His Majesty King Charles III has delivered the first King's Speech to Parliament in more than 70 years. Economic growth was said to be the government’s central focus, with Prime Minister Keir Starmer saying that the package of new bills would ‘take the brakes off Britain’.
King Charles said: ‘Stability will be the cornerstone of my Government’s economic policy and every decision will be consistent with its fiscal rules. It will legislate to ensure that all significant tax and spending changes are subject to an independent assessment by the Office for Budget Responsibility [Budget Responsibility Bill]. Bills will be brought forward to strengthen audit and corporate governance, alongside pension investment [Draft Audit Reform and Corporate Governance Bill, Pension Schemes Bill].’
‘Securing economic growth will be a fundamental mission. My Government will seek a new partnership with both business and working people and help the country move on from the recent cost of living challenges by prioritising wealth creation for all communities. My Ministers will establish an Industrial Strategy Council. It is my Government’s objective to see rising living standards in all nations and regions in the United Kingdom.’
Forty new Bills were announced, the first which is the Budget Responsibility Bill.
This Bill will introduce a ‘fiscal lock’ intended to:
ensure any government making significant and permanent tax and spending changes will be subject to an independent assessment by the Office for Budget Responsibility (OBR), giving it the power to produce an assessment at a time of its choosing; and
reinforce market credibility and public trust by preventing large-scale unfunded commitments that are not subject to an OBR fiscal assessment.
This government says the Bill will prevent significant uncosted measures from being announced without sufficient scrutiny to mitigate the impact on the public finances: ‘The “fiscal lock” is intended to capture and prevent those announcements that could resemble the disastrous Liz Truss “mini Budget”, announced on 23 September 2022, which would have cost £48bn per year by 2027/28, and was not subject to an OBR forecast and damaged Britain’s credibility with international lenders.’
There was no further mention of tax, other than confirmation that ministers will reform the apprenticeship levy and that measures would be introduced to remove the VAT exemption for private school fees.
Commenting on the latter, Sarah Gabbai, tax lawyer at McDermott Will & Emery, said: ‘The way I feel about the proposed VAT increase on private school fees is the same way as I feel about any other VAT increase. If the government wants to be serious about raising revenues, it needs to ensure that the tax system operates fairly and efficiently across the board, rather than merely cherry-pick specific sectors or demographics to raise taxes from simply because it is politically popular to do so. An efficient and effective tax system is bound to have a bigger impact on revenue increases than merely tinkering around the edges.’
His Majesty King Charles III has delivered the first King's Speech to Parliament in more than 70 years. Economic growth was said to be the government’s central focus, with Prime Minister Keir Starmer saying that the package of new bills would ‘take the brakes off Britain’.
King Charles said: ‘Stability will be the cornerstone of my Government’s economic policy and every decision will be consistent with its fiscal rules. It will legislate to ensure that all significant tax and spending changes are subject to an independent assessment by the Office for Budget Responsibility [Budget Responsibility Bill]. Bills will be brought forward to strengthen audit and corporate governance, alongside pension investment [Draft Audit Reform and Corporate Governance Bill, Pension Schemes Bill].’
‘Securing economic growth will be a fundamental mission. My Government will seek a new partnership with both business and working people and help the country move on from the recent cost of living challenges by prioritising wealth creation for all communities. My Ministers will establish an Industrial Strategy Council. It is my Government’s objective to see rising living standards in all nations and regions in the United Kingdom.’
Forty new Bills were announced, the first which is the Budget Responsibility Bill.
This Bill will introduce a ‘fiscal lock’ intended to:
ensure any government making significant and permanent tax and spending changes will be subject to an independent assessment by the Office for Budget Responsibility (OBR), giving it the power to produce an assessment at a time of its choosing; and
reinforce market credibility and public trust by preventing large-scale unfunded commitments that are not subject to an OBR fiscal assessment.
This government says the Bill will prevent significant uncosted measures from being announced without sufficient scrutiny to mitigate the impact on the public finances: ‘The “fiscal lock” is intended to capture and prevent those announcements that could resemble the disastrous Liz Truss “mini Budget”, announced on 23 September 2022, which would have cost £48bn per year by 2027/28, and was not subject to an OBR forecast and damaged Britain’s credibility with international lenders.’
There was no further mention of tax, other than confirmation that ministers will reform the apprenticeship levy and that measures would be introduced to remove the VAT exemption for private school fees.
Commenting on the latter, Sarah Gabbai, tax lawyer at McDermott Will & Emery, said: ‘The way I feel about the proposed VAT increase on private school fees is the same way as I feel about any other VAT increase. If the government wants to be serious about raising revenues, it needs to ensure that the tax system operates fairly and efficiently across the board, rather than merely cherry-pick specific sectors or demographics to raise taxes from simply because it is politically popular to do so. An efficient and effective tax system is bound to have a bigger impact on revenue increases than merely tinkering around the edges.’
