May 25, 2010 / 4:24 PM / 10 years ago

UK government plans political reform

LONDON (Reuters) - Britain’s new coalition government set out plans on Tuesday to reform the electoral system and cut state interference in people’s lives, while tackling a record budget deficit.

A video grab image shows Britain's Prime Minister, David Cameron, speaking after the Queen's Speech during the State Opening of Parliament, in the House of Commons in central London May 25, 2010. REUTERS/Parbul TV via Reuters TV FOR EDITORIAL USE ONLY. NOT FOR SALE FOR MARKETING OR ADVERTISING CAMPAIGNS

The Conservative-Liberal Democrat alliance, Britain’s first coalition for 65 years, also plans to allow private investment in state-owned distribution business Royal Mail, setting the scene for an early clash with trade unions who sharply criticized the new government’s program.

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 further transfer of powers to the European Union.

Analysts said the program of 22 bills, to go before parliament between now and late next year, was an ambitious start to a new era after Labour lost power for the first time since 1997.

The formalities over, Conservative Prime Minister David Cameron attacked Labour’s record, saying the party’s policies had resulted in “an economy that is nearly bankrupt, a society that is broken and a political system that is bust.”

The center-right Conservatives and smaller, left-leaning Lib Dems took office after an election on May 6, swiftly smoothing over differences on issues such as when to start cutting a deficit running at over 11 percent of national output.

The Treasury set out plans on Monday to trim an initial 6.2 billion pounds ($8.9 billion) from the deficit.

Further cuts are expected in an emergency budget to be presented in four weeks and the deficit issue cast a long shadow over the programme.

DEFICIT CUTS A PRIORITY

“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 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.

The coalition tapped into a sense the previous Labour government had extended its reach too far into the lives of ordinary Britons, proposing a Freedom (Great Repeal) Bill to limit the use of CCTV, the storage of DNA samples and e-mail records and to protect the right to peaceful protest.

Led by Cameron and his Lib Dem deputy Nick Clegg, the government is enjoying a political honeymoon, with media largely supportive and markets calmed by first steps on the deficit.

Half of Britons approve of Cameron and Clegg after their first few days in office, pollster Angus Reid said on Tuesday.

However, unions, who traditionally back Labour, signaled that they would give the government a rough ride.

Mark Serwotka, head of the Public and Commercial Services Union whose 300,000 members include many civil servants, urged unions and community groups to defend public services.

Tensions also are lurking below the surface between lawmakers from the two coalition parties.

Former Conservative minister Peter Lilley touched on these when he said he would campaign against changes to the voting system in a referendum, a key Lib Dem demand.

Analysts said the government had outlined an ambitious programme but the acid test would be how the coalition hung together when managing unexpected turbulence.

“Potentially this is clearly a radical agenda. If all 22 bills go through, Britain is going to be a different place,” Bristol University politics professor Mark Wickham-Jones said.

Additional reporting by Adrian Croft, Estelle Shirbon, Tim Castle; editing by Michael Roddy

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