Cabinet of hope and hard work

Tony Blair and the Cabinet yesterday agreed the first Queen's Speech instalment of a radical new Labour agenda for Britain, and kept yet another promise by deciding to forego this year's Cabinet pay rise.

But the Prime Minister's office confirmed yesterday's exclusive Independent report that there would be no early legislation on open government. Action on cigarette advertising and a reform of the financing of political parties could also be stalled.

Having reminded Cabinet colleagues that the pledges made in the campaign would be at the heart of the Government programme, Mr Blair said: "There is hope and optimism out there; hard work to be done in here."

The Cabinet, which broke with tradition and called each other by first names rather than by ministerial title, agreed the Queen's Speech legislative package that will take the new government through to the autumn on next year. The full speech will be delivered at the State Opening of Parliament on Wednesday.

While the Prime Minister's office refused to confirm speculation that the package would contain about 20 Bills, there will be two Bills on education, one on health, another on crime and disorder; and another on the reforms to the Bank of England announced by Gordon Brown, the Chancellor of the Exchequer on Tuesday, along with an early Bill to set up the referendums on Scottish and Welsh devolution..

John Prescott, Deputy Prime Minister, said in Downing Street after the Cabinet had ended that he was very proud of the Queen's Speech.

"It reflects all those priorities that we had in the general election - that of education, crime and jobs, decentralisation and devolution," he said.

"I am looking forward to implementing that programme and showing that a different government can make a difference. And that is what our Queen's Speech will reflect."

The Cabinet agreement to forego this year's pay rise had been promised by Mr Brown last February, when he denounced the excessive nature of the increase that had been awarded under the pay review body process.

Mr Blair will be take an effective pay cut of just under 29 per cent - with a salary of pounds 102,417 rather than the full pounds 143,860 to which he is entitled. Cabinet members will follow his lead by taking an effective pay cut of over 15 per cent, taking pounds 87,851, rather than the full pounds 103,860 which they could draw. The full award will be taken, instead, from next April.

Mr Blair has also decided to set up a new policy unit at Number 10, for the moment headed by David Miliband, who worked in Mr Blair's office in Opposition. He is to be director of policy, but Mr Blair was said to be looking for an overall strategic director, with what one aide called "a melon-sized brain".

But the focus of much attention during the day was on the commitment to open government that Mr Blair had enthused about only last year.

Following yesterday's Independent report that long-awaited legislation was to be delayed for another 18 months, with yet another White Paper to be published outlining Government views, there was confusion yesterday morning when Peter Mandelson, Minister without Portfolio, indicated that there might after all be legislation in the Queen's Speech.

Later, however, he told Sky News: "We have to bring forward a White Paper on it first of all. We can't just pull off some Bill from the shelf and introduce it straight away. But we're very committed to it."

That was not the view of Whitehall insiders, who said that Mr Mandelson was not at all committed to the legislation, described by one very senior source close to the Prime Minister as "the death of journalism".

The same source said there was no watering down of the commitment to legislation, but he said that ministers had been faced with two choices: either to enact the existing Code of Practice on Access to Government Information; or to spend time drawing up "meaningful" legislation.

In the meantime, he said, a Freedom of Information Unit would be set up under David Clark, Chancellor of the Duchy of Lancaster, in the Cabinet office.

Maurice Frankel, director of the Campaign for Freedom of Information, said: "If you give ministers two or three years to operate under the old rules, they will pick up bad habits which they will be reluctant to break."

Other question marks were also being raised last night over the Government's enthusiasm for the abolition of the right of hereditary peers to sit and vote in the House of Lords, and although Mr Blair yesterday welcomed a report on food safety, it was noted that there was no timescale for the creation of a Food Standards Agency.

Leading article, page 19

Suzanne Moore, page 21

Andrew Marr, page 21

Queen's speech: the key legislation

Education Bills - To reduce class sizes for 5, 6, and 7 year-olds, raise standards and tackle under-achievement. General Teaching Council to be established to raise the standing of the profession; stimulation of private finance for school renovation.

Health Bill - Reduction of bureaucracy surrounding internal market, aimed at diverting resources from administration into medical care.

Crime Bill - "Fast track" procedure to deal with persistent young offenders. Probable measures to ensure delinquent children's parents take responsibility; action against disruptive neighbours.

Finance Bill - Changes to the Bank of England, as announced by the Chancellor this week.

Referendum Bill - to set up two referendums, on a parliament and tax- raising powers for Scotland, and on a Welsh assembly. To be followed by full-scale devolution Bills on setting up a Scottish parliament and a Welsh assembly.