The King’s Speech, 2024: Words into Deeds

Pomp And Circumstance

In most countries the announcement of the legislative programme of a new government takes place at a press conference or is undertaken by a man in a suit at a rostrum in the national parliament.

In Britain, in contrast, it involves horse-drawn carriages, the Household Cavalry, trumpets, page boys, lords in ermine and a monarch, wearing his heavy crown, intoning words written by his ministers with a faint air of incomprehension. There are elaborate rituals of historic importance such as the slamming of the door to the House of Commons in the Black Rod’s face. (The Black Rod was the robust lady wearing breeches and a frilly ruff, carrying a cosh). All of this ceremonial is deeply rooted in our long history. It is the embodiment of the arcane constitutional doctrine of the King in Parliament. It is all, depending on your point of view, wonderfully redolent of our unique heritage – or absurdly Ruritanian.

The substance of the King’s Speech, delivered from the throne on a dais in the House of Lords, was largely foretold. On Wednesday (17 July), around 40 new bills (draft laws) were unveiled by King Charles – more than by Tony Blair’s government in 1997, though some of these sounded admirably vague. “A bill will be introduced to raise standards of education”, His Majesty told us. That sounds a fine thing but of course the devil is always in the detail – how will that be achieved? The phrase “measures will be taken” was a constant mantra. A Speech which impinged on almost every aspect of domestic and foreign policy was all over in less than twenty minutes, even though by historical standards it was long.

“My governments’ legislative programme will be mission-led and based on the principles of security, fairness and opportunity for all”. We can all sleep safely in our beds, then.

Drilling Down: Standout Themes

Labour, we had been told, wanted “to take the brakes off” – to reform the planning system so as to turbocharge a house-building bonanza. Labour wants to build one and a half million new homes over the course of this parliament – so, 300,000 a year. And they are determined that the NIMBYs (the not-in-my-backyard brigade) will not get in their way. (Even though it has been revealed that a number of Labour minsters have opposed housing developments in their own constituencies). New homes will be built on the green belt, despite opposition from some campaign groups such as CPRE. Except that swathes of the green belt are to be re-designated as the grey belt – land which has already been built upon or used for car parking or which has been given over to light industrial use.

A Planning and Infrastructure Bill will reform compulsory purchase rules to ensure that money paid to landowners is fair. Council planning committees will be given additional capacity (i.e. more planning officers) so as to make quicker decisions. How long it will take to recruit more planners is the obvious question. Critical infrastructure will be subject to a more streamlined planning process. We can expect many more solar arrays and onshore wind turbines built on productive agricultural land. As I have written in these pages extensively, there is a trade-off between energy security and food security. If only the new government could articulate that.

A Border Security, Asylum and Immigration Bill will establish the scary-sounding Border Security Command. This new state agency will be given the task of investigating and then “smashing” the people-smuggling gangs. There will be tougher penalties for supplying boats and other equipment to the gangs. (But surely that takes place in France, outside of our jurisdiction – no?). The Command will supposedly be funded by scrapping the Rwanda deportation scheme. The bill also aspires to clear the backlog of asylum claims including some 90,000 migrants who would have been sent to Rwanda who are currently lodged in hotels at the taxpayer’s expense. Presumably, they will all be given leave to remain and unleashed into the workforce.

An Equality Bill will put race on the same footing as gender in equal pay claims in order to “create a more equal society and support a growing economy”. Under this law, ethnic minorities and disabled people will have a “full right to equal pay”, bringing their legal protections in line with those of women.

A Renters’ Rights Bill will abolish Section 21 “no-fault evictions”. Thus, it will become more difficult for landlords to dislodge undesirable tenants. Tenants will be accorded the right to have a pet, which landlords will not be able “unreasonably” to refuse. It will establish a “digital private rented sector database” designed to collate “key information” (exactly what?) for landlords, tenants and councils.

The new Crime and Policing Bill will also give police new powers to impose Respect Orders – a revamped form of New Labour’s ASBO – to empower police to combat anti-social behaviour. Breaching such orders will be a criminal offence, punishable by imprisonment or fines. The bill will also create a new specific offence of assaulting a shop worker. It will scrap the £200 limit on the amount of goods stolen before police are required to investigate alleged shoplifting. It will also restrict the sale of certain types of blades. A Victims’ Bill will give courts the power to force convicted offenders to attend their sentencing. Sex offenders will be unable to change their names.

A Children’s Wellbeing Bill will introduce free “breakfast clubs” in all primary schools in England and will supposedly cut the costs of school uniforms for parents. It will also require academies (one of Tony Blair’s proudest achievements) to teach the national curriculum as per maintained schools.

An Employment Rights Bill will increase the minimum wage and will eliminate the reduced rate for under-21s. It will ban zero-hour contracts and the practice of “fire and rehire” whereby people can lose work-based benefits. It will extend flexible working, making that the default option as soon as an employee is hired. All legislation since 2010 relating to trade unions will be repealed. Parental leave and sick pay will be available from day one for new employees.

The Passenger Railway Services (Public Ownership) Bill will bring rail companies back into public ownership as and when their operating contracts expire. If I understand correctly, there will be no compensation for shareholders. A Railways Bill will set up Great British Railways, a new body to manage the rail network and bring in a simpler ticketing system. I suspect that will be popular. A Better Buses Bill will allow councils to set up publicly owned bus companies. (Can’t they do that already?).

A Budget Responsibility Bill will impose a “fiscal lock” whereby all future budgets will be subject to an assessment by the OBR. No more kamikaze mini-budgets, then. A National Wealth Fund Bill will establish a £7.3 billion fund to invest in growth-boosting infrastructure projects.

A Pension Schemes Bill will increase the amount that people who pay into private pensions can draw down in retirement. This will supposedly prevent people who have paid into several different pension schemes from losing track of their pension entitlements. People with terminal illnesses will be able to access their pension pots early.

Labour will resurrect Mr Sunak’s proposed smoking ban, barring anyone born after 2009 from buying cigarettes. That measure ran out of time at the end of the last parliament. Labour’s Tobacco and Vapes Bill will, over time, gradually end the sale of all tobacco products. It will crack down on vapes marketed to children.

There will be a “short and narrowly focused” bill to bring about modernisation of the House of Lords by removing the right of the 92 remaining hereditary peers to sit and vote there. Even though some of them are the most hard-working members. The rumoured mandatory retirement age of 80 for their lordships did not come to pass.

Labour’s aspiration to lower the voting age to 16 did not feature in the Speech. Nor did a commitment to scrap the two-children benefits cap.

Economic Outlook

Labour have talked extensively about their grim economic inheritance. And yet the news flow over the first two weeks of the new government has been positive. The IMF expects the UK to grow faster next year than any other major European economy. Inflation has been tamed and is now running at the Bank of England’s target rate of two percent. The markets widely expect a cut in the base rate, possibly as soon as next month. Mortgage rates have been easing in anticipation. Government borrowing costs are attenuating as gilt yields moderate. Consumer confidence is up. After a cool and damp spring and early summer the sun is shining at last, literally and metaphorically.

The national finances, however, are still a cause for concern for a government which has ambitious and costly spending programmes. They want to reboot the NHS and reduce waiting lists, to solve the undoubted crisis in England’s prisons, to renationalise the railways (and possibly the water companies too) and to raise defence expenditure to 2.5 percent of GDP. Most commentators think that therefore taxes will have to rise – or rather that the total tax-take will have to increase, with additional taxes being largely borne by “the rich” and by business.

The word is that rates for capital gains tax will be aligned with those for income tax, so 20 percent for basic rate taxpayers and 40 percent for higher earners. Moreover, it is rumoured that certain exemptions for inheritance tax (IHT) will be removed: in particular on the bequest of shares in non-listed companies and on farmland.

Family-run, private companies form the backbone of the British economy and employ an estimated six million people. Even large companies like the world-class industrial equipment manufacturer JCB, which has global annual sales of about $7 billion, is still owned and run by the Bamford family. Timpson Group, the dry cleaning to shoe repair one-stop shop, is another company entirely owned and run by a prominent family – indeed, former CEO James Timpson has just been made minister for prisons in the Department of Justice and has a seat at cabinet. (The company has an admirable track record of giving a second chance to ex-offenders). Such companies might not be able to survive as private companies if IHT were applied to the inheritance of shares. The private equity vultures would swoop.

And if IHT were to be imposed on the inheritance of farmland, quite simply, many family-run farms would have to sell up to corporate and industrial farmers. Currently, all cultivated farmland, whether farmed directly or rented out to tenant farmers, is exempt from IHT. Significantly, agricultural land given over to “rewilding” (basically, woodland) is currently subject to IHT. So, the Tories actually penalised the promotion of biodiversity. Let’s see what Labour will make of that.

The Great Reset

On Thursday, Sir Keir Starmer hosted the European Political Community Conference of nearly 50 European and almost-European heads of government at Blenheim Palace, Oxfordshire. This was a timely opportunity to initiate the new government’s stated policy “to re-set” the relationship between the United Kingdom and the European Union. The optics were pleasing but it is too early to say how this will play out. A new page has been turned, however – and that is for the good.

Business As Usual

This King’s Speech was not a Marxist manifesto of a kind that we might shortly hear in our much-loved near-neighbour, France. What we learnt on Wednesday was that the new UK government is ambitious and energetic. Even though there is little reason to suppose thus far that they will succeed in their objective to dynamize the British economy and to create a more orderly society. Of course, fair-minded people will give them the benefit of the doubt – for now.

What is clear is that, after the slightly unreal hiatus of the election campaign, British politics is back to normal – only this time a Labour government with a huge majority is to be held to account by a much diminished and discouraged Tory Party, assisted by a phalanx of 72 Lib Dem MPs. The Lib Dems are the ultimate NIMBYs – they inhabit congenial southern market towns, chocolate box English villages, the gorgeous Lake District and the majestic Scottish Highlands. They will not countenance the march of pylons across the countryside nor the construction of low-density housing on greenfield sites. That will be interesting.

Is the British economy – and British business – a BUY or a SELL? Overall, I think the economic weather has changed, though that is not Labour’s doing. They have been lucky, as was Blair. The prospect of improvement is decent. Britain is evidently a stable democracy with abundant talent. The ship of state is on an even keel. This country has some fantastic companies at the cutting-edge of technology (on which much more soon). The upside eclipses the downside.

Ignore the Daily Telegraph and the Daily Mail. BUY.