What did the UK King's Speech contain for business?

The King's Speech took place on 17 July, setting out the new government's legislative agenda. Our Knowledge Lawyers have selected some highlights for businesses from the 39 bills proposed, covering 12 distinct areas including significant reforms to real estate and employment law, data regulation and corporate governance.

In general, much was as had been anticipated, but businesses will have to wait for further detail when the bills are introduced and await the government's detailed tax announcements at its first budget.

Artificial intelligence

Just before the King's Speech, there had been press speculation that there was likely to be an AI bill included in the government's legislative plans. However, that turned out not to be the case.

There are only two mentions of AI in the briefing notes: one in the prime minister's introduction, stating that the government will "harness the power of artificial intelligence as we look to strengthen safety frameworks", and the other in the King's address, where he said that the government will "seek to establish the appropriate legislation" in which to include provisions regulating those developing the most powerful AI models.

This latter statement would suggest that either the legislation is not ready and needs further work or that the government intends to hold a further period of consultation due to disagreements or a lack of direction over how to resolve some of the thornier issues. However, given that the Department for Science, Innovation and Technology has been working on draft AI legislation for some time now and there has already been a consultation on AI courtesy of the previous government, the new government might consider a further period of general public debate unnecessary.

Labour's manifesto suggested that some issues, such as putting voluntary AI safety commitments on a statutory footing to ensure that they are adhered to, were a "done deal". This may indicate that any further consultation on AI regulation would be targeted to the more tricky areas, such as how to resolve the conflict over AI development and intellectual property (IP) rights (on which no further clarity was provided). Given that drafting legislation for AI is likely to be complicated, it might well just be a case of the text not yet being finalised. We could therefore see a new bill during the course of this Parliament, despite it not being included as a priority for this session.

Banking

Banking Resolution (Recapitalisation) Bill

The King's speech announced a Banking Resolution (Recapitalisation) Bill.

The UK already has a resolution regime for banking institutions which provides the Bank of England (as the UK's resolution authority) with powers to stabilise banking institutions that fail. The powers include using a bail in strategy, the sale of the bank to a third party purchaser or holding the bank in a bridge bank. The objective of these powers is to protect financial stability, enhance confidence in the financial system and protect depositors while limiting risks to the taxpayer.

Larger banks are required to hold a certain amount of their own equity and debt that can be deployed to recapitalise them in the event of failure. The expectation was that failing smaller banks would be dealt with through the Bank Insolvency Procedure, rather than through the use of resolution powers, but the use of resolution powers has also been demonstrated to be an effective tool for dealing with failing smaller banks.

Rather than expecting smaller banks to hold loss-absorbing capital, which is seen as impractical, the Bank Resolution (Recapitalisation) Bill intends to introduce a new mechanism to allow the Bank of England to use funds provided by the banking sector to cover certain costs associated with resolution. These funds would be provided by the Financial Services Compensation Scheme in the event of a failure and subsequently funded by a levy on the whole of the deposit-taking banking sector.

This does not mean that the new mechanism would automatically be used in all cases of small bank failure – the Bank Insolvency Procedure may be the most appropriate tool – but the new mechanism will give the Bank of England more flexibility to adopt the most effective approach having considered the statutory resolution objectives.

The intention of the bill is to provide more certainty on funding and recapitalisation of small banks in resolution and enable the Bank of England to use resolution powers while ensuring that the costs of any small bank failure are borne by shareholders and the UK banking sector and not the taxpayer. 

Corporate governance

Long-delayed audit and corporate governance reforms resurrected

The Audit Reform and Corporate Governance Bill announced in the King's Speech will establish a new, more powerful accounting regulator, the Audit, Reporting and Governance Authority (ARGA) to replace the Financial Reporting Council (FRC).

The FRC has welcomed the announcement, stating, "this positive direction of travel recognises our important role in supporting the UK's reputation for good corporate governance, financial reporting and audit."

The legislation had originally been delayed under the previous government, despite the Chartered Institute of Internal Auditors (CIIA) warning that the need for audit reform was "urgent", following high profile corporate accounting failures such as BHS and Carillion.

However, the long-awaited legislation will be in draft form and is not expected to be passed into law in the first 12 months of the Labour government.

New watchdog

The legislation will put the FRC on a statutory footing, building on the FRC's transformation in recent years into a more robust regulator. Having a statutory regulator will strengthen the oversight of audit quality and therefore support long-term investment in UK companies, and reduce the risk of material harm from financial reporting errors to employees, communities, investors and businesses. 

Increased sanction powers

The regulator will have increased powers to challenge bad financial reporting.  This will include the powers to investigate and sanction company directors, likely of large companies only, for serious failures in relation to their financial reporting; currently, directors can only be held accountable by the regulator if they are members of an accounting body. This will increase the liability of CFOs, among others.

More large companies will be subject to rigorous audit requirements

Public Interest Entity (PIE) status will be extended to large unlisted companies, subjecting them to more rigorous audit requirements.  It is probable that what is a large company will be defined by turnover and size of employee workforce.

At the same time, smaller PIEs will have unnecessary rules removed to reduce the regulatory burden on them.

New audit market oversight regime

A new regime will be introduced to oversee the audit market, protect against conflicts of interest and build resilience.

As with any legislation, we await the draft provisions to see the scope of the new powers for the ARGA and any new obligations for auditors, companies and their directors. As the Audit Reform and Corporate Governance Bill's title also includes "governance", it is reasonable to assume that it will also contain some other corporate governance changes not set out above.  These may include items included in the 2022 Conservative government response to the consultation on audit and corporate governance.    

Data

Digital Information and Smart Data Bill

The government has, as predicted before the election, re-introduced legislation on digital identity verification and smart data. It was expected that this would be included in a new AI bill, but instead the government will be bringing the provisions forward in a new Digital Information and Smart Data Bill (DISD bill).

The new bill aims to "harness the power of data for economic growth" by putting digital verification services, a national underground asset register and smart data schemes on a statutory footing. The reintroduction of smart data provisions will be welcomed by data-driven businesses and those developing innovative products and services. Creating data-sharing ecosystems throughout the economy and enabling digital identity verification will be seen by many as crucial to generating economic growth.

The bill will also amend the Digital Economy Act 2017 to allow the government to share data about businesses that use public services in order to enable more and better digital public services.

IP implications?

The government also promises that the bill will allow scientists to use data on the basis of "broad consent" for scientific research and enable scientists undertaking research in commercial settings to "make equal use of our data regime". This is similar to provisions contained in the Data Protection and Digital Information Bill that fell in the pre-election "wash-up" period, but might (depending on the wording of the bill) resurrect the AI and IP debate surrounding the text and data mining (TDM) copyright infringement exception. It is likely that this is intended to refer to personal data and the privacy and data protection regime. However, the vague nature of the wording means that there are questions about how "data" in this context will be defined and whether there are any potential IP implications.

For example, will it be limited only to "personal" data? What if that data is contained in a database protected by database rights? Will the bill clearly exclude copyright works from its scope, for example, published scientific papers that are protected by copyright and often behind paywalls? If copyright works are not explicitly excluded, the TDM exception would need to be reconsidered. That said, however, re-exploring a broad TDM exception would appear to run counter to the government's strategic approach set out in the run-up to the election.

Other changes

In addition, the DISD bill will strengthen the Information Commissioner's Office by changing its structure and giving it "new, stronger powers". This will be accompanied by "targeted reforms" to some data laws where there is currently a "lack of clarity" that is blocking technological advances and adoption. The government promises that these reforms will "maintain high standards of protection" and that "standards for digital identities around privacy, security and inclusion" will be promoted, but privacy groups have raised concerns, fearing a lowering of regulatory standards. The detail will only be understood once the new bill is published.

Finally, the bill will establish a Data Preservation Process that coroners can initiate if necessary and appropriate to support their investigations into a child's death. This is to help them get access to the necessary online information. However, there is no mention of giving families of children who have died, as well as coroners, access to a child's social media data, as campaign groups have been requesting.

What was not in the speech

In terms of digital and data law, there was nothing on online safety, despite the Labour manifesto stating that it would "build" on the Online Safety Act 2023, including exploring further measures to keep everyone safe online, and bring forward provisions "as quickly as possible".

There was no specific mention of a National Data Library in the section on the DISD bill, nor any mention of the new Regulatory Innovation Office the Labour manifesto promised. There was also no mention of legislation to create a new criminal offence for the generation of non-consensual sexualised deepfakes and nothing on plans to tackle online fraud, strengthen rules to prevent the online sale of knives, update the rules on countering extremism (including online), and give women the right to know the identity of online stalkers.

Dispute resolution

Arbitration Bill

It has been confirmed in the King's Speech that the government intends to re-introduce the Arbitration Bill.

A reminder of the key reforms which the bill will introduce:

• clarifying that the law of the arbitration agreement will be the law of the seat (unless agreed otherwise);
• arbitrators will be required to disclose circumstances that give rise to justifiable doubts about their impartiality;
• strengthening arbitrator immunity from suit for resignations;
• empowering arbitrators to make awards on a summary basis;
• empowering courts to make orders supporting emergency arbitrators; and
• revising the framework of challenges on the basis that the tribunal lacks jurisdiction.

In re-introducing the bill, the government acknowledged the importance of arbitration to the British economy (worth £2.5 billion a year, including legal fees).

What was not in the speech

The Litigation Funding Bill (which was also dropped following the prorogation of Parliament) is not mentioned in the King's Speech (although that does not mean that it will not reappear at a later date). Its omission is perhaps a surprise, given that the bill was intended to overcome a recent Supreme Court decision which was seen as potentially being a bar to mass litigation brought by individuals against large companies.

Employment

Employment Rights Bill, Equality (Race and Disability) Bill and Skills England Bill

The King's Speech confirmed that the new government will push forward with plans to introduce "a new deal for working people to ban exploitative practices and enhance employment rights" in a new Employment Rights Bill.

The government's briefing paper accompanying the King's Speech states that it intends to introduce in the Employment Rights Bill the measures set out in its Make Work Pay plan that require primary legislation. Details of the measures in that plan are set out in our earlier Insight.

The wording of the briefing paper is unclear as to which of the Make Work Pay measures will be included at this stage in the new Employment Rights Bill, but the following are expressly referred to and may provide some indication as to what businesses can expect:

• Banning exploitative zero-hours contracts.
• Ending the scourges of "fire and re-hire" and "fire and replace".
• Making parental leave, sick pay and protection from unfair dismissal available from day one on the job for all workers. Ensure employers can operate probationary periods to assess new hires.
• Strengthen statutory sick pay by removing lower earnings limit as well as waiting period.
• Make flexible working default from day one for all workers – employers will be required to accommodate this as far as is reasonable to reflect the modern workplace.
• Strengthen protection for new mothers by making it unlawful to dismiss a woman who has had a baby for six months after her return to work except in specific circumstances.
• Establish a new Single Enforcement Body, also known as a Fair Work agency.
• Update trade union legislation so it is fit for a modern economy, including removal of minimum service levels.
• Simplifying the process of statutory recognition and introducing a regulated route to ensure workers and union members have a reasonable right to access a union within workplaces.

The briefing paper states that the bill will extend and apply to Great Britain.

It also confirms that the government will “introduce” this bill within the first 100 days and the text should therefore be laid before Parliament by 12 October 2024, at which point it will commence the parliamentary process through both Houses. Even when the bill becomes law, some provisions may still not become effective in practice until secondary legislation has been passed, together with any supporting codes of practice.

We may see proposed changes to the statutory national minimum wage implemented more quickly, as these will only require implementation via secondary legislation.

A draft Equality (Race and Disability) Bill was also announced. The government will publish legislation in draft to "enshrine the full right to equal pay in law" for ethnic minorities and disabled people". It will also introduce mandatory ethnicity and disability pay reporting for larger employers (those with 250 plus employees) to help close pay gaps. The draft bill is likely to extend and apply to Great Britain, mirroring measures in the Equality Act 2010 relating to equal pay and gender pay reporting.

Plans were also announced for a Skills England Bill, intended to ensure workers have the skills needed for the future.

For more on the proposed measures, see our Insight.

Financial services

Securing economic growth has been set out as "a fundamental mission" in the King's speech, and Labour has been clear that it sees the success of the financial services sector as key to the success of the country as a whole. As expected, however, there was nothing put forward in the speech that changed or added to the government's published plan for financial services.

Investment

The National Wealth Fund Bill

The King's Speech announced the much-anticipated National Wealth Fund Bill, which will put the new £7.3bn national wealth fund on a statutory footing (the NWF). (See our Insight for more on Labour's growth plans.)

The NWF will be central to the government's mission to deliver growth and a greener economy and will provide funding for transformative investments in priority sectors, across the country, working with local leaders. Investment made via the NWF will seek to deploy £1.8bn to ports, £1.5bn for gigafactories including for electric vehicles, £2.5bn to clean steel, £1bn for carbon capture and £500m to green hydrogen.

The NWF will aim to generate £3 of private sector investment for every £1 it invests and will, according to Rachel Reeves, the chancellor of the exchequer, act as "a concierge services for investors and businesses that want to invest in Britain, so they know where to go".

To ensure a rapid deployment of capital, the UK Infrastructure Bank, which has a track record in crowding in private investment, will have its remit expanded, so that it can make and manage the investments with government money.

Rachel Reeves has said that the British Business Bank will reformed so that it can "mobilise the UK's deep pools of institutional capital by harnessing its pipeline of investments and track record as the UK's largest investor in venture capital."

Both the UK Infrastructure Bank and the British Business Bank  will be aligned with the NWF to enable this single coherent offer for businesses.

The fund could help plug funding gaps for some infrastructure projects where private investors may find the investment too risky to invest alone, but with pressures on government funding across the board, questions remain over the source of the substantial £7.3bn fund. It is anticipated that closing loopholes on a windfall tax on oil and gas giants will contribute to the NWF at a rate of £1.5bn per year. The budget statement later in the year will provide more clarity.

Effective management will be needed and strong governance, including the selection and monitoring of projects to ensure good value for money for taxpayers.  While the intention is that investments will generate an annual return, there is no guarantee. The Treasury has not estimated its projected return on investments for the taxpayer, but the UK Infrastructure Bank’s own targets could imply a return could be between 2.5% and 4%.

We await the draft provisions to see more information on how the NWF will operate; the devil will be in the detail.   

Pensions

Pension Schemes Bill

The trustees and employers of UK occupational pension schemes will be interested in the plans for a new Pension Schemes Bill to "encourage … consolidation and focus… on value and outcomes for members."

The bill will include measures to "consolidat[e] the Defined Benefit (DB) market through commercial superfunds". This sounds like the long-awaited legislative framework for commercial DB superfunds, but query if the idea of a public consolidator will also be taken forward. There is a proposal to change the definition of "terminal illness" in Pension Protection Fund and Financial Assistance Scheme legislation to allow eligible members to receive a lump sum payment at an earlier stage. And trustees will welcome plans to remove the need to apply to the County Court to enforce a Pensions Ombudsman decision that confirms the trustees can recover past overpayments by recoupment (deduction from future pension payments).

Defined contribution (DC) schemes can expect to see new value for money requirements ("a standardised test that trust based [DC] schemes will need to meet to demonstrate they deliver value"), a new trustee duty to "offer a retirement income solution or range of solutions, including default investment options, to their members", and legislation to introduce automatic consolidator funds for small deferred DC pots.

We will not know exactly what is planned until we see a draft bill. However, it looks as though the new bill would sweep up a number of changes that were on the previous government's "to do" list. The proposals also confirm that we can expect the new government to continue to support the themes of improving member outcomes and moving to fewer, larger, schemes able to consider investment in a wider range of assets (including UK illiquid assets and infrastructure).

Trustees and employers will also be interested in the Employment Rights Bill and draft Audit Reform and Corporate Governance Bill, discussed elsewhere in this Insight.

Product regulation

The Product Safety and Metrology Bill

The government has set out plans to introduce a Product Safety and Metrology Bill which will "preserve the UK’s status as a global leader in product regulation, supporting businesses and protecting consumers".

One of the most notable aims of the bill is to allow updates to UK law to recognise new or updated EU product regulations where beneficial, while also enabling the UK to end recognition of EU regulations where advantageous. The notes provided alongside the proposed bill recognise that the EU is reforming product safety regulations in line with technological developments, for example the new EU General Product Safety Regulation and the EU Product Liability Directive. This aspect of the bill illustrates the government's intention to facilitate easier alignment with the changes being introduced by EU regulations as well as allowing for necessary divergence, a move that is likely to be welcomed by businesses.

The bill will also address the divergence within the UK internal market caused by the Windsor Framework, granting the government powers to manage this divergence and adopt a UK-wide approach when beneficial.

Other aspects of the bill include: responding to new product risks, such as those posed by AI and lithium-ion batteries; enhancing compliance and enforcement capabilities, including improved data sharing between regulators and market surveillance authorities; clarifying the responsibilities of those in the supply chain, including online marketplaces; and updating the legal metrology framework to ensure accuracy in weights and measures, supporting technological progress and net zero aims.

HFSS restrictions

The speech announced government plans "to restrict advertising of junk food to children along with the sale of high caffeine energy drinks to children", however it lacked specifics of what these restrictions will entail. Therefore, while it is hard to comment on who and what will be caught under new legislation, the announcement illustrates that restrictions on high fat, salt and sugar products are still very much on the government's agenda and that new restrictions will be implemented.

The Tobacco and Vapes Bill

The Tobacco and Vapes Bill has been included in the legislative agenda, following the government's manifesto pledge to introduce it.

The bill will introduce a progressive smoking ban which will mean children born on or after 1 January 2009 will not be able to legally buy cigarettes. It will also stop vapes and other consumer nicotine products from being deliberately branded and advertised to appeal to children and will provide ministers with powers to regulate the flavours, packaging, and display of vapes and other nicotine products. It will also give Trading Standards stronger enforcement powers to take action.

The aims of this bill appear to mirror what the previous government had set out to do, but further information will need to be provided to determine the details and scope of this new legislation.

Cyber Security and Resilience Bill

A Cyber Security and Resilience Bill has been included that aims to strengthen the cyber defences of the country's critical infrastructure and digital services. The bill will update the existing regulatory framework by:

• expanding the scope of the Network and Information Systems (NIS) Regulations 2018 to cover more digital services as well as their supply chains;
• provider regulators with greater powers and resources to ensure implementation of essential cyber safety measures and to investigate potential vulnerabilities; and
• mandating reporting for ransomware attacks and expanding the type and nature of incidents that regulated entities must report.

While the King's Speech does not explicitly refer to this legislation imposing further restrictions on the hardware of products, it will be of interest to those who manufacture software or hardware products. It may include provisions on how to make products more secure, affecting both the development and maintenance processes

Real estate

Housebuilding

Planning reform remains a high priority. The government briefing notes accompanying the King's Speech set out the details of a proposed Planning and Infrastructure Bill designed to "speed up and streamline the planning process to build more homes" and a statement that democratic engagement should concern "how, not if, homes […] are built".

We are told that the a bill will modernise planning committees, but not yet how. As committees tend to determine the largest and most controversial applications received by local planning authorities (LPAs), there is real scope to speed up the grant of permissions if more approvals can be granted at that level rather than on appeal.

There is also a promise to increase LPAs' capacity in order to improve performance and predictability for developers and investors. A reference to a funding shortfall of £262m per annum for local planning services suggests that more funding will be made available to achieve this aim, over and above the manifesto commitment to fund 300 additional planning officers.

The trailed reforms to compulsory purchase rules also appear in the briefing notes, with a lower level of compensation to be paid to landowners where the powers are used to deliver infrastructure and affordable housing, which it is said will benefit housebuilding more widely, through unlocking sites and enabling land assembly.

The bill is intended to accelerate housebuilding by "using development to fund nature recovery where both are currently stalled". While not explicitly stated, this will be read as a reference to addressing the linked issues of nutrient pollution affecting protected sites and the related planning rules which are estimated by the Home Builders Federation to be blocking delivery of approximately 160,000 homes. There is also a suggestion that the government will publish a consultation on the best way forward over the summer and that it is considering a mechanism based on developer contributions.

The briefing notes provide detail on a proposed English Devolution Bill "to give new powers to metro mayors and combined authorities" including "enhanced powers over strategic planning [and] local transport networks". A Cabinet Office statement has also said that mayors would be enabled to “work across local authorities in their area to identify the most promising sites for development".

The government is clearly focused on speeding up the planning process and granting sufficient permissions to support its headline aim of enabling 1.5 million new homes to be constructed across the next five years. While delivering 300,000 houses is implausible in the first year of the government's term, its strong mandate is likely to inspire confidence about its ability to deliver legislative change.

The industry will now be awaiting the detail in the form of draft bills and a consultation on revisions to national policy promised this month, including the policy surrounding releases of greenbelt land and the return of mandatory housing targets. It remains the case that high targets for affordable housing and environmental standards could make the necessary developments unviable for many private sector developers. It also remains to be seen whether the government is able to address the shortage of labour, estimated by the Construction Industry Training Board to be around 150,000 skilled workers.

Leasehold and commonhold reform

Announcements on this subject were largely as predicted.

Commonhold is to become the new default tenure for flats. The Leasehold and Commonhold Reform Bill will provide a revised legal framework for commonhold and restrict the sale of leasehold flats (following consultation) and the government intends to implement the Leasehold and Freehold Reform Act 2024.

The Leasehold and Commonhold Reform Bill will also implement remaining Law Commission recommendations to bolster leaseholder rights in relation to leasehold enfranchisement and the right to manage, regulation of ground rents for existing leaseholders and ending "the injustice of forfeiture".

The government's intention to prioritise further measures to regulate management and running costs for owners on freehold private estates was also confirmed. There will be a consultation on the best way to end unfair costs and implementation of new protections for home owners on such estates contained in the Leasehold and Freehold Reform Act 2024.

Investors will watch closely for further developments on the proposals to regulate ground rents, which may or may not draw on the proposals in the previous government's consultation on them. Other key concerns will include the impact of the abolition of marriage value and the changes to thresholds for non-residential use floor space in collective enfranchisement claims. As the Act was hastily introduced in the "wash up" period before Parliament was prorogued, there has been  inadequate scrutiny of the effect of the provisions which could make it trickier to implement.

Renters' reform

As anticipated, the legislative programme provides for a thorough overhaul through the introduction of a Renters' Rights Bill. As also expected, on headline points at least, the new bill appears to revive many of the key measures in the shelved Renter's (Reform) Bill.

It will provide for: abolition of section 21 "no fault" evictions; mechanisms to contest unreasonable rent hikes, ending the practice of "rental bidding wars"; application of a Decent Homes Standard to the private rented sector; creation of a digital database to hold key information for landlords, tenants and councils; a new ombudsman; and strengthening of councils' enforcement powers.

Additionally, the new bill will be the vehicle for two more expected measures: the application of Awaab's law to the private rented sector and making it illegal for landlords to discriminate against tenants in receipt of benefits or who have children.

Much key detail has yet to be provided. In relation to the abolition of section 21 "no fault" evictions, the bill will set out "new clear and expanded possession grounds" but it remains to be seen what these are and how they compare to those set out in the Renters' (Reform) Bill.

We also have yet to see whether there will be transitional provisions for existing tenancies and whether the previously expected exception for purpose-built student accommodation will be retained. The detail on these points and the timescale to implementation will remain key concerns for landlords.

Martyn's law

As expected, the Terrorism (Protection of Premises) Bill will be reintroduced, meeting the government's manifesto commitment. The bill will require those responsible for certain public venues to take steps to mitigate the risk of terrorist attacks in those venues. Detail as to the premises in scope and the nature of those measures is awaited but, as previously, larger premises and certain public events can expect a greater cost and regulatory impact.

'Strong new' right to buy 'valued' community assets

This aims to help revamp high streets, with premises such as empty shops, pubs and community spaces in scope. It is to be introduced under the English Devolution Bill: a key vehicle for devolving power to local leaders. It is not clear whether the intention is to modify the existing right to bid for and buy assets of community value under the Localism Act 2011 or to create a new right.

What was missing?

Absent from the King's Speech was any mention of reform of the business tenancy security of tenure regime.

Also absent was any mention of specific policies to drive the country forward to meet its important 2030 climate goals. This will be of particular concern to investors and occupiers who for some time have been calling for policy clarity on the trajectory for energy efficiency standards, as the potential for stranded assets looms.

There was no mention of the pledged mortgage guarantee scheme or "first-dibs" policy on new developments for first time buyers.

The anticipated New Towns Bill did not make it into the King's Speech. The government will no doubt be asked to clarify whether new towns remain part of its agenda and, if so, how they will be delivered. As this has been such a central part of government plans and briefings relating to delivering 1.5 million new homes, it is predicted that new towns will remain part of its plans, possibly with a bill to follow later in the year.

Tax

While main tax announcements are normally few and far between in the King's Speech, reserved instead for the Budget or other fiscal event, the speech confirmed that measures will be brought forward to remove the exemption from VAT for private school fees and to reform the apprenticeship levy.

The King also confirmed that the government will legislate (in a Budget Responsibility Bill) to ensure that all significant tax and spending changes are subject to an independent assessment by the Office for Budget Responsibility (OBR).

While these announcements were unsurprising, having featured in Labour's pre-election promises and some in its manifesto, it was interesting that almost the first announcement made in the speech was about the OBR, with the King emphasising that stability will be the cornerstone of the government's economic policy. This echoes the prime minister's election promises and delivers the manifesto commitment to introduce a "fiscal lock" to prevent a repeat of the turmoil caused by Kwasi Kwarteng's emergency fiscal event in September 2022 which was delivered without an OBR forecast and included unfunded tax cuts.

The King's speech did not announce the date of the autumn budget (which is promised no earlier than 13 September as the OBR forecast takes 10 weeks to commission) but the chancellor, Rachel Reeves, has indicated that it will be announced before the summer recess at the end of July. With the political party conferences taking place in September and October, it is possible that Labour's first budget may not take place until later in the autumn when we will hear more details of the new government's tax plans.

If you would like to discuss any of the issues raised in this Insight, please speak to your usual Osborne Clarke contact, or one of the experts listed below.