The State Opening of Parliament took place today with Prince Charles setting out the Government’s legislative agenda for the next session of parliament. The Prince delivered the speech for the first time ever, after the Queen was forced to pull out due to mobility issues.
This may be the last major legislating session before the next General Election. The final session is anticipated to begin next May, but it will be vulnerable to early curtailment due to the election. The Government can still introduce legislation not included in the Queen’s Speech should it be viewed as necessary.
The Queen’s Speech provided the Prime Minister with an opportunity to reset his political agenda and rally Conservative MPs behind him. By timing the Queen’s Speech immediately after the local elections, the Government has the chance to refocus media and public attention away from tricky mid-term election results. The Queen’s speech is also a major early test for the recently overhauled political and media operation in No.10.
Five days of debate in the Commons and Lords will now follow. The Government typically introduces some of the bills featured in the Queen’s Speech the next day. The debates will include the first hints of parliamentarians’ views on the Financial Services and Markets Bill (further details below) which will be crucial to our industry.
The Headlines
Today’s announcements follow on from a Spring Statement perceived as underwhelming, difficult local election results and economic projections which suggest a recession coupled with inflation surpassing 10% is fast approaching. The Prime Minister listed “growing the economy, safer streets and supporting the NHS to clear the COVID-19 backlogs” as his Government’s top priorities in his written introduction.
Unsurprisingly doing more to support the public through the cost of living of crisis was at the heart of the Queen’s Speech and has been adopted as part of the Government’s central “levelling up” agenda. Further support will undoubtably follow in the Autumn Budget as the Government looks to re-establish its previously long held poll lead over Labour on economic competence. Labour have responded by labelling the Conservatives as the party of low economic growth, high inflation, and high taxes.
None of the bills outlined by the government directly addresses the cost of living issue, but the Prime Minister said the wider economic reforms would help households. The IA is aware the Government is increasingly looking for help from business to support consumers through the cost of living crisis. There is rising interest from Government in the stewardship role played by investment managers. This relates to the support provided to businesses as they navigate challenging economic times by keeping them focused on the long-term health of their companies and the communities they live alongside.
Brexit also played a prominent role in the Queen’s Speech with no less than seven bills included to help deliver the benefits of it. This suggests the Government still believes the Brexit positions previously taken by Keir Starmer may be a key political dividing line at the next election. There was also a challenge issued to the EU, through the pledge to “support” the Good Friday Agreement. This leaves the door open for the Government to use legislation to dis-apply parts of the Northern Ireland protocol and suggests the difficult negotiations are set to continue.
Investment Management
Of central importance to the investment management industry is the formal announcement of the much anticipated Financial Services and Markets Bill. This legislation will set the regulatory framework for years to come. The Economic Secretary has stated that getting this legislation through Parliament will be his primary focus for 2022 and we expect to see the Bill introduced to Parliament shortly.
It is crucial the Financial Services and Markets Bill is compatible with the need for the UK to provide an open and internationally competitive market in financial services, with regulators held accountable, whilst working alongside major regulatory initiatives such as the impending Consumer Duty. The IA has been engaging with government and regulators in detail ahead of the Bill’s introduction, and we will now be focusing our attention on parliamentarians.
Connected to the setting of the future regulatory framework is the Brexit Freedoms Bill which will remove the supremacy of retained EU law. This will permit retained EU law to be amended, repealed or replaced with UK legislation more rapidly. It will also clarify the status of retained EU law in UK domestic law to reflect the fact that much of it became law without going through full democratic scrutiny in the UK Parliament.
In response to the invasion of Ukraine, the Economic Crime and Corporate Transparency Bill is taking further action to help the UK more effectively tackle money laundering. The forthcoming legislation will enable businesses in the financial sector to share information more effectively to prevent and detect economic crime. It will also boost the powers of Companies House and speed up the seizure and recovery crypto assets.
Though it was disappointing to see the long-awaited Audit Reform Bill only promised in draft form it is naturally better than it not making it into the Queen’s Speech at all. Draft bills are typically issued for consultation before later being formally introduced to Parliament. For example, the Online Safety Bill was included in the previous Queen’s Speech in draft form but it was still (just about) introduced in the same parliamentary session. Given the higher volume of bills in this Queen’s Speech it is likely we will have to wait until the next parliamentary session (expected to begin in May next year) for its formal introduction.
Bills of interest
After months of work across Whitehall and beyond, some 30 new bills, 5 draft bills and 3 carryover bills were included in the Queen’s Speech and maybe viewed by clicking here. The following Bills picked out below are likely to be of most interest to IA members:
Financial Services and Markets Bill (HMT) – page 55
Brexit Freedoms Bill (Cabinet Office) – page 51
Economic Crime and Corporate Transparency Bill (Home Office) – page 81
Energy Security Bill (BEIS) – page 32
Modern Slavery Bill (Home Office) – page 83
Boycotts, Divestment and Sanctions Bill (DLUHC) – page 133
Data Reform Bill (DCMS) – page 57
UK Infrastructure Bank Bill (HMT) – page 37
Trade (Australia and New Zealand) Bill (DIT) – page 59
Draft Audit Reform Bill (BEIS) – page 49
The Online Safety Bill has also been carried over to the new session of Parliament and will continue its journey through the Commons and the Lords.