New Labour Government Reveals Plans In King's Speech
The landslide victory for Labour has promised a variety of changes to the way the country is run, and a wide range of these were revealed in the King’s Speech for the State Opening of Parliament. There were around 35 bills announced in the speech, including a new Pension Schemes Bill, Planning and Infrastructure Bill, Great British Energy Bill, Renters Rights Bill, National Wealth Fund Bill, and even a Better Buses Bill.
The Prime Minister, Sir Keir Starmer, detailed in an introduction to the King’s Speech how his Government plans to focus on boosting Britain’s economy, including implementing a plan to prevent the kind of chaos that ensued after the damaging mini-Budget delivered by the short-lived Liz Truss Government.
The Prime Minister said: “This King’s Speech sets out a clear destination for our country. Our plan starts, as it must, with our economy. The economic chaos working people have endured since the mini budget will never happen again with my Labour government. We are introducing a Budget Responsibility Bill to protect taxpayers’ money and people’s living standards. From that foundation of economic stability, we will generate higher economic growth in every community.”
He also highlighted how planning rules will be reformed “to build the homes and infrastructure the country desperately needs”, and workers’ rights are also in the frame for change, “so every person has security, respect and dignity at work”.
The move towards cleaner energy is set to get a boost with the creation of a new publicly owned energy company which “will create a new industrial strategy and invest in cleaner, cheaper British energy; and we will harness the power of artificial intelligence as we look to strengthen safety frameworks”.
He also talked about making sure decisions were being made in Government by people who have “skin in the game” which will help local communities directly.
He added: “Democratic decisions are best made by people with skin in the game, so my government will push power out of Westminster and empower local leaders to deliver for their communities. Local growth plans will make sure that every community can seize the opportunities ahead of us and every person can benefit from higher growth.”
What will the Pension Schemes Bill achieve?
One of the major bills revealed was the Pension Schemes Bill. The bill includes measures to automatically consolidate small pension pots into a single pension to reduce operating costs for the members, which in turn will help improve performance. It also outlines ways to ensure all pension savers are getting value for money from their pension provider.
Pension scheme trustees will also be required to offer retirement income products to pension savers when they reach retirement age, which should help people to make the right decision about how they use their money when the time comes. The bill also aims to change the definition of a terminal illness so pension scheme members can get a lump sum payout earlier.
The response to the plans – many of which continue plans outlined by the previous Conservative government – has been largely positive. Paul Leandro, Partner at Barnett Waddingham, said: We welcome the new Pensions Scheme Bill announced in the King’s Speech today, particularly the increased focus on pension schemes to offer retirement income products or a range of products. Since the full freedoms were introduced in 2015, the retiring and retired populations have been underserved. This is a positive step towards addressing that gap.
“However, the industry shouldn’t just fixate on building new products. Investment is needed into how the options are communicated to people. Retirement products are essentially pointless if people are not informed about them or engaged with them. Supporting people in how to make choices now and on their retirement journey is crucial.”
Mr Leandro also pointed out that the current level of defined contribution (DC) pensions is inadequate, but that the new bill makes no reference to this, or how to encourage people to save more for their future.
He added: “This is disappointing as it’s clear people are not saving enough for retirement, and even with new initiatives around consolidation and value for money, people will still be left with inadequate pension pots unless they save more during their working lives. This is exacerbated by gender and ethnicity gaps, which frustrating do not seem to be covered in the bill and which is a significant concern in the current pension landscape.”
The Renters Rights Bill
People who rent their property in the private rental sector will also see new protections come into force, creating what is being called a ‘level playing field’ in the rental sector. These include abolishing Section 21 – no fault evictions, with clearer eviction grounds being introduced to allow landlords to regain their properties when they need to.
Other measures will help to empower tenants to challenge unfair rent increases, which have been used in the past to effectively force someone from their rented home by pricing them out of it. New laws will also curtail rental bidding wars between agents and landlords. Tenants will also have the right to request a pet, something that many landlords will currently not allow, and all landlords must consider this request and not unreasonably refuse it. This change will help those people who are renting but want to live with their furry friends, and previously may have struggled to find an accommodating landlord.
Other measures mentioned
There were many other measures mentioned in the King’s Speech, including the Employment Rights Bill, which will ban “exploitative” zero-hours contracts, create a minimum wage which is a genuine living wage, end the practice of fire and rehire, and introduce basic employment rights from the first day of employment. This is all part of the plan to boost people’s security at work.
The setting up of Great British Energy will also move Britain towards being a clean energy “superpower” by 2030, according to the supporting documents to the speech. This should also help to lower energy bills for households for good over time. This entity would be publicly owned and will “boost energy security, create jobs and build supply chains in every corner of the UK”, the Government said.
There are many aspects of the King’s Speech that will have an impact on your wallet over time, and we can help you to navigate where you will win and where you will lose. So, if you want to plan for your own or your business finances, then please get in touch with us and we would be delighted to help you.
