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In the King’s Speech on 17 July, the new Labour government announced laws that could impact your finances. These include protections for workers and tenants and details on improving clean energy investment to help reduce your energy bills.
The King’s Speech is the cornerstone of the State Opening of Parliament and announces the laws and policies that the government wants to introduce over the coming year.
While manifestos give voters an idea of a party’s intentions, they’re designed to help win votes. The King’s Speech gives a clearer picture of the government’s immediate plans.
NerdWallet’s UK spokesperson, Amy Knight, said: “Consistent with Labour’s approach, fairness and opportunities for all were key themes in the speech, which set out bold ambitions for wealth creation for all communities. But, for families struggling with day-to-day costs, “moving on” from the cost-of-living crisis doesn’t feel realistic. The new bills could point Britain’s finances in the right direction, but the journey to economic recovery could be a long one.”
Here’s what was announced.
Employment rights from ‘day one’ and zero-hour contract ban
In the King’s Speech, the government said it plans to introduce a “new deal for working people” by introducing an Employment Rights Bill to “ban exploitative practices and enhance employment rights”.
The legislation will:
- ban zero-hour contracts
- stop ‘fire and rehire’ practices, whereby employers use this method to change the terms of an employee’s contract
- give employees basic rights from day one, including sick pay, parental leave and protection from unfair dismissal
Employees on a minimum wage could also see their pay increase because the government has said it will make it a ‘genuine living wage’ – although it’s not clear what this figure will look like.
Labour had previously sought to reassure business leaders that it would engage with industry on new legislation after concerns were raised that the new government would rush into its plans.
The Association of Convenience Stores has urged a “cautious approach” to future wage rates, saying that changes to the minimum wage are adding to a range of pressures on businesses.
‘No-fault’ eviction ban and the right to challenge rent increases
In the King’s Speech, the government announced that it will introduce a Renters’ Rights Bill to ban Section 21 no-fault evictions.
It claims that this legislation will give renters greater rights and protections. It is also expected to include the ability to challenge “unreasonable” rent increases, while draft legislation on leasehold and commonhold reform is also likely to be published.
The previous Conservative government had attempted to introduce a package of ‘renters reforms’ that included banning Section 21, as well as pressing greater obligations on landlords when it comes to rented homes.
While Shelter, the homelessness charity, said that the Renters’ Rights Bill will “restore hope to England’s 11 million renters,” the National Residential Landlords Association said that it’s vital it doesn’t worsen a “serious supply crisis” in the private rented sector.
Are train fares going to get cheaper?
The government plans to renationalise most rail passenger services, establishing what it’s calling ‘Great British Railways.’
Labour has previously said that this won’t necessarily make fares cheaper, but it will make them more transparent and simple for passengers, which it hopes will increase trust and accessibility.
Further measures may be needed to cut the cost of train travel. For example, railway campaign group Railfuture believes that fares and tickets can be reformed by:
- ensuring a ‘fair’ inflation increase linked to CPI rather than RPI
- making ‘split fares’ more visible and extending ‘pay as you go’ fares
- improving online and machine-based ticket sales
- ensuring that passengers can still buy tickets from a person at the station
Are energy bills going to go down?
In the King’s Speech, the government said it will “lower energy bills for consumers over time” by committing to a clean energy transition.
It plans on creating a publicly owned energy company called Great British Energy that it hopes will increase investment in clean energy.
Energy UK, the trade association for the energy industry, has previously said that while increasing homegrown renewables alongside Labour’s 2030 clean power target is a viable way of reducing energy bills, the lower cost of renewable energy is unlikely to decrease energy bills substantially until the early 2030s.
Labour’s manifesto had also pledged energy system reform, including a promise to work with Ofgem, the regulator, to reduce standing charges.
A law to prevent unchecked economic announcements
The Conservative government’s ‘mini-Budget’ in September 2022 caused significant market volatility that impacted personal finances, from mortgages to pensions. The chancellor at the time, Kwasi Kwarteng, didn’t ask the independent Office for Budget Responsibility to assess his plans before announcing them.
The King’s Speech announced legislation that will require governments to seek an independent review from the Office for Budget Responsibility before making significant tax and spending announcements.
Labour also used the King’s Speech to reiterate that securing economic growth is a “fundamental mission” and that it wants to prioritise wealth creation, helping communities move on from the cost-of-living crisis.
Labour isn’t scrapping the two-child benefit cap
The two-child benefit cap means that in most cases, low-income families can’t claim universal credit or child tax credit for more than two children. The Institute for Fiscal Studies (IFS) says that this benefit is worth £3,455 each year, for each child.
The two-child cap was introduced by the Conservative government in 2017. While the new Chancellor, Rachel Reeves, has suggested that she wants to scrap the limit, she has said that she doesn’t believe public finances are currently strong enough to do so. Subsequently, it didn’t feature in the King’s Speech.
The decision is proving unpopular within the Labour Party and has caused a rift between Scottish Labour and UK Labour, with Scottish Labour leader, Anas Sarwar, committed to pushing Keir Starmer to scrap the rule.
There will likely be further debate around the two-child benefit cap ahead of the Chancellor’s first Budget in the autumn.
What about Wales, Scotland and Northern Ireland?
As Wales, Scotland and Northern Ireland are devolved nations, not all of the proposed legislation will apply to them.
However, the King’s Speech did signal that the government wants to “strengthen” work with Scotland, Wales and Northern Ireland, to deliver the “best outcomes possible” for people all over the UK.
Image source: Getty Images
