With 40 different bills announced in the King’s Speech today as part of the State Opening of Parliament, there is much for wealth managers to consider. Much attention involves looking at the new Pension Schemes Bill, but there were plenty of other areas announced which have generated reaction from across the industry and further afield as follows:
Paul Diggle, chief economist at abrdn, comments on the new OBR requirement saying:
“There is certainly a sense in which a legal requirement for the OBR to assess government fiscal events is aimed directly at the short-lived Truss experiment, when the OBR was left out of the mini-Budget with disastrous consequences. It won’t make a practical difference to how the Labour government does fiscal policy, because it was always going to involve the OBR anyway. But it is part of Labour’s efforts to project fiscal and economic prudence, and keep financial markets on side. The litmus test of success for Labour will be whether they can get UK growth going again, which is going to require difficult reform of the planning system, green industrial policy, and a potentially closer relationship with the EU.
Commenting on the King’s Speech, Chris Cummings, CEO of the Investment Association, said: “We welcome the Government’s focus on securing economic stability and growth, encouraging investment, and improving people’s financial futures through wealth creation. Today’s speech offers a forward-looking plan which recognises the importance of partnership with the private sector, and the investment management industry will play an active role in achieving these aims.
“By taking into account the individual needs of investors and the role the pensions system can play in delivering growth, there is great potential to benefit both UK households and our economy. The proposed Pensions Scheme Bill will be fundamental in taking this agenda forward. The focus on implementing a Value for Money framework for Defined Contribution Schemes will place a greater emphasis on value, rather than a narrow focus on cost, leading to improved outcomes for consumers. We would encourage the government to go further to empower more individuals to invest for their futures, by broadening access to financial advice and guidance.
“We are pleased that the Government has listened to investors and will deliver on the creation of a new empowered regulator, the Audit, Reporting and Governance Authority (ARGA), as part of the draft Audit Reform and Corporate Governance Bill. Putting ARGA on a statutory footing will provide a boost to trust, transparency and accountability in UK companies, auditors and capital markets and reinforce the UK as a trusted location for investment.
“Enshrining the National Wealth Fund in legislation is a clear signal from the government of their intent to mobilise much needed capital for green investments. The Climate Change Committee estimates that an additional £50-£60 billion of capital investment will be required every year over the next decade to deliver the UK’s net zero ambitions, and there is an urgent need to build the pipeline of investable infrastructure projects in the UK to support this. We strongly support this ambition to channel much needed capital into British businesses and infrastructure projects to cement the UK as a leader in sustainable finance.”
Juliet Phillips, Programme Lead Energy Transition, at independent climate change think tank, E3G said: “The election result has given the new Labour government a clear mandate to turn the UK into a green energy superpower. New primary powers will help Labour enact its ambitious vision, and provide support for workers, communities and local authorities.
The King’s Speech has kick-started a new legislative agenda on energy, renters’ rights and local powers – all areas that will be crucial to put the country back on track to meet climate and fuel poverty targets. It is vital that the government use new bills to support a just transition away from oil and gas, support vulnerable households to lower energy bills, and accelerate the clean power transition.”
Heather McKay, Senior Policy Advisor, E3G said:
“The last Government was infamous for its delay on green, so it is welcome to see Labour fast out the blocks by centring green growth in today’s King’s Speech. It’s welcome to hear the clear recognition of the economic opportunities that UK Net Zero promises – at home and abroad. Delivering this goal requires a plan to drive green investment fast. The industrial strategy council must centre green if it is to deliver prosperity, jobs and climate safety for Britain”
Mike Suffield, Director of Policy and Insight at global Accountancy Body, ACCA , said:
“Audit reform has been severely overdue in the UK, yet repeated delays have sidelined it, despite the importance of it in promoting the UK as a great place to do business. ACCA has long called for this implementation, so to see it included in the King’s Speech as one of the first points of the speech is a huge step forward.
“Legislation will place the planned new regulator, the Audit, Reporting and Governance Authority (ARGA), on a statutory footing and will set out clear expectations and accountability for Boards, management and auditors.
“The shift of the FRC to ARGA as a clear independent watchdog will strengthen the oversight of audit quality so that audit firms can be held properly to account, introducing changes that have been needed since the collapse of Carillion in 2018.”
Jessica Bingham, Regional Lead, Policy and Insights at ACCA said: “The devolution to give more local authorities power away from Westminster is a reflection of recent changes in the UK, such as with increased powers for regional Mayors. It recognises the importance of local people doing local work, putting budgets and resources to use in the places where they are most needed.
“However, ACCA urges caution when devolving budgets to local authorities who are not set up with proper audit and corporate governance processes. It is important to ensure that devolution is an effective handing-over of power, equipping all parties with the skills and resources they need to make it a success.
“A transition to local authority powers will empower regions and has the potential to divert more money and resource to where it’s needed most, but there needs to be a firm hand guiding the tiller of finances and a steady, measured approach to change.”
Dr Rhian-Mari Thomas, CEO of the Green Finance Institute and Chair of the National Wealth Fund Taskforce said: “Setting out the National Wealth Fund as a key priority demonstrates the Government’s determination to reshape the way we approach public, private risk-sharing, providing private investors with the confidence needed to invest in technologies and infrastructure that will drive growth and create jobs.
“Implementing the recommendations made by the Taskforce will drive investment into priority areas, accelerate the decarbonisation of our economy and position the UK for increased international investment. Yet time is of the essence. We need the Government to maintain the momentum that has characterised the work of the Taskforce to date so that capital is deployed at pace.”
