By Annie Makoff MembersAccountants react to the King’s Speech18 Jul 2024 The new Labour government promises to “take the brakes off Britain”, but do the announced bills help?In the first monarch’s speech delivered under a Labour Government in 14 years, King Charles this week unveiled 35 bills plus four draft bills centred around economic growth and wealth creation for ‘all’ communities.The ‘packed’ speech is the busiest since 2005 when Tony Blair’s third government unveiled 50 bills in total.The 2024 plans, which will ‘take the brakes off Britain’ includes establishing a new Industrial Strategy Council to set targets and monitor progress and setting up a new publically-owned Great British Energy provider headquarted in Scotland to excelerate investment in renewable energy.Plans to accelerate housebuilding, along with giving renters greater rights and protections were also included, along with plans to renationalise railways, reset the relationship with the EU and remove VAT exemption for private school fees.Of particular interest to accountants, bookkeepers and their clients, were:Draft Audit Reform & Corporate Governance Bill: establishing the Audit, Reporting & Governance Authority in place of the Financial Reporting Council (FRC). It will have greater powers to tackle bad financial reporting to improve corporate governance and audit reporting.Budget Responsibility Bill: future fiscal measures will now need to be independently assessed by the Office for Budget Responsibility.National Wealth Fund Bill: allocates £7.3bn across UK Infrastructure Bank to kickstart investment.Planning and Infrastructure Bill: includes measures to speed up housebuilding by streamlining and fast-tracking the planning stage.Employment Rights Bill: bans zero-hour contracts and fire-and re-hire practices while strengthening existing employee rights around flexible working, paternal leave, sick pay and unfair dismissal.Skills England Bill: introduction of new skills body for England made up of businesses, providers, unions and local authorities. It will also include reforming and expanding the Apprenticeship Levy.Pension Schemes Bill: includes measures to improve value for money on pension schemes.Digital Information and Smart Data Bill: improves data-sharing standards and systems around data verification services.Cyber Security and Resilience Bill: expands the regulation of digital services and improve cyber security measures.Sustainable Aviation Fuel (Revenue Support Mechanism) Bill: encourages investment in the production of sustainable aviation fuel. So what do accountants think?The Employments Rights Bill may have a significant impact on smaller businessesWendy Ross, Founder and Director, Tonbridge AccountantsThe government have committed to securing economic growth and to help people move on from the cost-of-living crisis, so overall it is very positive. However, this is a huge task and people will want to see action in order to build trust.The Budget Responsibility Bill is key to this. The public will have more faith if tax and spending changes have been thoroughly assessed by an independent party. The National Wealth Fund Bill could also be very positive, especially if the mission to deliver growth extends down to smaller businesses.However, it’s surprising that from 40 bills there was relatively little on tax reform. Removing the VAT exemption for private school fees, although politically topical, isn’t likely to have a significant impact on the wider economy. Most of the measures outlined will take a very long time to develop and, as a result, there is nothing that will be of particular benefit to our client’s businesses in the shorter-term.The Employments Rights Bill may have a significant impact on smaller businesses with few employees. Employment law is already complex and if the changes to workers’ rights aren’t rolled out in a sensible way they could prevent the hiring needed to drive the desired growth.Given the long-term nature of the plans, we look forward to the next budget, which will give a feel for the more immediate plans in supporting business and boosting the economy.Verdict: The Employments Rights Bill may have a significant impact on smaller businesses as employment law is already complicated.The King’s Speech was cautious, emphasising stabilityStephen Leonard, FCCA ACA MAAT, Partner, J L Winder & CoAfter several false starts under the previous government, the long-awaited ‘no-fault eviction’ legislation will finally get over the line. Tenants will gain much needed protection, but it will have a negative effect for decent landlords who will find it harder to obtain their properties back in genuine situations.The planning reforms aim to help the government achieve their 1.5 million new homes target, which is welome. Yet it’s unclear if this includes affordable homes to help Gen Z get on the property ladder. There are also likely to be objections about the use of ‘grey & green’ belts sites.Employment laws are also on the agenda. Proposals such as the right to flexible working from day 1, a ban on zero-hour contracts and the equalisation of minimum wage across all age bands will create an increase in admin and be a financial burden for businesses.While these laws aim to prevent exploitative practices, it will create issues. Some zero-hour contracts may genuinely benefit some employees for example while a 16-year-old school leaver on the same wage as an experienced 25-year-old may not go down well. It will also be costly for many small businesses.There was little about taxation changes or reforms as this will be saved for the Chancellor’s Autumn budget.Verdict: The King’s Speech was cautious, emphasising stability and acknowledging that growth will take time.I was hoping for an increase in personal allowance and tax bandsBen Rose MAAT, Partner, Martin Seitler & CoThe main point that stood out is the planned VAT on private schools. Some parents may be forced to move their children out of the private school system. This will mean state school funding will have to increase to cope with greater demand. We could potentially have fewer high caliber students too, meaning fewer high income earners in the future.Moreover, many parents with children in private schools aren’t necessarily wealthy. So this tax is aimed at the wealthy but is actually going to affect the working class, too.However, the accelerated house building scheme looks interesting and many of our construction clients will feel that this may help them grow their businesses. We also have many clients who own and rent out property. The new rules giving tenants more rights will obviously affect them. We’ll see a few people struggle with the more difficult tenants.Plans to nationalise the rail network could, one day, boost the economy if the exortionate cost of train travel is addressed. It should not cost £300 for a return ticket from Manchester to London.I would have liked to have seen more tax cuts and help for small businesses, including an increase in the personal allowance and tax bands. Small business and middle income families will continue to struggle and will fight until something changes.Verdict: I’d have liked to see an increase in the personal allowance and tax bands to help small businesses and middle income families.Would you like to contribute to future articles like this one? If so, please get in touch with Annie Makoff-Clark at [email protected]. Annie Makoff is a freelance journalist and editor.