British PM highlights reducing budget deficit, tax reform, support for enterprise

Britain's new Prime Minister David Cameron Friday made his first keynote speech on Friday, saying that tackling the government's budget deficit and rebalancing the economy were the government's principal tasks.

Cameron said "Our economy has become more and more unbalanced, with our fortunes hitched to a few industries in one corner of the country, while we let other sectors like manufacturing slide." It has become over-reliant on welfare, with mass worklessness accepted as a fact of life and around 5 million people now on out- of-work benefits.

"It has become increasingly hostile to enterprise, with business investment in the past decade growing at around one percent each year -- only a quarter of what it was the decade before. It has become far too dependent on the public sector."

Cameron, the Conservative leader and the first coalition government prime minister in Britain since the Second World War 65 years ago, said that he aimed to liberalize tax rates, and to halt and roll back the interference of government in regulating the economy and the country.

He said, "If you're a minister who wants to bring in a new piece of regulation, first you've got to find an existing one to get rid of. No one should underestimate how revolutionary this is. For a long time, the whole business of Whitehall (central government) has been about creating new regulations. This new rule completely blows that culture apart."

He vowed that over the coming months the government would cut corporation tax rates by simplifying reliefs and allowances and tackling avoidance; abolish employers' National Insurance Contributions (the tax paid by employers for the National Health Service) on the first 10 jobs created by new businesses for the next two years and reform tax rules to allow more foreign firms to invest in Britain more easily.

Cameron's Conservative party is often seen as being a party with little support in the major urban areas.

He said he would be appointing ministers for several major cities and urban areas whose job would be to champion those areas and drive growth and jobs, partly by tackling structural obstacles in central government as they arose.

The prime minister was introduced for his speech, which was made in Yorkshire in the north of England in a region which has suffered a loss of manufacturing jobs over the past three decades, by the Cabinet's business secretary, Dr Vincent Cable.

Cable is a Liberal Democrat from the left-wing of his party and many commentators speculate that he will be the first member of the Cabinet to resign because he cannot stomach the coalition's policies.

He undermined these predictions with a public display of support for Cameron, and Cameron went out of his way in speech to highlight the powers he is giving to Cable's department to refuse new regulations unless old ones can be removed.

Cameron said he would promote trade and fight protectionism and work with other international leaders to drive forward the Doha trade negotiations. He also vowed to work with European partners to push forward with free trade agreements between the EU and its key trading partners.

He highlighted concluding a trade agreement with India as a priority. Existing EU-India trade is worth around 50 billion pounds (about 75 billion U.S. dollars) per year he said, so the potential in an EU-India trade agreement for trade, economic growth and jobs was considerable.

Cameron also underlined his determination to be tough on banks. "The hardworking British taxpayer has just bailed out the banking system to the tune of hundreds of billions of pounds. It is time for the banks to repay the favor," he said.

He said banks would be reformed with the Bank of England returned to the heart of regulation an independent commission on bank structure would aim to make banks more responsible -- by getting to grips with the bonus culture and making them serve the real economy and not just themselves -- by opening up credit lines to businesses.

He vowed to work with international partners on a levy on banks.

Cameron's speech comes just over a fortnight after he formed a coalition government with the Liberal Democrat party.

The new coalition government wants to demonstrate its ability to govern and its keenness to do so with a blizzard of reforms and new directions in policy. This week has seen major initiatives fleshed out on -- government debt, with cuts of 6.25 billion pounds (about 10 billion U.S. dollars) announced; education, with policies on freeing schools to govern themselves announced; welfare, which accounts for one third of the government budget, with plans to simplify the system and target cheats; civil liberties, with the Labor party's ID card scheme scrapped.

Further policies are expected next week, but all eyes will be on June 22 when chancellor of the exchequer George Osborne is set to unveil an emergency budget that will demonstrate in detail how the government aims to tackle the record public spending deficit of 156 billion pounds (about 230 billion U.S. dollars).

In a separate development, the last constituency to vote in the general election elected a Conservative member of parliament, bringing Cameron's Conservatives up to 307 seats in the House of Commons and further securing his coalition government's majority.

The vote in the Thirsk and Malton seat, a rural constituency in the north of England, was to have taken place along with all the other 649 seats in Great Britain on May 6. However, the death of one of the candidates caused the election to be postponed to Thursday.

The Conservative Anne McIntosh won, as she was expected to do as the seat is a safe Conservative one, with the Liberal Democrats improving their support in second and the Labor party losing support to finish third.

[Source: Xinhua, London, 28May10]

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