Boxnote: The King’s Speech
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Audley Director Rolf Merchant summarises the key bills from HM King Charles III’s speech.
The King’s Speech framed the new government’s legislative agenda as focused on driving economic growth. There were no great surprises in the bills announced; they covered the main legislative proposals well-trailed by Labour during the general election campaign, including on workers’ rights, planning, and the creation of a National Wealth Fund. There were other, smaller and more technocratic bills announced, such as on smart data, pensions, audit reform, and small bank resolution. Of indirect relevance to business is the confirmation that GB Energy will be created, and more railways will be brought under public control.
Key bills in brief
Employment Rights Bill:
Described as “the biggest upgrade to workers’ rights in a generation”, the Bill will ban controversial zero-hour contracts and “fire and rehire” practices, it will make parental leave, sick pay, and protection from unfair dismissal available from day 1 of a job for all workers, make flexible working the default, and update trade union legislation.
Planning and Infrastructure Bill:
Aims to accelerate housebuilding and infrastructure delivery by streamlining the process for critical infrastructure upgrades and simplifying the consenting process for major projects. Most economists argue current planning laws have held back economic growth, so the hope is reform help drive building and, in turn, prosperity.
National Wealth Fund Bill:
Establish a National Wealth Fund (NWF) to invest into “priority sectors” including green industry. The NWF will be capitalised with £7.3bn of taxpayers’ money, with the aim of crowding in a further £20 billion from the private sector. The objective is for the NWF to kickstart business investment, which has never really recovered to the levels seen before the 2007-2008 financial crisis. Low investment has meant productivity has lagged, which in turn has reduced the UK’s economic output and living standards.
Digital Information and Smart Data Bill:
Aims to “harness the power of data for economic growth, by establishing Digital Verification Services, setting up Smart Data schemes (such as Open Finance), enabling more digital public services, and strengthening data protection. This should prove a boost for the UK’s tech and fintech sectors.
Bank Resolution (Recapitalisation) Bill:
Responds to some of the risks made apparent with the collapse of Silicon Valley Bank. It introduces a new mechanism to allow the Bank of England to use funds provided by the banking sector to cover certain costs associated with resolving a failing small banking institution.
Draft Audit Reform and Corporate Governance Bill:
Aims to tackle malpractice in the auditing profession by replacing the Financial Reporting Council with a new regulator - the Audit, Reporting and Governance Authority. This new regulator will be given the powers it needs to tackle bad financial reporting, including sanctions for company directors for serious failures in relation to their financial reporting and audit responsibilities.
Pension Schemes Bill:
Reforms to the pension market, including consolidation of lost “deferred” small pots and consolidating the Defined Benefit (DB) market through commercial Superfunds.
Artificial Intelligence:
Importantly, a new bill concerning AI was not announced, but the King said in his speech that the government would “seek to establish the appropriate legislation to place requirements on those working to develop the most powerful artificial intelligence models”. In practice, this means that the Department for Science, Innovation and Technology (DSIT) will launch a consultation process on what this legislation might include. The timetable for formalising such legislation is unclear, but we should not expect it to come into form during this parliamentary session.
For more information on the King’s Speech or other policy implications following the new government, please get in touch at info@audleyadvisors.com.
By Rolf Merchant, Director at Audley.