Legislation Breakdown (1)
The key Government Bills that will shape the debate on Economics & Finance this autumn
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This is the second of our intro briefings this week, before Parliament returns on Monday. You can read more about this project here.
Starting next week, I will be posting a regular overview of the week ahead every Monday, a Foreign Affairs & Defence newsletter every Thursday, and an Economics & Finance newsletter every Friday.
Following yesterday’s overview of the Government’s legislative programme, this newsletter breaks down key Government Bills relating to Economics & Finance that will be debated in the coming weeks in Parliament. Tomorrow we will look at the key pieces of legislation in Foreign Affairs & Defence.
Economics & Finance
1. Financial Services and Markets Bill
The impetus behind this Bill came not from Nadim Zahawi – who introduced it in July and will soon be out of a job – but Rishi Sunak, who outlined his plans for the future of financial services in his Mansion House speech just before resigning as Chancellor, triggering the collapse of Boris Johnson’s premiership.
This long-anticipated piece of post-Brexit legislation,
“revokes retained EU law relating to financial services and enables HM Treasury and the financial services regulators to replace it with legislation designed specifically for UK markets... to ensure a greater focus on long-term growth and international competitiveness.”
Pressure to maintain that competitiveness was building this weekend, as Michael Findlay, chairman of the London Stock Exchange, wrote to the Financial Conduct Authority, warning that the Government face a “once-in-a-generation opportunity to implement radical reforms”, in order to maintain the City’s competitiveness. This follows claims that Liz Truss may seek to merge the financial regulators into a new body, if she becomes Prime Minister.
The Bill will be heavily scrutinised not only for its impact on financial institutions and regulators, but for its proposed regulatory framework for cryptoassets. This is part of Government ambitions “to make the UK a global hub for cryptoasset technology”. However, the focus on stablecoins based on a consultation concluded in April was immediately put out of date by the TerraUSD stablecoin meltdown in May.
The Bill will be debated on Second Reading next Wednesday, after a Westminster Hall debate that morning on the “Government’s regulatory approach to crypto-assets and currencies”.
2. Levelling-up and Regeneration Bill
This Bill, one of Boris Johnson’s flagship policies, was introduced in May by Michael Gove, who has now resigned as Secretary of State for Levelling Up, Housing and Communities.
The Bill sets out the Government’s targets for improving living standards, infrastructure, education and health in deprived regions of the country, by introducing “combined county authorities”, new powers for local authorities and changes to planning laws. The Bill compels the Government to report on progress in these areas.
Less commonly noted is the vague provision in clause 187, which, according to the charity Crisis, would criminalise begging. It allows for the Secretary of State to make regulations similar to “the Vagrancy Act 1824 (offences relating to begging), or (b) section 4 of that Act (persons committing certain offences deemed to be rogues and vagabonds), disregarding the repeal of that Act by the Police, Crime, Sentencing and Courts Act 2022.”
MPs will continue to scrutinise the Bill in Committee starting next Tuesday.
This Bill, which began in the House of Lords and is currently in Committee stage there, is another piece of post-Brexit legislation, reforming and consolidating regulation of Government procurement in one place.
The Government claim that these reforms will “shake up our outdated procurement system, so that every pound goes further for our communities and public services... place value for money, public benefit, transparency and integrity at the heart of our procurement system... modernise and unify our systems and processes... and they will get tough on the poor performers and fraudsters.”
No doubt, some MPs will be sceptical. Around £300 billion of public money is spent on procurement every year, and given the controversies over PPE provision and NHS data deals with Palantir, there should be a lot of attention on this one.
4. Trade (Australia and New Zealand) Bill
Another post-Brexit Bill, this enables the implementation of the UK’s Free Trade Agreements with Australia and New Zealand, which the Government have trumpeted as the “first independently negotiated UK Free Trade Agreements in more than 50 years.”
The Bill specifically relates to changing procurement laws and is necessary for ratifying the treaties. According to the Government press release:
“this Bill will change our rules on procurement which in turn will widen access for UK suppliers to procurement opportunities in Australia and New Zealand. The changes are needed to give Australian and Kiwi suppliers rights to access the benefits of the Agreements.”
MPs will have their first chance to debate this Bill on Second Reading scheduled for next Tuesday.
5. UK Infrastructure Bank Bill
This Bill gives a statutory grounding to the UK Infrastructure Bank, which has been up and running since June 2021. The UKIB describes itself as “the new, government-owned policy bank... providing £22bn of infrastructure finance and partnering with the private sector and local government to finance a green industrial revolution and drive growth across the country”.
As BBC Newsnight economics editor Ben Chu noted last year, this sounds pretty similar to the National Investment Bank proposed by Labour under Jeremy Corbyn in 2019. It is also considered a post-Brexit replacement of the European Investment Bank.
The Bill also provides provisions for the Government to give a “strategic steer“ to the UKIB, for instance to focus on energy production in the current climate. But this will be controversial for those who want to ensure proper independent oversight of the UKIB’s work, as well as those who want the Government to go further with a full industrial strategy.
The date for Second Reading in the Commons is yet to be announced.
6. Social Security (Special Rules for End of Life) Bill
This Bill also originated in the House of Lords and is now with the Commons. It fast-tracks access to benefits for people nearing the end of their life, changing the period of eligibility from 6 months to 12 months.
While this is largely uncontroversial, given our ageing population, and the economic crisis potentially making more people reliant on benefits, increases in the weight on the welfare system, which may show signs of cracking if inflation and recession set in for the medium term, are sure to be politically contested in the rest of this Session by MPs on both sides of the debate.
Small adjustments like this may have to give way for bigger reforms to state funding for the elderly and their care, perhaps similar to those which derailed Theresa May in 2017, especially as failure to reform social care continues to put extra pressure on a struggling NHS.
This Bill was introduced in July in the House of Lords, where it is currently in Committee stage. Currently, only some seafarers are eligible for the National Minimum Wage. This legislation provides for a National Minimum Wage equivalent for workers on certain vessels while in UK waters. Harbour authorities will be able to impose surcharges or even deny access to vessels which fail to comply.
This legislation follows the controversy in March over P&O Ferries decision to fire 800 workers without notice. The Bill closes the loophole regarding pay exploited by P&O CEO Peter Hebblethwaite, who admitted to MPs that he broke the law by not consulting the trade unions.
However, the tone in relationship between the Government and the trade unions, particularly the RMT, has soured since Grant Shapps’ 9-point plan to defend seafarers was published in March. The Opposition could, therefore, exploit the passage of an otherwise uncontroversial Bill when it comes to the Commons, in order to attack the Government’s current position vis-a-vis rail workers amid the worsening economic situation and calls from the two biggest unions, Unite and Unison, for co-ordinated action this autumn.
