King’s Speech reaches for stability – and growth

Less than a fortnight after securing a landslide majority, the new Labour government’s first King’s Speech placed an emphasis on growth, stability and opportunity.

A focus on planning reforms and devolution was squarely aimed at kickstarting economic growth. The programme did not include large government spending commitments given Labour’s emphasis on fiscal discipline and having ruled out certain tax increases; this was reflected in their Budget Responsibility Bill which will require Office for Budget Responsibility assessment of every fiscal event making “significant and permanent changes to taxation or spending” – thus aimed at improving market and public confidence.

There were no huge surprises given how closely most of the announcements mirrored campaign or manifesto commitments, but some of the main Bills of interest to the turnaround and transformation community include:

• the National Wealth Fund (NWF) Bill to put this on a permanent statutory footing; the government has also indicated early work on alignment with the UK Infrastructure Bank and British Business Bank under the NWF. It will aim to generate £3 of private sector investment for every £1 of public investment.
• the Pension Schemes Bill; aside from various consumer measures such as the automatic consolidation of individual deferred small Defined Contribution pots into a single account, it will also amalgamate the Defined Benefit market through commercial superfunds.
• an Employment Rights Bill, which includes a ban on zero-hour contracts and ending “fire and rehire” and “fire and replace” practices
• a Draft Audit Reform and Corporate Governance Bill. This picked up on proposals formulated in the previous session, so there is more detail. It will create a new statutory regulator: the Reporting and Governance Authority and introduce an oversight regime for the audit market to protect against conflicts of interest at audit firms, as well as providing powers to investigate and sanction serious failures by company directors. It will also extend Public Interest Entity (PIE) status to the largest public companies – aimed at providing early warning of financial difficulties, whilst aiming for proportionality by reducing requirements for smaller Public Interest Entities.

One surprise bill is the Bank Resolution (Recapitalisation) Bill, which aims to improve the Bank of England’s response to small bank failures and also allow for the collection of funds from the banking sector by the Financial Services Compensation Scheme which can be used to support the resolution of a failing bank.

On the planning and devolution front, the Planning and Infrastructure Bill is aimed at driving investment and productivity by supporting the delivery of infrastructure projects; its measures seek to streamline and simplify processes, as well as modernising and increasing the capacity of local planning authorities.

The Skills England Bill with create a new public body, Skills England, to manage the replacement for the Apprenticeship Levy, the proposed Growth and Skills Levy. It echoes the Government’s emphasis on devolution by including Mayoral Combined Authority as stakeholders alongside business providers and unions.

On the utilities and energy front, the Great British Energy Bill will establish the publicly-owned energy company Great British Energy to own and operate clean power projects; the Water (Special Measures) Bill will increase accountability including stronger criminal sanctions for water company executives. On the legal and home affairs side, a non-controversial Arbitration Bill has also been revived from the last session, whilst on the sports front, the Football Governance Bill started under the Conservatives for a new football regulator and increased strictures around financial sustainability of clubs has been resurrected. Reflecting the digital transition, a Digital Information and Smart Data Bill and a Cyber Security and Resilience Bill were also introduced. The former is aimed at opening the power of date for economic growth and productivity, including digital public services, putting categories of data onto a statutory footing, whilst providing opportunities in relation to open finance. The cyber bill is focused on strengthening digital defences and protecting critical infrastructure.