities.
The coalition ushered in a new era after 13 years of Labour rule with plans to give parliaments fixed, five-year terms and to hold a referendum on changes to the voting system.
In a speech delivered on its behalf by Queen Elizabeth at the formal state opening of parliament, the government also proposed legislation to give British people a say on any transfer of powers to the European Union.
Forming the first coalition since 1945, the centre-right Conservatives and left-leaning Lib Dems took office after an election on May 6, swiftly smoothing over differences of approach on issues such as when to start cutting a deficit running at over 11 percent of national output.
The government programme echoed a detailed coalition agreement published last week. The Treasury has already set out plans on Monday to trim an initial 6.2 billion pounds from the deficit.
Further cuts are expected to follow in an emergency budget to be presented in four weeks. "The first priority is to reduce the deficit and restore economic growth," the Queen said in her speech.
"Action will be taken to accelerate the reduction of the structural budget deficit. A new Office for Budget Responsibility will provide confidence in the management of the public finances."
The office will be led by economist Alan Budd and will take on the task of forecasting economic growth and borrowing needs.
Figures published earlier on Tuesday showed Britain's economy grew by 0.3 percent in the first quarter of the year in a modest recovery from an 18-month recession.
Another bill will make changes to an increase in National Insurance payroll tax which the Labour government had planned for next year and which the Conservatives said would be a "tax on jobs".
The government said its bill would raise nine billion pounds which finance an increase in income tax allowances and a higher threshold for National Insurance contributions.
The coalition, led by Conservative Prime Minister David Cameron and his Lib Dem deputy Nick Clegg, is enjoying a political honeymoon, with media largely supportive and markets calmed by first steps on the deficit.
An ICM poll published in the Guardian's Tuesday edition found nearly two-thirds of voters approved of the coalition.
However, some lawmakers from both of the parties are uneasy about the compromises involved in coalition and traders will be looking for more details next month of cuts to come.