Video: Cameron is U.K.’s new prime minister

  1. Transcript of: Cameron is U.K.’s new prime minister

    ANN CURRY, anchor: Britain has a new prime minister this morning, 43-year-old David Cameron , the first Conservative in power there in 13 years. NBC 's Dawna Friesen is in London with more on this changing of the guard in Britain . Dawna , good morning.

    DAWNA FRIESEN reporting: Good morning, Ann. Yes, David Cameron has begun day one as Britain 's new prime minister, leading a coalition government alongside another 43-year-old, Nick Clegg of the Liberal Democrats . Up until a week ago, these two men were campaigning against each other. Their parties are ideologically different, but they vowed to set aside those differences and govern in the national interest . Gordon Brown , the former prime minister, made a quick exit from Downing Street last night, ending a lifelong political career. David Cameron has admitted there is a very tough road ahead . Britain faces a record deficit. There are some tough policy decisions ahead , spending cuts to be made, tax increases to come. Whether this Clegg / Cameron coalition can survive

    that is the question. Ann: All right, Dawna Friesen , thanks so much for your reporting on this.

    CURRY:

msnbc.com news services
updated 5/12/2010 8:11:21 AM ET 2010-05-12T12:11:21

Britain woke up to a new political era Wednesday with the first coalition government since World War II — an unlikely marriage between the Conservative Party of right-wing icon Margaret Thatcher and the left-leaning Liberal Democrats.

Details of the coalition alliance are trickling out with the Liberal Democrats having already won several Cabinet seats. The core task of the government, one of the least experienced since center-left Tony Blair's Labour Party won its landslide victory in 1997, will be to tackle the country's record budget deficit.

With a handshake, smiles and waves, the Conservative Prime Minister David Cameron welcomed his new coalition partner, Deputy Prime Minister Nick Clegg, outside the shiny black door at 10 Downing Street and set off on the business of running the country. Cameras flashed.

"This is going to be hard and difficult work. A coalition will throw up all sorts of challenges. But I believe together we can provide that strong and stable government that our country needs," Cameron, Britain's youngest prime minister in almost 200 years, said in his first speech as prime minister.

The agreement between the two ideologically opposed parties that critics say will surely lead to future instability, was reached five days after an inconclusive election and ended 13 years of rule by the party run by Blair and his successor Gordon Brown. The country's Conservatives won the most seats but fell short of a majority, forcing them to bid against the Labour Party for the loyalty of the Lib Dems.

The partnership will have to tackle a record budget deficit running at more than 11 percent of GDP.  It is still unclear whether the Liberal Democrats will back the Conservatives' plan to begin immediate spending cuts — a punishing course of action that isn't likely to win praise from the electorate.

'Put aside party differences'
The coalition has already agreed on a five-year, fixed-term Parliament — the first time Britain has had the date of its next election decided in advance. Both sides have made compromise, and Cameron has promised Clegg a referendum on his key issue: reform of Britain's electoral system aimed at creating a more proportional system.

"Nick Clegg and I are both political leaders who want to put aside party differences and work hard for the common good and for the national interest," Cameron said Tuesday. The alliance was necessary because no party won a majority of parliamentary seats. Voters struggling to make ends meet during the recession were enraged after a damaging expense scandal last year tarred lawmakers from all three parties with claims on everything from pornography to chandeliers.

Despite the differences with their coalition partners, the Lib Dems were celebrating after decades spent in the shadow of Labour and the Conservatives.

"There will of course be problems, there will of course be glitches. But I will always do my best to prove new politics isn't just possible, it is also better," Lib Dem leader Clegg, who will be deputy prime minister, told reporters.

The prime minister's office said late on Tuesday there would be five Liberal Democrats in cabinet in total, including Clegg.  It did not name the other four ministers but there were reports Vince Cable, the well regarded Liberal Democrat Treasury spokesman, would have a role overseeing banking and business.

Banking reform
George Osborne, a close friend and ally of Cameron, will become the new Chancellor of the Exchequer (finance minister), and lawmaker Liam Fox will be defense secretary.

".We're going to undertake long-term structural reforms of the banking system, of education and of welfare so that we have an economy that works for everyone," Osborne told reporters.

Even though some in the finance industry have expressed doubts about Osborne because he is untested and takes over an economy emerging from the worst recession since World War Two, markets broadly welcomed the agreement. The pound enjoyed a strong performance overnight, losing some ground later to trade broadly steady against the dollar.

"What it (the joint agreement) does ... I think is properly balance the need to take some fairly aggressive action to control the budget deficit ... but also to make sure that economic recovery is protected," said Lib Dem politician David Laws, one of the key negotiators during the coalition talks.

The Conservatives are traditionally seen as hawkish on defence, and stocks in the sector were up 2.35 percent on the FTSE 350, an index of share prices for the 300 largest European countries.

The new coalition government also said it would create a national security council to oversee all aspects of the country's security, particularly focusing on policy in Afghanistan and Pakistan.

Newly appointed Foreign Secretary William Hague said the new council would meet later on Wednesday and its first priority is to "get a grip" on Britain's military operations in Afghanistan.

He said the council will integrate all foreign policy and defense decisions at the highest levels of government.

Cameron, who will chair the council, appointed Peter Ricketts, a senior Foreign Office minister, to the new role of National Security Adviser, based in the Cabinet Office.

Cameron's office said the security council will also review the terrorist threat to Britain.

Obama invite
One of the first calls of congratulation to the new prime minister came from President Barack Obama, an acknowledgment of Britain's most important bilateral relationship. Obama invited Cameron to visit Washington this summer.

During the call Obama reiterated his "deep and personal commitment to the special relationship between our two countries — a bond that has endured for generations and across party lines, and that is essential to the security and prosperity of our two countries, and the world," according to a statement on the website of the U.S. Embassy in London.

The president also praised outgoing PM Brown, saying he "provided strong leadership during challenging times, and I have been grateful for his partnership."

Both Cameron and Clegg have acknowledged that Labour under Blair was too closely tied to Washington's interests. Both men back the Afghanistan mission, but Cameron hopes to withdraw British troops within five years. Clegg has said he's uneasy at a rising death toll. Leaner coffers may also mean less money to enter foreign-led military operations.

Relations with European neighbors could also become problematic. Cameron's party is deeply skeptical over cooperation in Europe and has withdrawn from an alliance with the parties of Germany's Angela Merkel and France's Nicolas Sarkozy. Clegg, once a member of the European parliament, has long been pro-European.

Labour, meanwhile, took steps to regroup, with the maneuvering under way for the job of party leader. David Miliband, the former foreign secretary, has emerged as a top candidate and has earned the backing of another early favorite, former Home Secretary Alan Johnson.

Brown's deputy Harriet Harman would become interim Labour leader until a formal leadership takes place to select his permanent successor.

Reuters and The Associated Press contributed to this report.

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