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Yahoo! My Yahoo! Mail More Yahoo! Services Account Options New User? Sign Up Sign In Help Yahoo! Search web search Home Singapore Asia Pacific World Business Entertainment Sports Technology Africa Europe Latin America Middle East North America New British PM targets economy in royal speech AFP - 1 hour 2 minutes ago Send IM Story Print LONDON (AFP) - – Britain's new coalition government made slashing the country's mammoth public deficit its top priority on Tuesday, as Queen Elizabeth II set out plans including radical electoral reform. In a traditional ceremony of pomp and splendour, the Queen's Speech unveiled the legislative programme of Britain's first coalition government since World War II to a packed chamber of members of parliament (MPs) and peers. Prime Minister David Cameron's Conservatives and their Liberal Democrat coalition partners said improving Britain's grave economic situation would be their main focus. "The first priority is to reduce the deficit and restore economic growth," the queen said, in the traditional speech written for her by the new premier. The speech came the day after the government revealed the details of plans to cut 6.25 billion pounds (8.9 billion dollars, 7.2 billion euros), the first step in bringing Britain back from the brink of record debt levels. An emergency budget on June 22 will set out the next steps to reduce public borrowing, which soared to 156.1 billion pounds in 2009/2010. Employers' group the Confederation of British Industry praised Tuesday's announcement, with deputy director general John Cridland saying the programme was "ambitious and far-reaching with a clear sense of renewal." But the Trades Union Congress, an umbrella group for the majority of Britain's unions, said the plans would hit the public sector and "only worsen the fragile economic situation." Britain edged out of recession last year, but the economic turbulence the government faces was underlined on Tuesday when stock markets fell sharply on concerns about the eurozone and tensions between North Korea and South Korea. The speech at the State Opening of Parliament also laid out plans for a referendum on scrapping the first-past-the-post system in favour of the Alternative Vote method. The measure was a key demand of Deputy Prime Minister Nick Clegg's Liberal Democrats when they agreed to go into coalition with the Conservatives after the closest general election for decades on May 6. Proposals will be submitted by the end of the year to change the upper house of parliament, the House of Lords, into a "wholly or mainly elected" chamber elected by proportional representation. In another radical departure, Cameron's government would introduce legislation for fixed-term five-year parliaments, with a requirement for 55 percent support of MPs to seek an earlier dissolution. The current system requires just one vote over 50 percent to trigger an election. Key points from the Queen's speech Cameron has argued the proposed change is essential to guarantee the government's stability, but it has already attracted opposition even from some backbench MPs of the governing parties. In the debate which traditionally follows the Queen's Speech, Cameron insisted his government of unusual political partners was "not driven by party interest, but by the national interest", to loud jeers from Labour MPs. Turning to foreign policy aims, Cameron pledged to "ratchet up" pressure on Iran through EU and UN sanctions, saying "all the evidence points in the same direction -- that Iran is intent on developing nuclear weapons". He said he wanted create the conditions in Afghanistan which would allow Britain's 9,000 troops to be brought home, and warned it was a "vital year" in the operation. After the surge of US troops, "what we need now is a political surge with more effective and accountable government, a reformed Afghan police force and proper reconciliation at the centre," he said. Before the Queen's Speech, an anti-war protester who maintains a round-the-clock demonstration outside the Houses of Parliament was arrested as police carried out security sweeps. 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