The first state opening of Parliament under a Labour government in 15 years saw 40 bills and draft bills unveiled as Starmer sought to "lay the foundations of real change that this country is crying out for."
The MHP Group Public Affairs team has assessed what has been announced, the likely impact on business and what challenges the new Prime Minister will face as he steers his legislative agenda through Parliament.
What are the highlights of the King’s Speech and what will have the biggest impact on business?
What a new government chooses to include – and not – in its debut King’s Speech gives a powerful indication about its early priorities.
Labour’s pitch to the electorate during the recent campaign was centred on a solemn pledge to boost growth and revitalise public services. It is no surprise then that the speech today majored on the Starmer mantra of “mission-led” government, specifically around turbocharging the country’s economic performance.
What does that mean in practice and what does it mean for business? We have identified some of the highlights of the speech and the opportunities and challenges posed by the legislative agenda.
Planning and Infrastructure Bill
Ungumming the UK’s sclerotic planning system has correctly been identified by Labour as vital to driving growth. This Bill will introduce reform of local planning committees to streamline the system and will focus on bolstering the creaking capacity of planning authorities.
Will this see new homes pop up in double quick time and accelerate upgrades to the national grid? As with all Prime Ministers, Starmer will need to navigate the NIMBY tendencies of his MPs to push through change. Will he falter like many of his predecessors? If he does, it will stall the narrative that Labour are agents of transformation. This will be the source of most major rows in this parliamentary session.
Great British Energy Bill
After energy frankly fell off the agenda in the dog days of the Sunak administration, the sector will be pleased by the focus Labour has shown in its first weeks in power. The mission of delivering clean power by 2030 and energy independence will be brought to life by setting up Great British Energy as the coordinating body, alongside supplementary changes to planning regulation. While setting a long-term direction is something industry has been crying out for, consumer groups will be disappointed that the speech omitted any immediate steps to provide relief to consumers who continue to face high bills in the here and now.
National Wealth Fund Bill
One of the first announcements made by Rachel Reeves upon arrival in the Treasury, this will put the new National Wealth Fund on a statutory footing. The purpose of the fund is to power green investment and infrastructure development, with £7.3 billion worth of funds allocated to it already. It is one of the most crucial of the new initiatives announced since Labour won the election, as it is mission critical to the success of a vast swathe of interlocking policy pledges.
Budget Responsibility Bill
An overtly political move dressed up in the guise of economic responsibility, this Bill will ensure that the Office for Budget Responsibility will assess all tax and spending announcements, effectively acting as a fiscal lock. This is all about Starmer and Reeves reemphasising to the markets that the grown-ups are supposedly back in charge.
Employment Rights Bill
Bans on zero-hours contracts, repealing trade union legislation introduced by the Conservatives and ending “fire and rehire” will be taken care of by this legislation. All of this sounds reasonable, but does it chime in perfect harmony with Labour’s growth mission? Increased costs for businesses to deal with the new bureaucracy could lead to them passing on the costs to consumers. That this is now reportedly the responsibility of Jonathan Reynolds as opposed to Angela Rayner will provide some comfort to business, however.
Skills England Bill
A new quango, the imaginatively titled Skills England will be set up to oversee skills training. This will take over from the Institute for Apprenticeships and Technical Education. Time will tell if this is anything more than a rebadging exercise.
English Devolution Bill
The latest attempt to address what the government has described as the “inconsistent deal based and patchwork approach” to devolution in England, this Bill will devolve further powers away from the centre and create more metro mayors. By further atomising the locus of political power and decision making, the most profound impact of this move will be to create another political audience businesses will have to engage with. It will also be interesting to see how Starmer et al reconcile this devolutionary drive with some of the more muscular and centralising moves they are proposing elsewhere in the speech.
Resetting relations with the EU
One of the most significant elements of the speech is not a specific Bill. The speech said that the government intends to “reset the relationship with European partners and work to improve the United Kingdom’s trade and investment relationship with the European Union”. For obvious political reasons Labour were never going to put this front and centre of any speech, but the UK’s importers and exporters will be hoping that this oblique, passing reference leads to some substantive changes which make trade easier.
The full set of legislation – from smoking bans to reform of the House of Lords – can be viewed here.
How can Starmer make it 'mission accomplished'?
Josh Kaile, Labour expert
After what feels like one of the longest general election campaigns in history, today’s King’s Speech appears to have gone down with little fanfare, in large part because there is little surprise to it. But that is no bad thing.
Although Prime Minister for less than 18 months, Rishi Sunak made numerous attempts to turn the polls in his favour by unveiling headline grabbing policies. Keir Starmer is attempting to break from such behaviour by showing consistency in his message and confidence in his mandate. Having a huge majority certainly makes that easier for him.
There are three important tests for the Prime Minister and his new government.
- First, can his Cabinet deliver these new bills in a timely manner, getting them through parliament and the hundreds of new MPs who are learning how to work in the corridors of Westminster?
- Will the new legislation bring the much talked about growth that Labour has promised? Without growth, Labour will struggle to afford the rest of its planned programme and meet its core economic tests.
- Can Labour stay on track with their legislative agenda when the unplanned hits? The last government had to contend with the war in Ukraine, covid and the conflict in the Middle East. None of them were policy priorities in the 2019 General Election, so can Labour handle the unexpected crises that are thrown at every government and still deliver what they have promised?
Labour has a fairly inexperienced Cabinet and a very inexperienced set of new MPs. They have limited time to learn their new roles. The biggest tests are just ahead, and the country is watching.
If Labour can manage the pitfalls and deliver its programme for government, they may find themselves looking at the two terms Starmer has already said that he requires to deliver the changes he wants to see in the country.
If you would like to get in touch with the team, please contact Head of Public Affairs, Tim Snowball, at tim.snowball@mhpgroup.com