The Government has produced a limited legislative agenda, with only a small number of Bills of note, for the next year. Some conservatives will find little to chew on in its proposals, as the Government has presented a largely technocratic set of reforms which could arguably have easily been endorsed by many governments of the last 20 years. What is this Government’s theory of prosperity? The question is yet to be answered.
The 2023 King’s Speech has happened around a year and a half after the last state opening of Parliament, when Boris Johnson was still Prime Minister. What is remarkable is how many of the Bills announced by His Majesty have been kicking around the corridors of Whitehall since the aforementioned former PM’s time.
Many Bills announced by the King are “carryovers”, that is Bills which were introduced in the previous session of Parliament and not completed, such as the Digital Markets Bill, the Data Reform Bill, and the Renters’ Reform Bill, to name a few.
A King’s Speech is a narrative exercise, a moment to define the agenda for the next year, but much in here has been repackaged from previous administrations. The ideas behind the Digital Markets Bill, for example, date back to Theresa May’s premiership, and its dirigiste recommendations make that quite clear.
New Bills, like the one announcing the advancement of the regulatory regime for automated vehicles, or the crackdown on pedicabs – scourge of Westminster Bridge and Victoria Embankment – and the measures to protect venues against terror attacks, have been trailed for many years, and their formal announcement does not suggest a Cabinet advancing new ideas, or even ideas significantly different to that which would be posed by the Opposition. The pedicabs licensing scheme is welcome, and will be beneficial to the Conservatives in London in their fight to regain Westminster Council, but it is the sort of measure better suited to a Private Member’s Bill instead of a flagship law in a King’s Speech.
The programme is not entirely without new thinking, however. Proposals launched by the Prime Minister a month ago at Conservative Party Conference have made it into the agenda – a new anti-smoking bill, railway reforms (in draft form) – and new crime and justice measures have been announced.
We should consider how much this legislative programme is going to increase British prosperity, and examine what problems it will actually solve.
A regulatory hammer
As usual, the general direction of the measures proposed is regulatory, rather than deregulatory. The tentative deregulatory reforms in the Data Bill and the Automated Vehicles Bill are likely outweighed by the massive expansion of regulatory power in the Digital Markets, Competition and Consumers Bill (DMCC), the unnecessary Football Regulator Bill, which is a solution looking for a problem in the world’s most successful football economy, and the Terrorism Bill, which will mandate burdensome counter-terrorism training on churches, village halls, and restaurants.
The policies on crime and justice are good in isolation, especially those targeted against anti-social behaviour, violent crime, and aggressive begging. But without the serious expansion of prison capacity and stronger prison sentences, these reforms may be for nought: more government by briefing and commentary, rather than serious reform. This is exposed by the Government’s interest in renting prison capacity overseas, instead of completing its policy – pledged in the 2019 manifesto – to build 10,000 new prison cells throughout this Parliament.
The Government’s housing policies suffer a similar issue. Changing regulations around the rental market and leasehold reform are little more than tinkering at the edges, without wholesale planning reform, a unicorn which looks likely to remain in out of our reach for some time. Without changing the structural problems in our housing market – too few houses and an unsustainable inflow of people into the country, especially the south-east – these regulatory changes will likely fail to solve the problems they are trying to fix, and could make them worse, particularly in the case of the renters’ reforms.
This Government is not alone, of course. The British state, and its political class, refuses to address the structural, root causes of the problems it encounters. Instead, it attempts to regulate away the symptoms. As such, almost every policy solution chosen is liable to either fail in its aims – like the sentencing reforms, or the terrorism regulations – or make things actively worse, like the increased regulations on the private rented sector, and the football regulator.
Glimmers of hope
The best measure is the one unambiguous supply-side reform, which is the liberalisation of the oil and gas licensing regime. Cheap and abundant domestic energy is the bedrock of our prosperity and economic advancement over centuries: oil and gas today, and coal before them. The most important thing the Government could do to accompany this specific Bill is to accelerate the approval of a new generation of new nuclear power plants, large and small, to ensure our energy transition goes from one source of abundant and reliable domestic energy to another and which will last for centuries to come. It is encouraging that the Bill has already been introduced to Parliament (on 8th November), and hopefully suggests that the Prime Minister will make headway with his efforts to bring some rational thinking and sense to the overall Net Zero policy.
The ratification of our accession to CPTPP trade agreement is the primary, and most obvious, piece of Brexit-related legislation. This is the culmination of an ambitious approach to global trade since leaving the EU – the idea that the UK should join the CPTPP was originally made at the Legatum Institute by Shanker Singham and Radomir Tylecote – and nurtured politically by Boris Johnson and Liz Truss. Once our agreement is ratified, it will show how Brexit will transform our economy, as new trade flows and supply chains take root. This will put the UK in a unique position, able to benefit from a tariff- and quota-free trading relationship with the EU and the CPTPP trade bloc – estimated to account for the majority of global growth between now and 2050 – simultaneously.
If the Government is to maximise the opportunities from this trade deal, it should accompany its accession with a series of mutual – or unilateral – recognition agreements around products and services in the CPTPP member states to increase competition and innovation, and sign ambitious data-sharing agreements to enhance the development of new technologies for consumers and public services. All efforts should be made diplomatically to encourage the United States to rejoin the agreement – which it devised – to complete the creation of a group of market-liberal, democratic nations across the globe.
Where’s the politics?
Despite the fractious political context, the abiding nature of the actual policies proposed is how much Establishment consensus they have behind them. It is hard to see a Labour government not advocating half of the bills in the session. Some of the most significant bills, like the DMCC Bill, the Terrorism (Protection of Premises) Bill, and the Football Regulator, have been called for repeatedly by the Opposition, and the bill on smoking and vaping will also attract support from both sides of the aisle.
The only policies which offer a bit of political bite are to be found in the Offshore Petroleum Licensing Bill, the references to implementing minimum service levels in public services to stop disruption from strike action – this will be secondary, rather than primary legislation – and Economic Activities of Public Bodies (Overseas Matters) Bill, which will prevent public authorities from boycotting Israeli businesses in procurement decisions.
The Bill to ban Israeli boycotts in public procurement may elicit some awkward squirms from the Labour Party, but the Conservative Party is in no position to present itself as strong and united in comparison. The plan to privatise Channel 4, a TV channel generally disliked by conservatives, and whose standards seem to plumb new depths every year, has been abandoned, leaving the Media Bill rather pointless. The Government now promises to “support Channel 4’s sustainability” while maintaining it in public ownership. This is not the stuff of election leaflets.
While the Data Bill, the Autonomous Vehicles Bill, and the CPTPP Bill may reignite the odd Brexit-related skirmish over deregulation vs dirigisme, or protectionism vs trade, the reality is that the legislative agenda for the final session of this Parliament is not going to set or entrench any political divisions. Even the Rail Reform Bill, which could have opened some interesting political lines on the efficiency of public services and ensuring the interests of consumers trump those of trades unions, this Bill will only be published in draft form, so it is unlikely to become law. Politics is important. It gives voters a choice, and an opportunity to pick between different worldviews and philosophies. Replacing it with Whitehall-driven consensus and stakeholder engagement serves nobody.
Where is Brexit?
Despite being the Conservative Party’s fundamental achievement of recent years, Brexit plays a minimal role in this King’s Speech, but it is not entirely absent. The following Bills make explicit use of the UK’s regulatory freedom outside the EU:
- Automated Vehicles Bill
- Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill
- Digital Markets, Competition and Consumers Bill
- Data Protection and Digital Information Bill
Three of the four bills are using Brexit as an opportunity for deregulation, innovation, and increasing trade, which are to be welcomed. The DMCC Bill, unfortunately, takes the opposite approach, and proposes significant increases in regulatory powers to the CMA, which will damage British competitiveness and will not support startups and scaleups in the UK, despite claims to the contrary. It hardly seems right for the UK to leave the European Union only to implement a stricter, less predictable, and more opaque regulatory regime for the tech sector than that of the EU.
The other three bills have plenty of strong attributes, particularly the CPTPP ratification. As mentioned above, this would not just be impossible without Brexit, it is also the result of ambitious thinking about trade policy.
If the Automated Vehicles Bill is sufficiently ambitious, the UK could enjoy a competitive advantage in driverless cars, particularly compared to the EU. While the USA is streets ahead in this field – driverless trucks have been ferrying deliveries along interstates for a few years now, and driverless taxis have become common in San Francisco – Britain has nurtured a healthy ecosystem of driverless-car startups which need regulatory reform to expand. Chief among these is Kings Cross-based startup Wayve, which has been developing its own automated vehicle technology, attracting over $200m of investment to date. While the EU is taking the risk-averse route with AI in general, it is also trying to encourage the development of driverless vehicles. So far, its approach appears less ambitious than the UK’s, particularly when it comes to liability and permitted routes. This provides the UK with an excellent opportunity to pursue a competitive advantage wherever possible, to attract greater inward investment, innovation, and benefits to British consumers. This Bill will not set the world alight on its own, but it will send an important signal about the country’s openness to innovation, if it is sufficiently ambitious.
Similarly, the Data Bill is an opportunity for innovation. By getting rid of the most egregious regulatory headaches from the EU’s GDPR regime, this Bill offers a chance for the UK to establish a much more proportionate and reasonable regime for data protection. It will also have knock-on benefits for things like the Automated Vehicles Bill, as the use of data is vital for the development of sophisticated AI. Despite making it easier for small businesses to comply with data protection requirements, which is welcome, the Bill is not as radical as it could be. This is largely down to risk aversion regarding the UK’s agreement with the EU on ‘data adequacy’ which has led to the Government believing any radical departures from GDPR would lead to the EU declaring British data collection standards unsafe, potentially killing a lot of cross-border business. This feels misguided, especially as the EU and US have agreed a data-sharing agreement, but it has informed much of the Government’s approach thus far. Many underlying concepts from GDPR remain, which is unfortunate. GDPR is widely agreed to be bad policy, but it is a bad policy that is followed by countries the world over, outside the EU.
This is not a King’s Speech for the rediscovery of prosperity. Of course, prosperity is not created by primary legislation alone, nor over the course of a single year. Many of the most important reforms to our health service – whose poor performance is undoubtedly a drag on prosperity – do not need to be legislated for, but dealt with administratively. Neither does reducing immigration from its record and unsustainable heights, or granting planning permission for much-needed homes for Britain’s young, both of which can be achieved through existing powers.
However, primary legislation, and the final session of Parliament before a General Election, is an opportunity to make a permanent stamp on the nation and enact serious, structural change which will outlast a minister’s time in office. The technocratic reforms and half-hearted policies which focus on symptoms rather than causes, and regulatory solutions not free markets, leave the UK treading water.
The country’s fundamental problems remain: poor planning and a restrictive land-use policy; expensive and constrained industrial energy supply; high and complicated taxes; and uncontrolled and un-strategic immigration. All of these contribute to poor business investment, poor use of technology and automation, poor labour mobility, and anaemic growth in productivity and GDP per head. These are the fundamentals of economic prosperity. To ignore these, and to focus on prosecuting tech companies for allegedly abusing their market power with their search engines, veers on self-indulgence and decadence.
Legatum Institute will soon embark on a new project through the British Prosperity Unit focused on the things the British Government can do today, in minimal legislative time. There are great powers at ministers’ disposal sitting dormant and unused. This must change. Politicians and policymakers should take inspiration from Winston Churchill’s daily memos to the codebreakers at Bletchley Park in 1941 entitled “Action This Day”. If we are to achieve prosperity, we must take action this day, large and small, to make it a reality.