What does the Queen’s Speech mean for finances?
The monarch may not be a political figure (in the UK at least), but the monarch’s speech at the annual opening of parliament is very much a political event, especially at times when general elections are looming and while the UK isn’t technically scheduled to have one for a few years yet, politicians right now seem to be in permanent campaign mode or, at the very least, campaign ready. While there were various topics on the agenda, it probably came as a surprise to nobody that financial issues were high on the list.
Plans to safeguard the City
In terms of media headlines, one of the biggest pieces of news in the Queen’s speech was that Parliament intends to pass a bill to protect the City in a post-Brexit world. It will also extend some degree of protection to Gibraltar. While this may all sound very attractive in theory, as always it remains to be seen what the details will be and only when these are announced will it be possible to judge what effect (if any) they are likely to have.
It’s also worth noting that this will be the government’s second attempt to get such a bill through Parliament. Admittedly the first one was delayed due to the proroguing of Parliament, which is a whole other story, but it is probably fair to say that at this point in time, Parliament is very divided on a whole range of Brexit-related topics, which could make it very challenging to progress legislation related to anything connected with it.
Business and infrastructure
Issues relating to business and infrastructure tend to be more in evidence in budgets and their corresponding statements than in the Queen’s speech, however, there were some indicators of what’s to come. In terms of business, the government announced plans to strengthen the Pensions Regulator’s powers so that it could deal more effectively with employers who misused pension funds (almost 30 years after the death of Robert Maxwell).
It has also announced an overhaul of the railways, although the current pledge is a white paper rather than legislation and it confirmed its commitment to supporting the rollout of superfast broadband throughout the UK. These last two could be a major benefit to businesses, both in urban and rural areas. In fact, it is possible that getting rural areas of the UK fully connected to genuine high-speed internet would have the potential to transform their local economies, which would, in turn, benefit the UK as a whole.
Similarly, changes which impact a private individual’s personal finances tend to be more of a feature of the budgets and statements, which tend to be the events which announce key financial changes such as increases (or, occasionally) decreases in taxes.
While there were no taxation changes announced in the Queen’s speech, it was announced that the government plans to introduce what it called ‘collective’ pensions, which appear to be intended as something of a bridge between old “defined benefits” schemes and new “defined contributions” schemes in that they will be investment-based and workers will be exposed to some element of risk, but there will be a higher degree of protection for workers than there currently is in the “defined contributions” system.
As always, it remains to be seen what this will mean in practice, let alone whether or not it will be mandated for use in the workplace and, if so, under what circumstances and, if not, whether or not employers will adopt it voluntarily. At the current time, the Royal Mail has expressed an interest in developing the scheme, but they are only one employer out of many.