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Analysis: State Opening of Parliament

June 2017

“My government’s priority is to secure the best possible deal as the country leaves the European Union.”1 With this opening line, the agenda for a rare two-year session of Parliament begins in earnest.

The Queen’s annual opening of Parliament, where she reads the list of Bills to be introduced during that sitting period, was unsurprisingly scant on detail given the challenging political realities for the Government.

Prime Minister Theresa May called an early General Election in April to get a mandate for her Brexit plans and to increase her majority to ease the passing of difficult legislation such as the Repeal Bill. However her gamble did not pay off, leaving her in a significantly weakened position. The Queen’s Speech this year reflected this, with the more controversial and interventionist proposals from the Conservative manifesto either entirely excluded or included in watered-down form.

Having said this, there was still a significant amount of domestic legislation included, ranging from Bills on the space industry to domestic violence. As expected, there was also a strong focus on the UK’s withdrawal from the EU, with eight Brexit-related Bills announced. Businesses will welcome the fact that the Queen’s Speech contained no real surprises, however the Government has given itself sufficient latitude in the language of many of the Bills, meaning businesses will have to wait for greater clarity on much of the content.

There was little in the Speech on financial services specifically, although a Financial Guidance and Claims Bill was included, which will bring forward the plan to establish a new arms-length Single Financial Guidance Body that will replace three existing providers of publicly funded financial guidance, and will be funded through existing levies on pension schemes and the financial services industry.

This measure aims to improve the UK’s financial capability by providing a more joined-up service to help people make effective financial decisions, however the Bill does not provide any new information or more detail about how the Body will operate.

Eight Brexit bills

  1. Repeal Bill – formerly the ‘Great’ Repeal Bill, this will be the main vehicle by which the European Communities Act 1972 is repealed; however in many ways it might be more accurately called the transposing Bill – as it will transpose many of the regulations created by the EU into UK law, in order to provide a degree of certainty in transition as we leave the EU.
  2. Customs Bill – this will ensure that the UK has a standalone UK customs regime on exit, covering the import and export of goods. 
  3. Trade Bill – unable to formally negotiate with other countries until we have left the EU in March 2019, this Bill will put in place the framework to set UK trade policy.
  4. Immigration Bill – this will allow the Government ‘to control the number of people coming here from Europe while still allowing us to attract the brightest and best.’ 
  5. Fisheries Bill –the inclusion of this Bill highlights this as one key area where the UK will move on from EU regulations at the first opportunity, rather than simply relying on the transposed rules covered in the Repeal Bill.
  6. Agriculture Bill – the Government explained this would ‘provide stability to farmers as we leave the EU’.2
  7. Nuclear Safeguards Bill – transferring powers from Euratom to the UK’s Office for Nuclear Regulation.
  8. International Sanctions Bill – this will enable the UK to make its own decision on non-UN sanctions, while also retaining compliance with international law after the UK leaves the EU.

Consumer market review

As originally announced in the Autumn Statement 2016 (PDF† - 436KB - opens in a new window), the Government will publish a Green Paper on consumer markets, closely examining markets that are not working fairly for consumers. This will include looking across markets at how to help consumers being caught out by unfair terms and subscription traps, as well as ways to help consumers enforce their rights.

Markets specifically mentioned at this stage include essential markets such as telecoms, the housing market, and the energy market, but the Government have given themselves sufficient latitude to cast the net wider and to be fairly interventionist here.

However, there was no specific mention of an energy price cap, as had been announced in the Conservative manifesto, leading to Centrica – British Gas’ parent company – trading at its highest price since the price cap was revealed in April. Instead, Ministers are “considering the best way” to protect those on the poorest-value tariffs, with a suggestion that this could be done through action by the regulator or legislation. 

Digital agenda

All businesses will need to be aware of the Data Protection Bill announced in the speech. This aims to make the UK’s data protection framework suitable for the new digital age.

The new rules brought forward to replace the Data Protection Act 1998 will strengthen rights and allow individuals to have more control over their personal data, including a ‘right to be forgotten’ when individuals no longer want their data to be processed, provided that there are no legitimate grounds for retaining it.

The Government plans to implement the General Data Protection Regulation - new EU data protection rules due to come into force in May 2018, regardless of Brexit. It is hoped that this new Bill will help the UK meet its obligations while still a member of the EU and to maintain its ability to share data with other EU member states and internationally after leaving the EU. This will mean that businesses will have to comply with tougher data rules, but they will at least have greater clarity about their future obligations.

As well as the Data Protection Bill, the Government will also bring forward a Digital Charter, which will create a new framework which balances users’ and businesses’ freedom and security online.

The Charter has two core objectives: to make the UK the best place to start and run a digital business and to make it the safest place in the world to be online. While the Government’s ambition to make it easier for companies and consumers to do business online, as well as supporting digital companies, is to be welcomed, the Charter may also require businesses to do more to protect their users and improve safety online.

Infrastructure of the future

Three Bills were included to support work in attracting investment in infrastructure, and these provide an opportunity to businesses looking to take advantage of these new industries. The Automated and Electric Vehicles Bill aims to put the UK at the forefront of autonomous vehicle ownership and to ensure a world-class infrastructure by expanding compulsory motor vehicle insurance to cover the use of autonomous vehicles and by allowing the Government to require the installation of charge points for electric vehicles and require a set of common technical and operational standards.

The High Speed Rail (West Midlands – Crewe) Bill will deliver the next phase of the HS2 project, and the Space Industry Bill aims to make the UK the most attractive place in Europe for commercial spaceflight, thereby boosting the economy, British business, engineering and science. Across these three areas, new business opportunities will open up in developing and supporting the new technologies and infrastructure.

Workers’ rights

Graph showing national living wage statistic

The Speech confirms plans to increase the National Living Wage as per the recommendations of the Low Pay Commission, so that it reaches 60% of median earnings by 2020. It also confirmed the Government’s direction of travel on employment rules and rights as it aims to keep these up to date with new ways of working. Chief Executive of the Royal Society of Arts Matthew Taylor is leading an independent review of modern employment practices commissioned by the Prime Minister, and we expect this to be published shortly.

Focus on Brexit

However, all these measures mentioned are not likely to provoke great Parliamentary tensions: they are broadly uncontentious measures with cross-party support. While this is essential given the Government’s minority status, it means that much of the political battle will be focused on the Brexit measures announced.

The Repeal Bill, which is the centrepiece of the Brexit legislation and will repeal the European Communities Act 1972 and convert EU law into UK law as we leave the EU, along with seven other Bills on specific areas including Immigration, Customs, and Trade, will receive far greater parliamentary scrutiny, and will become a vehicle through which those that support a ‘softer’ Brexit in both the Commons and the Lords express their views. 

For more information on what we know so far of May’s Brexit plans, visit our Brexit page.

Before the Queen’s Speech was delivered, the Government announced that this Parliament will sit for two years instead of one, to give MPs enough time to fully consider Brexit laws. It seems likely that they will need this time.

Queen’s Speech – Next Steps

  • Following the Queen’s Speech, the House of Commons and House of Lords meet separately to debate the Government’s proposed programme of legislation.
  • In the House of Commons, MPs sit for six days of debate, with each day covering a different subject area.
  • On Thursday 29 June, the final day of the debate on the Queen’s Speech, the House votes on the motion to pass the Queen’s Speech, but there may be votes on amendments to the motion on the penultimate and final days.
  • In a majority Government scenario, the vote to pass the Queen’s Speech is normally just a formality to rubberstamp the Government’s agenda. This year, however, the vote on 29th is the first real test of Theresa May’s government.
  • Labour, who are 64 seats short of a majority in Parliament, have said they will attempt to vote down the Queen’s Speech. They also plan to table amendments intending to divide the Conservative Party. While losing the vote would be deeply damaging and embarrassing for the Government, according to the Fixed Term Parliaments Act, a defeated Queen’s Speech is no longer an official vote of no confidence, so the Government would remain in place. However in such a scenario their position would look increasingly untenable, and a formal confidence vote could well follow.

Economic outlooks and indicators
Some of the latest figures, including Barclays’ GDP growth forecast.