The King's Speech
PM Starmer presented his first legislative package in the form of the King’s Speech earlier this week. Containing 40 Bills, the second highest total since 1997, it is the Labour Party’s first King’s Speech in nearly 15 years and will inform Labour’s governance plans for the next 18 to 24 months.
Our view:
Labour gave relatively little detail on how it planned to govern ahead of the election, but much of the legislation tabled was heavily trailed ahead of time
The legislation confirmed Labour’s more interventionist and less pro-business instincts
Much of the legislation will likely pass, with only minor internal rebellions
Stakeholder consultation will have a longer runway than under the Conservatives
Starmer will likely choose the most controversial Bills, such as the Great British Energy Bill, and those most likely to appeal to his MPs, such as the Passenger Railways Services (Public Ownership) Bill, to be voted on first as a way of capitalising on his honeymoon period.
Our wider view:
Labour gave relatively little detail on how it planned to govern ahead of the election, but the legislation tabled was mostly unsurprising. The King’s Speech introduced several Bills that had already been tabled under PM Rishi Sunak, such as the Tobacco and Vapes Bill, which seeks to ban smoking and regulate vaping, and others that had been heavily trailed ahead of the election, such as the legislation that will underpin Great British Energy, Labour’s vision for a state-backed energy investment and operations company. Other Bills focused on unblocking several areas of the economy that had faced strong internal and external opposition under the Conservative Party and therefore did not come to fruition, such as the Leasehold and Freehold Reform Bill, which will eventually ban leasehold-style ownership of property in the UK, and the Renters’ Rights Bill, which will tilt the scales of power more favourably towards renters.
Most of the legislation will likely pass, with only minor internal rebellions currently expected; there will be wide scope for industry and stakeholder consultation, however. Much of Labour’s internal political tension is fixated on predominantly non-legislative issues, such as the ongoing conflict in Israel/Palestine and the UK’s role in it. One of the first acts of the Starmer government was to call for an immediate ceasefire in Gaza, which he relayed to both Israeli Prime Minister Netanyahu and Palestinian Authority President Abbas, underlying the importance of this conflict for Labour’s party unity (two anticipated Cabinet member lost their seats to independent, pro-Palestine MPs at the general election, one of Labour’s few losses on the night). The main source of legislative discontent will continue to be Starmer’s maintenance of the two-child benefit cap, which limits public support for parents to more than two children. Because it is a fiscal measure, the benefit cap will likely be overturned at the Autumn Budget, currently expected for October following Labour’s party conference, which runs from 22 - 25 September. The change will likely be heavily trailed to Labour’s party conference attendees as a big victory against the previous Conservative government, likely as a softener for Starmer’s pivot to the right ahead of the Budget.
Labour has confirmed its more interventionist and less pro-business instincts. Starmer’s choice of legislation was triangulated to help ease any potential internal resistance he might face, with many of the tabled Bills created specifically to appeal to the left wing of the Labour Party i.e. Starmer’s most likely Parliamentary opponents. Many of these MPs won re-election, but did not receive government appointments, upsetting several party grandees, such as former shadow Foreign Secretary, Emily Thornberry MP. These Bills include the legislation to establish the National Wealth Fund, which will fund Starmer’s industrial strategy, and the Passenger Railways Service (Public Ownership) Bill, which will allow the government to nationalise the railways. Starmer has also paved the way to significantly shake up the labour market, with an Employment Rights Bill to overhaul employment rights looking likely to come into force. The Employment Rights Bill will beef up workers’ rights and its announcement received strong support from unions (who are Labour’s largest donors and strongly oppose other policy issues like Miliband’s current anti-North Sea policy approach), but has already prompted concern from the wider business community. However, most businesses voiced their strong opposition on LinkedIn, the preferred social platform of business, but a platform largely ignored by the political and policy world.
Looking ahead, Starmer will likely choose the most controversial Bills, such as the Great British Energy Bill, and those most likely to appeal to his MPs, such as the Railways Bill, to be voted on first as a way of capitalising on his honeymoon period and avoiding any prolonged conflict due to the summer and party conference recesses. This two-pronged approach, choosing laws that appeal to Labour MPs voting on the Bills on the one hand, while ushering through his most radical legislation on the other, will help Starmer start some of his more controversial initiatives while also maintaining party unity as he enters his first legislative term in power.