What to expect from the UK King's Speech
Published on 3rd Nov 2023
In what is likely to be the last Parliamentary session before the next general election, capacity for new measures is limited: housing and pension reforms are two areas that may receive attention
As speculation mounts about when the prime minister will decide to call an election (the last possible date for it to take place being 28 January 2025), the general opinion seems to be that the contents of the King's speech on 7 November are likely to be sparse.
In what is probably to be the government's last programme before the general election, it may want to manage expectations about what can be achieved and to retain flexibility over the election timetable. With items held over from the previous session and several previously published draft bills expected to be included, there may be limited scope for much that is new. However, housing may be an area of focus with some pension reform anticipated – and following this week's AI safety summit, there may be appetite for something to be included on that front.
The previous legislative programme
The rush to enact legislation ahead of the prorogation of Parliament last week saw royal assent being granted to several bills, including the Levelling Up and Regeneration Act, the Economic Crime and Corporate Transparency Act, the Procurement Act and the Online Safety Act.
The House of Commons library published a helpful briefing on what is likely to feature in the speech, noting the bills in the May 2022 Queen's speech that were not introduced but which may appear in the coming session. This includes the Modern Slavery Bill.
Bills "carried over" from the previous session include the Data Protection and Digital Information (No 2) Bill, the Digital Markets, Competition and Consumers Bill and the Economic Activity of Public Bodies (Overseas Matters) Bill.
The draft Media Bill and Martyn's Law
Four draft bills were published in 2022-23, including the draft Media Bill and the draft Terrorism (Protection of Premises) Bill.
The draft Media Bill, published by the government on 23 March 2023, is expected to be formally announced as part of its legislative programme in the King's Speech. For more details about its scope, and the pre-legislative scrutiny it has received, see our Insight.
Potential new areas for legislation
Subjects for legislation anticipated to be mentioned in the speech include certain criminal justice measures (including knife crime and sentencing), raising the age of sale for tobacco products, and implementing legislation to join a free trade agreement in the Asia-Pacific region (Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP).
While it had been anticipated the government would make another attempt at removing nutrient neutrality rules (after its proposed amendment to the Levelling Up and Regeneration bill was defeated in the Lords), there have been reports suggesting that plans to bring a bill on this have now been shelved.
Lease reforms are another area expected to get attention.
The UK government may be rethinking the position in its white paper on artificial intelligence (AI) not to issue new legislation on it. Commentators have suggested that the King's speech might include putting the white paper's "high level principles" for AI regulation onto a statutory footing. The approach under the white paper is for the UK's various sectoral and economic regulators to apply their existing jurisdiction and powers to deal with AI-related issues, with the high level principles shaping how they adapt current regulatory frameworks to AI.
If correct, this change may have been prompted by a House of Commons Committee report that recommended that the government should create a statutory requirement on regulators to "pay due regard" to the high level principles.
However, creating such a statutory duty should not be interpreted as a radical change: in fact, it could be said to reinforce the UK's light-touch approach to AI regulation. We have not seen any indication that UK policy is shifting towards a detailed horizontal AI regulatory regime similar to the EU's proposed AI Act.
Renters' Reform Bill
The Renters' Reform Bill (which has had its second reading) attempts to redress the balance of power with greater protections for tenants including the abolition of all fixed-term assured shorthold tenancies, instead providing that all new tenancies will be periodic. One of the key changes proposed by the bill was the abolition of "no-fault" evictions under section 21 of the Housing Act 1988, which received a large amount of media and public scrutiny. However in the government's response (published on 20 October 2023) to a report by the Levelling Up, Housing and Communities Committee earlier this year on the draft bill, it states that the abolition of section 21 will not come until force until "sufficient progress has been made to improve the courts". These proposed improvements include digitising more of the court process to make things easier and faster for parties – however such improvements have been on the agenda for a while with little progress being made.
There is likely to be a consultation on banning the collection of existing ground rents (following the introduction of the prospective only ban in 2022) within the month. It is also expected that the changes will include a phasing out of new houses (but not flats) being sold as leaseholds.
Property insurance reform
We can also expect multi-occupancy property insurance reform, following the Financial Conduct Authority's finding of unjustifiably high commission payments as high as 62% of the total premium (usually shared with owners and managing agents) and a frequently opaque process that fails to deliver value for money.
On the commercial side, business rates represent an increasingly unsustainable outgoing for many. Rates rise in line with inflation, which will see businesses paying a total of £27.74 billion – an additional £1.74 billion – from next April (according to property services group Colliers), with an already stretched retail sector shouldering much of the burden.
There have been calls for the government to step in to freeze rates in light of the current affordability pressures facing business, and, more fundamentally to revise the basis on which rates are calculated.
The British Property Federation has called on the government to extend the current period of business rates relief for empty properties from three months to 12 months to allow time to upgrade stores and re-let them to new tenants in challenging market conditions.
As there was no mention of business rates at either the Conservative or Labour Party conferences, it looks probable that this is another can to be kicked down the road. (See our Insight.)
Possible pensions measures?
Following the chancellor of the exchequer's Mansion House speech, will we see a proposal for a new pensions bill to introduce the legislative framework for defined benefit (DB) superfunds, a new common value for money framework for occupational (trust-based) and personal (contract-based) defined contribution (DC) schemes, a new duty for DC scheme trustees to offer decumulation (retirement) options which are suitable for their members, and/or the new default consolidator model needed to address the challenge of an ever increasing number of small deferred DC pension pots?
It is not long since the Pension SuperFund announced that it is withdrawing from the DB superfund market and a commitment to put legislation into place could help to inject some new life into this alternative endgame option.
The Pensions (Extension of Automatic Enrolment) Act 2023 has already received royal assent, and the Economic Activity of Public Bodies (Overseas Matters) Bill, which is relevant to the investment decisions of Local Government Pension Scheme funds, should be carried over to the next Parliamentary session.
Osborne Clarke comment
With the next Parliamentary session likely to extend until the next general election is called, there is limited scope to put complex legislation through Parliament. However there are still some significant pieces expected to be enacted before the next election.
In addition, the chancellor's autumn statement containing the government's plans for tax and public spending is to be made on 22 November, alongside the latest outlook for the economy and public finances from the Office for Budget Responsibility.