Queen's speech will hold little hope for squeezed Britain

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Created on Wednesday, 09 May 2012 00:00

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08 May 2012

Queen's speech will hold little hope for squeezed Britain

Government under pressure to explain how it is going to create growth in the economy during a double-dip recession.

Juliette Jowit, Alan Travis and Rupert Jones

With the UK having entered a double-dip recession, there is now enormous pressure on the government to use the Queen's speech to explain how it is going to create growth in the economy and jobs.

But there are signs that the key bills aimed at helping the economy – a wide-ranging enterprise bill including some deregulation, and a Treasury bill to reform the banking sector – would not add up to the strong growth agenda many MPs and business groups want to see.

The greatest problem for successive governments is that the economy is an area where legislation is either not needed or looks "marginal", warns Gavin Kelly, chief executive of the Resolution Foundation thinktank and a former senior Labour government advisor.

"They will be looking for ways of showing how measures in the Queen's speech will help ease the squeeze on living standards – but anything they can come up with is likely to be small beer compared with the scale of the challenge," said Kelly.

There is also the problem of tensions in the coalition, and trade-offs required. So while the enterprise bill is expected to weaken employee rights in the hope of making it easier for businesses to take the risk on hiring new workers, more "family-friendly'' legislation could in fact add to complication and costs for businesses.

"If anything, most of the bills expected will add to the regulatory burden," said John Cridland, director general of the Confederation of British Industry, the UK's largest employer organisation.

The lack of clear narrative for the legislative programme is also a reflection of the two sides of the coalition struggling to shore up opposition on the far sides of their parties, said Tim Montgomerie, editor of the unofficial Conservative Home website, which has published an "alternative Queen's speech" by up to 20 unhappy Tory MPs.

Signs of such a standoff are also seen in a number of bills which are not in the Queen's speech.

Among these, legislation to enshrine into law the commitment to spend 0.7% of GDP on aid and a bill to set the route for new high speed trains are both seen as too provocative for rightwing Tories, and a shakeup of higher education as too hard for Lib Dems already reeling from the electoral impact of higher tuition fees.

A promised social care bill is also thought to have been shelved because the changes recommended by experts would have cost too much.

"The coalition agreement was like a three-three draw: [Tories] got welfare reform, immediate cuts and schools reform; [Lib Dems] got the pupil premium, the alternative vote referendum and taking low paid people out of income tax," said Montgomerie. "Now we seem to have got to a nil-nil draw where no one's willing to do anything bold."

Key areas of legislation: Growth and jobs

The Liberal Democrat Vince Cable's Department of Business will lead a wide-ranging enterprise bill that officials insist is "pro-growth and pro-business", including competition reform, easing the enforcement of regulations and changes to employment law – including more arbitration of employment disputes and potentially ending the right of employees to claim unfair dismissal, at least for those working for the smallest companies.

Counterbalancing such deregulation are plans from Michael Gove's education and families department for a bill including more rights to ask for flexible working arrangements, and possibly also transferrable maternity leave between parents.

Another change employers hope to see is the right to have "protected conversations" with employees about retirement plans without the risk of being taken to an employment tribunal – something they want to replace the abolition of statutory retirement ages.

City

The Treasury will take the lead on a bill to introduce reforms recommended by the Vickers review of banking, in the aftermath of the 2008 financial crisis and subsequent series of bank bailouts by taxpayers. Among changes set to be adopted are the recommendation that banks must ringfence their high street operations from the "casino" style investment businesses.

Cable's enterprise bill will also be the vehicle for enacting any reforms in the wake of the row over excessive executive pay. Details are not expected until responses to the consultation on the government's ideas have been fully considered, but among the likely changes are to give shareholders powers for a binding vote to block directors' pay plans.

Crime

A new internet surveillance bill to help police and security agencies investigate terrorism and serious crime will be the main part of a wider law and order package. The law would build on an existing 2009 EU directive that requires internet service providers to keep customers' mobile phone and internet use data for 12 months.

It would not give the police the power to retain the content of any emails, tweets, or other social media use, and the most "sensitive'' data would be restricted to police, emergency services and intelligence agencies.

After fierce opposition from MPs of all parties, it is expected the legislation will promise to publish a privacy impact statement of the new powers, and the access regime will be overseen by the interception of communications commissioner.

Pensions

Plans for a flat-rate state pension initially worth about £140 a week are expected as part of a drive to make it easier for people to plan for retirement.

The government says the change, which will see the basic state pension (currently worth up to £107.45 a week) and state second pension replaced by a single scheme, will cost no more than the existing system. However, it would mean lower retirement income for some people.

Ministers hope people will add to this with further savings.

Britain's biggest pensioner organisation, the National Pensioners Convention (NPC), has pointed out someone retiring today with a 30-year contribution record would already get a combined pension of around £150 a week.

The government says for people planning to retire in the next few years, "accrued rights will be honoured" – even over £140 a week.

Details are expected in a white paper due in the next few weeks and the changes are due to come in around 2016.

Politics

Among the most controversial elements of the Queen's speech are plans to introduce elected peers to the House of Lords.

Supporters want the upper chamber of more than 800 peers and bishops replaced by a "senate" about half the current size, made up of members elected for 15 years by proportional representation.

Compromises that might be considered to persuade MPs and peers to vote for it include slowly phasing out the current life peers when they die or retire.

The bill would be among the most divisive for the two coalition parties as it is seen by the Tory right as an entirely Lib Dem project.

Among other details, both supporters and opponents will be watching carefully to see what the wording and presentation of the bill suggests about the government's determination to push the bill through – or not.

The rest

Among other bills expected is the promise by Michael Gove – himself adopted as a child – to speed up adoption and set up a national database to link up families and children all over the country.

Cable's enterprise bill is also thought to include legislation to set up the Green Investment Bank. It is not expected to have powers to borrow until at least 2015, and then only depending on how much the government's debt has been reduced. Investors and environmental groups will also want to know how ambitious its remit will be for supporting new technologies including renewable energy and energy saving schemes.

Another bill from Cable's department will establish a supermarket ombudsman with powers to name and shame, and ultimately to fine, large supermarkets which abuse their power over small suppliers including farmers.

The government has played down hopes of a consumer rights bill, consolidating the existing range of laws.

Source: The Guardian UK

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