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Six things we learned from the 2024 King’s Speech

The first Labour King’s Speech in 14 years set out Labour’s priorities for government. Here’s what IfG experts learned from a big day in parliament.

King Charles III, wearing the Imperial State Crown and the Robe of State, reads the King's Speech, beside Queen Camilla.

The King’s Speech gives us the clearest picture yet of this government’s priorities: 40 bills focusing on housebuilding, fiscal responsibility, growth, devolution and more. The first King’s Speech of a new government is a significant moment – an opportunity for a new government to signal intent and take steps towards delivery and change

The creation of a “fiscal lock” is a welcome move

The King’s Speech confirmed Labour’s manifesto pledge to create a ‘fiscal lock’, empowering the Office for Budget Responsibility to produce a public assessment of substantial fiscal policy announcements even if the chancellor does not request one. This is a welcome move: it will make it much harder for any future chancellor to repeat what Kwasi Kwarteng did with his ‘mini budget’: announcing major fiscal changes without getting an OBR assessment of their impacts.

Exactly how this works will depend on the detail, which we expect to see in draft legislation soon. As we set out in a recent paper, the government will need to address what policy announcements the fiscal lock applies to. It should apply if the absolute (not only the net) size of measures being announced is sufficiently large in any one year or cumulatively over time, and a threshold will need to be chosen for what counts as being within the scope of this lock: this needs to be set lower than the magnitude of the ‘mini budget’ (which, at 1.7% of GDP, was clearly large enough to spook the markets) but not so low as to create an unmanageable burden on the OBR and an unnecessary hindrance to small policy announcements.

Rachel Reeves
Chancellor Rachel Reeves. A 'fiscal lock' will make it much harder for any future chancellor to announce major fiscal changes without getting an OBR assessment of their impacts.

The government will also need to set out when the fiscal lock can be disapplied. There will be circumstances, like the recent pandemic, in which the government needs to take temporary, emergency action quickly. The fiscal lock legislation must provide the government with sufficient flexibility to respond in emergencies.

GB Energy is underway – and other new legislation will also support the clean power mission

The government announced legislation for the two new bodies it wants to see speed up the clean power transition – Great British Energy and the National Wealth Fund. As previously announced, it will align the UK Infrastructure Bank (UKIB) and the British Business Bank under the National Wealth Fund and make early investments through the UKIB – a sensible move to get things moving quickly, minimise complexity and use the expertise those institutions have built up. The legislation clarified that the company will not merely serve as an investment vehicle. Instead, it will “own, manage, and operate clean power projects,” similar to other state energy firms mentioned by Labour.

Labour leader Sir Keir Starmer being asked questions as he talks to workers during a visit to Hinkley Point nuclear power station in Somerset.

Other announcements may end up being more significant to achieving Labour’s clean power mission. The Crown Estate Bill will give the Crown Estate, which controls most of the UK seabed, more freedom to borrow, allowing it to invest in offshore wind, one of the key pillars of the government’s clean power plan. There are also plans to simplify the planning process for major infrastructure projects, increasing planning capacity and accelerating grid upgrades. Average waits for planning consent for nationally significant infrastructure had increased to over four years by 2023 – so the big question here is whether these reforms will do enough to facilitate the pace of infrastructure delivery needed to achieve Labour’s clean power mission.

Clean power by 2030

How could a Labour government achieve its mission for power sector decarbonisation?

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The front cover of the IfG's report on clean power by 2030.

The King’s Speech introduces welcome planning legislation

The King’s Speech confirms the government’s commitment to introduce laws on planning reform to tackle some of the critical blockers to building. New compulsory purchase compensation rules will make it easier to assemble appropriate sites for development, and will be a key tool for the government to ensure new developments come with the affordable housing and infrastructure that local areas need – both a government objective in its own right, and important for making the case to local areas that they can share in the benefits of new development. The intention to boost planning capacity and streamline the delivery process for critical infrastructure is also welcome, to help address the delays that have become a typical feature of the planning system. And plans for Skills England to work with the Migration Advisory Committee to meet skills needs will be important for ensuring the country has access to enough skilled construction labour to build the 1.5 million houses the government has promised (as well as the other infrastructure projects the government wants to see progress more rapidly).

Labour leader Sir Keir Starmer and deputy leader Angela Rayner during a visit to a housing development in the Nightingale Quarter of Derby.
Keir Starmer and Angela Rayner during a visit to a housing development in the Nightingale Quarter of Derby. The King’s Speech confirms the government’s commitment to introduce laws on planning reform to tackle some of the critical blockers to building.

The speech also confirmed that the government will give local leaders – including Combined Authorities – new powers to design and implement strategic spatial plans for their area. Better strategic planning is important to help the government achieve the outcomes it wants from development. Combined authorities are well-placed to make housing plans that align with local economic, transport and infrastructure strategies, and make strategic choices about where development should go. The government will need to make clear the division of responsibilities between CAs and local planning authorities. Past planning reforms that have reduced local control have run into parliamentary opposition – Labour’s majority and mandate may means these changes reach the statute book much as proposed.

The government also committed to using development to fund nature recovery, promising to only pass legislation that it could guarantee will deliver “positive environmental outcomes”. This could be politically sensible, but finding a balanced solution that meets both the government’s building priorities and its environmental commitments won’t be simple.

There is no legislation (yet) for an Industrial Strategy Council – which looks like a smart approach

Labour has long promised to recreate an Industrial Strategy Council (ISC) and place it on a statutory footing, arguing that this would provide certainty to an economy often discombobulated by chaotic changes in policy. 4 Labour Party, Prosperity through Partnership: Labour's industrial strategy, 2022, https://labour.org.uk/wp-content/uploads/2022/09/Industrial-Strategy.pdf  The model to be emulated was the Office for Budget Responsibility or the Climate Change Committee, both underpinned by statute and therefore able to withstand the winds of political change.

An ISC appeared in the King’s Speech, but unaccompanied by any legislation. It is possible to interpret this negatively: that by failing to immediately put the ISC on a statutory footing it will be harder for the council to apply withering scrutiny to the government’s and officials’ recommendations and actions. A truly independent ISC, with its own resources, ability to issue policy recommendations and investigate whatever it saw fit, might have sharply curtailed the opportunities for political opportunism or flakiness that business finds so unnerving.

Construction workers
An Industrial Strategy Council appeared in the King’s Speech, but unaccompanied by any legislation. 

However, there are more benign interpretations. If Labour intends the ISC to have actual powers that constrain future governments, these need to be thought through. The list of bills ahead is already full. And while institutions like the ISC are important for industrial strategy credibility, actual action in the form of policy delivery matters more. Moving ahead with Great British Energy and the National Wealth Fund is a good sign. There is time to give the ISC a more solid footing, and no harm if it has a less formal existence while it works out exactly what it is intended to do. It can do this in parallel, while the Department for Business and Trade starts fleshing out what the Industrial Strategy is going to be all about. That is not a bad order in which to do things.

The government seems to be opening the way to more voluntary alignment with EU rules on goods

Mentioned in neither the King’s Speech, nor the prime minister’s foreword to the explanatory notes on the speech, there is an interesting straw in the wind of the government’s approach to regulation, the EU and Northern Ireland in the boringly named “Product Safety and Metrology Bill”. This seems to be a proposal for the government to give itself powers to update product legislation to take account of future developments (including the inevitable mention of AI) presumably through secondary legislation. But it also continues an intriguing reference to the possibility of using these powers to ensure “that the law can be updated to recognise new or updated EU product regulations, including the CE marking, where appropriate to prevent additional costs for businesses and provide regulatory stability. This legislation will also ensure the UK can end recognition of EU product regulations, where it is in the best interests of UK businesses and consumers.”

The government already has some powers – in the Retained EU Law Act – to stop inherited EU law applying unless it has been enacted through primary legislation. The real innovation here is in the government allowing itself a mechanism to align with EU law where it wants. Many businesses will welcome the possibility of more “voluntary alignment” in reducing compliance costs (though not necessarily improving access to the Single Market). This also gives the government an easier route to reduce frictions between Great Britain and Northern Ireland by mirroring changes the Windsor Framework may require Northern Ireland to implement (though may raise UK internal market concerns in Scotland and Wales).  

This is the sort of power the last government would neither have wanted nor been prepared to put on the statute book. But it may be an early sign of the approach the government is proposing to take both to de-dramatise the continuing impact of Brexit in Northern Ireland but also its wider strategy to start reducing trade frictions with the EU.

Devolution is moving in the right direction

The English Devolution Bill is another positive sign that Labour views further empowerment of metro mayors and other local leaders as key to the achievement of its growth mission. The bill builds upon the last government’s devolution reforms, but goes further in four important ways.

Prime Minister Keir Starmer hosts the first roundtable with regional UK mayors, at Downing Street.
Prime minister Keir Starmer hosts the first roundtable with regional UK mayors, at Downing Street, including mayor of Cambridgeshire and Peterborough Nik Johnson, mayor of Greater Manchester Andy Burnham and mayor of West Yorkshire Tracy Brabin.

First, it will place into law for the first time the devolution framework that sets out which powers are on the table. This should provide improved transparency and consistency to the process, giving local leaders and other stakeholders clarity about what is on offer.

Second, it will expand the framework to include other drivers of growth, specifically employment support and strategic planning powers, allowing alignment with other devolved functions such as transport and skills. This is very welcome, and something the Institute has recommended as a key enabler of growth. The government could be even more ambitious in future, devolving apprenticeship and R&D budgets and exploring options for tax devolution too.

Third, there is a commitment to make devolution “the default setting”, giving local leaders the right to request the devolution of functions in the framework, and placing an obligation on the government either to agree or to publicly explain why not. As the Institute has argued, such a reform will ensure that future devolution bids do not disappear into a Whitehall black hole, as has happened in the past. 

Fourth, the bill will reform governance arrangements to make it easier for mayors and combined authorities to make progress with strategic objectives such as spatial plans. This reform could be crucial to Labour achieving its house-building and infrastructure investment objectives, but the government will have to work hard to keep local government on-side for this part of the package. 
In sum, this is a bill that promises to move devolution forward, it promises to include measures that will further transform the devolution landscape. Of course there will be challenges ahead, including agreeing with local leaders about exactly how to use devolved powers in pursuit of growth. But it's a clear and positive signal of intent.

How the next government should complete the job of English devolution

The government must extend devolution to 85% of England to deliver meaningful and balanced economic growth.

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The front cover of the IfG's report on a new deal for England.

Watch our expert analysis of what we learned from the King's Speech

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