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A ‘one nation Government’ with a precarious Parliamentary path ahead

27May Posted by Sermelo News

An antiquated speech amidst its usual pomp and pageantry has formally fired the starting gun. Let the legislative scrum begin.

The majority Government has set forward a mixed bag of priorities for reform and growth, but has also been careful to recalibrate power away from Westminster to the nations and regions, if not the European Union. The Conservatives are finally on a mission unshackled by a coalition Government, setting this next Parliament up for a pretty intriguing show. Here’s why:

Getting down to business

The Conservatives can finally march toward the (free) market for the first time in two decades. The direction of travel is epitomised by the appointment of the new business Secretary, Sajid Javid MP, who promised to ‘sweep away burdensome red tape and get heavy-handed regulators off firms’ backs’ in his first speech.

Top of his agenda is the need to bolster productivity and competitiveness. The vehicle to push some of his reforms – the Enterprise Bill – will, among other things, introduce business rate appeals reform and a cap on public sector redundancy pay. However, across the board, the UK requires a much better infrastructure to bolster productivity and living standards sustainably. Tackling supply-side problems that have restrained the UK economy for decades will be a crucial part of the economic recovery.

For Labour unionists, the salt in their wounds is the Trade Union Bill that will rein in trade union power.

At least half of eligible union members must vote for a strike to be able to go ahead and 40 per cent of members must vote if strike action is to take place in some essential public services. It will also address the intimidation of non-striking workers and introduce an opt-in process for the political funding by trade unions.

All this may well be rather painful for the Labour Party to absorb following the election defeat. Some relief may come in the knowledge that this legislation will no doubt run into some trouble in the House of Lords.

In / Out. Devolving it all about…

A serious review of the UK’s membership of the EU is a step closer with the EU Referendum Bill. The Government’s small majority is precariously dependent on the votes of a group of right-wing Conservatives who proved themselves rather rebellious in the last Parliament, which will require some rather careful stage management by the Chief Whip.

The Queen’s Speech also pushes forward a series of devolved Bills, under a rather ironically titled ‘one nation’ promise.

A Scotland Bill will offer further powers to the Scottish Parliament, including control of income tax, air passenger duty and borrowing. Now that the Scottish National Party holds all but three of the 59 seats north of the border, the question of how they vote on matters that don’t impact on Scotland will be interesting. With a new constitutional settlement being discussed, an important political question to pose is how much they will stray into English-only territory.

The Wales Bill will devolve further powers to the National Assembly for Wales, including certain energy projects, transport regulation and voting for 16 and 17 year olds.

Cities are also winners. There is serious recognition that people must have more direct power over the areas in which they live – the proposed Cities Devolution Bill, which allows citizens to bid for an elected mayor, with far more sway over planning, transport, policing and health.

Domestic difficulties surely await

Energy issues will be tackled via legislation too. The Energy Bill will establish the Oil and Gas Authority as an independent regulator of the industry and will allow local planning authorities to have a greater say over onshore wind farms in their area.

Transport issues will come quickly to the Cabinet table with the Davies Commission report into runway capacity due in June (although any response might well be as protracted as it is contested). In the longer term, the High Speed Rail Bill will provide the Government with the legal powers required to construct and operate phase 1 of HS2, which inevitably stokes up the usual Nimby interventions.

The Government has much to do in order to liberalise the planning system and release land for homes. The proposed Housing Bill will extend Right to Buy to housing association tenants and also increase the supply of starter homes, as well as simplify the neighbourhood planning system. But some may doubt this will be enough to remedy the scarcity of supply and higher costs facing young professionals, wishing to get on the housing ladder.

Parliamentary counsel within the Home Office might well be one of the busiest departments in Whitehall. Comforting the right of the Party is the Immigration Bill, which proposes to bring in a number of measures to increase the removals and deportations of illegal immigrants. It will also reduce the demand for skilled migrant labour and address the exploitations of low-skilled workers. A number of other Bills dealing with Investigatory Powers, Policing and Criminal Justice, and banning psychoactive substances are also top of the in-tray.

The key proposal talked about in recent weeks has been the Government’s threat to replace the Human Rights Act with a Bill of Rights. This will consulted on further, which is an important climb-down. Expect a fierce debate ahead.

Blue-collar conservatism

This new breed of Conservatism, which plays to the centre ground, will see a series of measures that place the Tories on the side of potential workers and aspiring working families:

  • A Childcare Bill will grant working parents 30 hours free childcare a week for 3 and 4 year olds;
  • 3 million new apprenticeships will be created to help achieve the goal of the highest employment rate of any major economy, alongside ensuring that the Minimum Wage remains tax-free;
  • A five-year tax lock, via a National Insurance Contributions / Finance Bill, means there will be no income tax, VAT or National Insurance rate rises in this Parliament, a promise that will very much contrast Government flexibility.

But there are welfare reform plans too, through the Full Employment and Welfare Benefits Bill, which will freeze working age benefits, tax credits and child benefit, and reduce the level of the benefit cap. Ministers will now have a duty to report on job creation.

Make no mistake. The re-branding is clear: ‘blue collar conservatism’.

Some final thoughts

In the short to medium run, the opposition is wounded amidst differing states of reflection, introspection, and obvious disappointment. But the big issues now facing the Government offer great potential to wobble any wafer-thin majority. Internal in-fighting within the Conservative Party is hardly inconceivable; after all, the Tories have some history here.

A compounding factor is the Government’s goal of implementing further significant fiscal consolidation over the next two years, including billions from departmental savings. This will be challenging enough regardless of all of the expensive election pledges (some of which were only ever meant to be negotiating positions for a coalition agreement).

And whilst it is refreshing to see the short-term jubilant excitement in Westminster with new MPs, one might predict that this might wane once they understand that they will be locked down in the House by the whips for the foreseeable future.

For those that desired a coalition Government (in whatever form) to be excited by politics again, they might not be too downhearted. This will be a fascinating Parliament ahead.


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