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The King’s Speech: Laying the foundations of national renewal

The King’s Speech is a chance for the government to lay out its priorities for the parliamentary session ahead. But for the new Labour administration, yesterday’s Speech was more an exercise of adding meat to the bone.

Labour has set out its five long-term missions. It knows its destination. Its chief concern now lies with the delivery challenge facing it.

A new settlement for English local and regional government, legislation establishing the vital institutional architecture needed for national renewal, and a bill designed to better leverage pension capital to boost investment; the foundations for delivering the government’s ambitious missions are being laid.

But, as is always the case with legislation, the devil is in the detail. Read on for a bill-by-bill rundown from the FGF team on the legislation affecting how government works. 

Putting the architecture in place for economic growth: Budget Responsibility Bill, Pension Schemes Bill and the National Wealth Fund Bill

The King’s Speech emphasises the new government’s overriding economic growth mission – to “take the brakes off Britain” – with over a third of all proposed legislation grouped under the heading of economic stability and growth.

First up is a new Budget Responsibility Bill, which in truth is more political theatre than legislative necessity. The Chancellor doesn’t need a law compelling her to commission an Office for Budget Responsibility assessment ahead of any major fiscal event, but she does want to remind voters that her predecessor Kwasi Kwarteng chose not to do this for his disastrous 2022 ‘mini-Budget’ and that the country paid the price.

More important than the Bill’s content is the signal that it sends and whether it is then followed up on: that this government intends to pick an economic and fiscal strategy and stick to it, and to establish a more stable environment in which long-term investment decisions can be made.

The new government’s mission to raise the headline rate of economic growth will require an increase in both public and private investment, and the King’s Speech seeks to put in place the building blocks for both.

The Pension Schemes Bill implements much of what FGF recommended in Rebuilding the Nation 02 , consolidating our fragmented pensions market so as to unlock investment in UK assets and deliver for savers at the same time.

Meanwhile, the National Wealth Fund (NWF) Bill will align the UK Infrastructure Bank and British Business Bank – bringing coherence and strategic direction to the public finance institutions landscape – under a new £7.3bn public investment vehicle. The NWF will invest directly in projects across the country, de-risking them so as to leverage in additional private money.

The long-term outlook of institutions like the NWF make them an important feature of mission-driven government, as we argued in Mission Critical 01 with the UCL Institute for Innovation and Public Purpose. The key is to ensure its mandate is aligned with the government’s overall missions and that the returns to its investments are managed effectively to deliver the broadest possible gains for the nation as a whole.

Taken together these bills are an important first step on the road to Labour’s much-vaunted “decade of national renewal”, and a welcome indication that the new government wants to make good on its campaign promises to govern differently. But just as important as changes to the machinery of the state will be changes to its culture.

The spirit of mission-driven government cannot be willed into being by legislation but needs to be embedded in Whitehall’s DNA, and nowhere is this more important than the Treasury as we set out in 100 Four 100 earlier this month. The next major tests of this government’s commitment to doing things differently will be this autumn’s Budget and then the eventual Spending Reviews, when we will see if it is prepared to put its money where its mouth is.

Adam Terry, Deputy Director

The English Devolution Bill will bring shape to the recent announcements from the Deputy Prime Minister – in short, making it easier to build and empower the institutions of devolution so that Mayors and local leaders can deliver on the promise of their places and economies. The narrative suggests that this is about both broadening and deepening devolution, with a reasonably strong hint that spatial planning will be part of that depth.

The shift from deal-making to ‘devolve by default’ is important. People assume, understandably, that negotiating a devolution deal is as it sounds – two parties working out their objectives, trade-offs, and red lines. The reality has been that each government department has separate conversations with the combined authority, with no interdependence between those conversations and no repercussions for departments which show indifference or active hostility. Local priorities which the government does not share have made it into deals but are not resourced and couched in non-committal language. The pretence is comforting, but ultimately a waste of time.

Moving away from deal-making is therefore important for establishing a base layer of trust that is so important to the shifts in power that will unlock potential in places – but whether that gives local and combined authorities a stronger hand in pushing for more ambitious devolution that sits outside of the designs of government will remain to be seen. It could just be that the pretence that this is negotiation will be removed (not a bad thing). The Council of Nations and Regions could be an important space for working through these tensions, but it is too early to say whether it will serve that purpose.

By comparison, The House of Lords (Hereditary Peers) Bill contains less intriguing ambiguity, and its tight focus is perhaps reflective of how large a political and capacity challenge it would be to embark on the more ambitious reforms proposed by the Gordon Brown Commission. It does, however, remove a significant barrier to raising standards in the House of Lords, as well as accomplishing a helpful political objective for the Labour government by removing an otherwise fixed cohort of non-Labour peers. 

Claire Spencer, Head of Policy and Programmes

Inclusion is an important enabler of mission-driven government and so it was heartening to see in the first lines of the speech “fairness and opportunities for all” described as base principles underpinning the new Labour government’s mission-driven approach.

But – and not least in this area – deeds will matter as much as words.

It was positive to see the proposed legislation on race equality listed among the 40 bills set out in yesterday’s King’s Speech not least because it was one of the few commitments on this issue which was under-discussed both in the run up to the election and during the campaign itself. No doubt following the result, Labour will want to understand changes in voting behaviour among minority ethnic groups in the last election which is certainly worthy of analysis. 

Labour first announced a commitment to a race equality bill in February to mark Race Equality Week. However, less has been said about what else it will contain beyond a broadly technical harmonisation of provisions on equal pay and the extension of pay gap reporting requirements  on employers. While not un-useful, how this helps to wrestle with the structural inequalities which result in significant racial disparities in outcomes across every aspect of public policy is less clear. 

If the legislation is designed as much to signal the government’s commitment to tackling inequality, then its decision not to appoint a dedicated Secretary of State for Women and Equalities as promised is not a strong start. Leadership on tackling some of society’s most intractable challenges is certainly not a part-time job. 

Hamida Ali, Head of Policy and Programmes

There are encouraging signals that the new government is structuring its thinking around the missions framework. The second line of the speech commits to ‘uniting the country in a shared mission of national renewal’, and the wider documentation is loosely structured around the missions. 

We warned in Mission Critical 01 that Labour should guard against ‘mission-washing.’ There is critical government activity that will sit outside of missions, and shoehorning everything into missions will only weaken them. To prevent this, Labour needs a crisper articulation of each mission which really clarifies what is most important to each of them. To get there Labour could also use and adapt the existing provision of the Levelling Up and Regeneration Act 2023 to establish and embed a set of missions, with annual reporting on progress. Without, mission-washing will continue to be a risk.

Legislation is critical, but it’s not necessarily the hardest bit to get right. The real test will be whether missions are baked into the wiring of the budget and first comprehensive spending review. And Labour will need to crack many complex barriers across government, such as civil service reform, local government financing and meaningful relationships with business and civil society. It is good to see a duty of candour for public servants laid out in the Hillsborough Law, but a broader range of civil service reforms are critical to be able to deliver, including recruitment and reward based on mission-aligned competencies, and refreshed Civil Service Code, Competency Framework and Success Profiles. Missions require an open culture of testing, failing and learning, and civil servants must be able and encouraged to speak up when they think something isn’t working, or actively causing harm. 

Broader civil service reform will be required in time, and ultimately might require legislation in a future session. But first, a period of reflection on past successes and failures on this agenda is appropriate, before launching a mission-driven version of civil service reform. 

Nick Kimber, FGF Policy Associate

Grace Wyld, Head of Policy and Programmes

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