By Alice Pugh, Policy and Data Analyst at City-REDI
This week the King delivered the first King’s speech since 1951, though the King has previously done the speech when the Queen was unable to attend. However, the speech is not written by the King, it is written by the government of the day. The purpose of the King’s speech is for the government to outline their priorities in the months ahead, with it marking the start of the parliamentary year. It also gives us a taste of what we can expect to be announced or built upon in the Government’s Autumn Statement later in the month. This King’s speech will be important to the current government as it is likely the last King’s speech before the next general election, which must take place by January 2025. There will be a debate on the King’s speech, followed by a vote on whether to accept the plans set out in the speech. However, the vote is largely viewed as symbolic, as it is extremely rare for a majority government to lose it, with the last time it was lost being 1924.
In the King’s speech this year, 16 bills were outlined however, there is a longer list of 21 bills and laws within the King’s Speech briefing which the Government intends to pass over the next year’s parliamentary session. The key announcements within the bill which will likely have an economic impact on the wider West Midlands region include:
- Offshore Petroleum Licensing Bill
This bill will support the licencing of oil and gas projects in the North Sea to be awarded annually. The Government stated within the briefing that the bill will reduce reliance on international oil and gas markets, thus making energy cheaper in the UK, improving energy independence and security in the long run, alongside growing jobs in the sector. There is no evidence that increasing licensing within the North Sea will improve energy security or reduce energy bills. This is because our energy market is not publicly owned and therefore, the majority of oil and gas produced in the UK is produced by private entities, which sell their oil and gas at the global market price, at which the price is set at an international level not a national level. Additionally, it was reported that the North Sea Transition Authority has found that new licencing would also do little to reduce Britain’s dependence on imports or affect oil or gas prices significantly, given reserves in the basin are declining and oil and gas is trading on the international market. Therefore, it is unlikely that the increasing licencing of north sea oil and gas will actually lead to decreases in energy bills for West Midlands based households and businesses.
- Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill
This bill will enable the UK to join the 11-nation CPTPP trade pact with several countries in Asia and the Pacific. The purpose will be to increase trade between the members of the CPTPP, which includes the member states of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The agreement will also mean both exports and imports are eligible for tariff-free trade, making both exports and imports cheaper from member states. The likely gains incurred by joining the trade partnership will likely be short-term marginal gains. Currently, the UK actually already has trade deals with the majority of the member states, which were carried over from when the UK was a member of the EU. Even including the changes to trading arrangements made by this agreement, the gains expected will be fairly small, with the government estimating that it will only lead to a 0.08% growth in GDP. It is particularly small when you consider that the OBR has estimated that the post-Brexit trade agreement with the EU, the ‘Trade and Cooperation Agreement’ (TCA), will reduce long-run productivity by 4%, relative to having remained in the EU. Therefore, whilst it does not regain the trade advantages that were offered by the EU, it does offer some opportunity to improve competitiveness in some economic markets for West Midlands businesses exporting or importing with these markets.
- Automated Vehicles Bill
The bill will set out a legal framework in Great Britain for self-driving cars. The purpose will be to set out a framework to support the safe commercial development of self-driving vehicles. The President of the AA has stated that such a framework will be key to introducing self-driving vehicles, which could reduce the likelihood of crashes, the workload of emergency services and avoidable casualties. However, Head of Policy at the RAC, stated that whilst it is positive that the UK is creating space for the development of this technology, without the wider infrastructure, introducing this technology to our roads will be a challenge. The RAC stated that the roads and infrastructure in the UK will need to be updated to ensure that the technology can operate safely on British roads. The West Midlands is home to one of the largest automotive industries in the UK; this new framework offers an opportunity for automotive businesses in the region and those in their supply chain to diversify their product range and enter a new emerging market.
- Digital Markets, Competition and Consumers Bill
This bill aims to strengthen consumer rights online, including tackling fake reviews and subscription traps. The long-awaited bill will create a more level playing field for consumers in the digital economy and ensure they are protected from harmful practices and unfair treatment. The bill will also provide greater power to the Competition and Markets Authority (CMA) to tackle anti-competitive activity. So far, research, policy briefings and reviews have been very supportive of this bill which was announced earlier in the year. Researchers have highlighted that not only does the bill give consumers greater protections, it provides the CMA with greater enforcement powers to ensure that businesses in the digital marketide by these new laws and regulations. Businesses in the West Midlands, therefore, will have to ensure that they are abiding by the new regulation, otherwise they could be subject to enforcement from the CMA.
- Data Protection and Digital Information Bill
The bill has been introduced to replace the data protection regime the UK inherited from the EU. The aim of the bill is to make the inherited EU General Data Protection Regulation (GDPR) more ‘practicable and less burdensome in lower-risk situations’, whilst maintaining the high data protection standards ensured under GDPR. The Information Commissioner’s Office (ICO) has already highlighted that continued compliance with GDPR will meet the regulations in the new bill, so firms will likely continue as is, particularly as they are unlikely to change policies in just the UK, when following GDPR will also get them into the EU market. However, there is the potential that the UK could be seen to be violating EU law, meaning the EU has the potential to revoke the transfer of personal data from the EEA to the UK. The advantages of the changes could mean that businesses in the West Midlands which solely operate within the UK may find it easier to comply with the new bill, as there will be ‘less onerous requirements’, however, those trading in the EU will still have to abide by EU GDPR regulations in order to operate there.
- Rail Reform Bill
This bill will create a new body to oversee the railway in Great Britain. This will be an important bill to the West Midlands given it is the logistics and distribution hub of the country and the movement of freight is a significant part of this. However, the bill is yet to be drafted and therefore, little detail has been provided on the development of this bill as of yet.
Overall, there have been no new bills announced (in detail) that will have a significant impact on the region. The majority of bills have already been announced earlier in the year and there has been little development on them. The likelihood is, with regards to economic announcements, they will likely be making the most significant announcements at the Autumn Statement on the 22nd of November. With regards to this we anticipate that the announcements that will be made in the autumn budget will include:
- Pensions– The government will likely announce that pensions will rise with inflation in April 2024, especially given it is an election year and usually conservative supporters tend to be older.
- Green Stamp Duty rebate– Following recommendations from the Energy Efficiency Taskforce, it is likely that the government will offer new homeowners who make their properties more efficient within two years a partial stamp duty rebate.
- Inheritance tax– It is highly likely there will be cuts to inheritance tax (IHT). IHT is currently charged at 40% over the tax free threshold of £325,000 and affects only around 4% of estates in the UK, with around 1 in 8 people (12%) having to pay inheritance tax at some point.
- ISA reform– many economists are forecasting that the Chancellor will make changes to the ISA savings market, in order to boost investment in the UK, largely by launching cash-and-shares ISAs.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the University of Birmingham.