Ministers buoyant after first Cabinet meeting

Ministers emerged in buoyant mood today after attending the first meeting of David Cameron's new coalition Cabinet.

"It was excellent really, it is like we have been working together for years," beamed Iain Duncan Smith, the new Work and Pensions Secretary as he left Downing Street.

After yesterday's bantering double act between Mr Cameron and his Lib Dem deputy Nick Clegg, the mood of good-humoured optimism appeared to have infected their colleagues at the top table.

Education Secretary Michael Gove was in equally upbeat mood. "It was great, actually," he told waiting reporters as he walked down Whitehall to his new department.

"I think we had a a really constructive meeting. I was delighted by the sense of partnership and common purpose that we had there."

He was asked if the Conservatives had finally buried the hatchet with their former enemies. "There were no hatchets to bury," came back the reply. "We had a great agreement and the Cabinet worked very well together."

To underline the point he left No 10 chatting amiably to Business Secretary Vince Cable - perhaps the Lib Dem minister least comfortable with the idea of working with the Tories.

Earlier, Mr Cable had arrived for the meeting - which lasted around about an hour and 20 minutes - in the equally unlikely company of his new Tory deputy David Willetts and Defence Secretary Liam Fox.

But despite the good humour, there were some who were keen to emphasise the need to get down to the serious business of Government.

Culture Secretary Jeremy Hunt spoke of the "very difficult challenges" ahead.

"We are all very aware of the seriousness of the situation and frankly, if we don't have a credible programme to reduce the deficit - and at the moment Britain has one of the least credible programmes amongst the developed economies - then we won't have the confidence of the world and the confidence of the country," he said.

"The encouraging thing is that I think there is an understanding across all parts of Government that we have got to take very, very difficult decisions."

Downing Street said Mr Cameron and Mr Clegg opened the meeting by stressing their commitment to work together, highlighting their strong shared agenda.

New Chancellor George Osborne then updated ministers on the economy, stressing the priorities of tackling the deficit, and demonstrating that the UK was "open for business".

He also stressed that he would be working closely with Mr Cable on banking reform - even though the two men are known to have had a difficult relationship in the past.

There were discussions on foreign policy, including the situation in Afghanistan, and the parliamentary timetable.

The meeting ended with the Cabinet agreeing to a 5% pay cut for all ministers.

Downing Street said the ministerial pay cut would be followed by a pay freeze for the rest of the Parliament.

For Mr Cameron, the cut means he will receive a ministerial salary of £142,500 - on top of his MP's pay of £64,766 - £7,500 less than the £150,000 he would have been entitled to.

The ministerial salaries for other Cabinet ministers will be cut from £141,647 to £134,565, while the pay for a junior minister in the Commons will be reduced from £94,142 to £89,435.

No 10 estimates that the reductions will save £300,000 this year and around £3 million over the lifetime of the Parliament.

Following the meeting, Mr Cameron addressed No 10 staff, remarking that he had been told his relationship with Mr Clegg was rather better than that between Tony Blair and Gordon Brown, to which he agreed, adding: "But that's not setting the bar very high."

No 10 later issued a seating plan of the meeting showing that Mr Clegg had been placed directly opposite Mr Cameron, flanked by Mr Osborne and Justice Secretary Ken Clarke.

Mr Cameron was flanked by by Foreign Secretary William Hague to the left and Cabinet Secretary Sir Gus O'Donnell to the right.

Ministers were urged by Mr Cameron and Mr Clegg to keep any differences which arise between them private.

The Prime Minister and Deputy Prime Minister will chair a new Coalition Committee specifically set up to resolve any disputes.

Senior Lib Dem Andrew Stunell, who was part of the team that negotiated the coalition deal, said being involved in the talks was like being "a scuba diver in the shark tank".

He told BBC Radio 4's World at One: "It was like a scuba diver in the shark tank really.

"We have got to be realistic about this, obviously it had its moments, I think we could say.

"But the negotiations have produced a very strong agreement, one which I think can be made to work over the next five years and make a real change to the country as a whole."

On the same programme Mr Hague acknowledged that the the negotiations were "tough at times" but were conducted "in a very good atmosphere" which had been retained in the new joint Government.

At the Cabinet meeting Mr Cable was reported to have joked: "Arranged marriages often work better than one born out of love."

Mr Hague told World at One: "He did, and there was a good deal of laughter about that.

"That was the mood of the meeting actually, it was extremely friendly, extremely positive.

"In fact the ministers were all coming up with ideas as to how to strengthen the coalition, the work of our parties, how we would take particular care to brief the backbenchers of the other party in the coalition, which we have all undertaken to do, about our portfolios.

"So it was a very good first Cabinet meeting."

When asked how his first Cabinet meeting went, Mr Cameron smiled and said it was "very good" as he left No 10 this afternoon.

In the latest batch of ministerial appointments, Damian Green has been made Immigration Minister, Nick Herbert is the Policing Minister and Baroness Neville-Jones is the Security Minister.