Wednesday (17 July) will see prime minister Sir Keir Starmer’s new Labour government set out its programme for the new Parliament, with more than 35 bills ready according to the government.
Going for growth
The Labour manifesto’s focus on economic growth is likely to yield a similar focus in the King’s Speech. Starmer stated yesterday that “there is no time to waste” in instituting reforms aimed at boosting UK growth:
“From energy, to planning, to unbreakable fiscal rules, my government is serious about delivering the stability that is going to turbo charge growth that will create wealth in every corner of the UK.”
What form that growth drive will take is being kept under wraps, but is likely to feature a more clearly codified government industrial strategy.
Investment and trade
Chancellor Rachel Reeves’ has confirmed the establishment of the £7bn National Wealth Fund detailed in the manifesto, which the government says will “drive investment into the UK”, while there is also a promise on “a new mission control tasked with turbocharging [the] UK to clean power by 2030”.
In its manifesto, Labour said it would “take a sectoral approach” to industrial strategy, adding that “trade policy will also be aligned with our industrial strategy priorities”. It also set out plans for £1.8bn in fresh investment to “upgrade ports and build supply chains across the UK”, as well as billions in investment for the automotive, steel and green hydrogen sectors.
Spending rules
The government has also said that it will offer a bill implementing rules intended to control spending by strengthening the Office for Budget Responsibility (OBR).
These rules will be “designed to ensure economic growth, while avoiding the chaos which left families with spiralling bills and wreaked misery on people's lives”, it has said, in reference to the market panic associated with the ‘mini-Budget’ proposed under former prime minister Liz Truss.
It has argued this will prevent future governments from “play[ing] fast and loose with the public finances ever again”. In the future, it added, “significant fiscal announcements must be properly scrutinised”.
Housing
The package of bills will also aim to accelerate construction of housing, following a pledge in the manifesto to “get Britain building again” with a promise of 1.5 million new homes over the course of the next Parliament.
Last week, Reeves reinstituted mandatory housebuilding targets after their scrapping by the previous Conservative government. She framed this as a key pillar of the government’s drive towards economic growth:
"The question is not whether we want growth, but how strong is our resolve? How prepared are we to make the hard choices and face down the vested interests?"
In practice, Reeves outlined, that will mean national decision-making on planning decisions in major infrastructure projects to prevent long-term hold-ups on their construction, as well as more general reform of planning laws to ease housebuilding.
Trade questions
What remains to be seen is the level of focus on trade from the government. In its manifesto, Labour said being open to trade “allows our firms to grow”, but detail trailed on its priorities in the area has been short. It also stated:
“Rather than prioritising insubstantial agreements which do not bring meaningful benefits to the UK, Labour will seek targeted trade agreements aligned with our industrial strategy and economic strengths, to bring prosperity to communities across England, Scotland, Wales, and Northern Ireland.”
The party has promised to publish a new trade strategy and to use “every lever available” to give UK businesses access to international markets, while maintaining “the highest standards” in the food sector as part of any agreement.
The Chartered Institute perspective
Marco Forgione, director general of the Chartered Institute of Export & International Trade, urged the government following the general election to “prioritise placing trusted trade at the heart of their business agenda” in its bid to stimulate growth:
“Equipping businesses to trade internationally has the potential to futureproof the UK economy for generations to come.”
Other industry figures spoke following the election, including the Confederation of British Industry (CBI) CEO, Rain Newton-Smith:
“The new PM has been given a clear mandate to take the tough decisions on areas like planning reform and boosting grid capacity needed to get the economy firing on all cylinders.”
