(Bloomberg) -- Prime Minister Keir Starmer promised to unleash Britain’s most ambitious planning reforms in decades and said getting the country building was a non-negotiable part of boosting economic growth, as he unveiled his landslide-winning Labour government’s legislative agenda.
In what will be seen as a dramatic step-change from the previous Conservative administration, Starmer announced 39 bills at the King’s Speech on Wednesday — Labour’s first in 15 years — in areas including renewable energy, housebuilding, workers’ rights, railways, artificial intelligence and cyber security.
That contrasts with the 21 bills proposed by ex-premier Rishi Sunak in the last Tory policy program laid out by King Charles III in November 2023, before Starmer and Labour won power at last month’s general election. It represents an attempt by the new administration to show it is hitting the ground running.
“Securing economic growth will be a fundamental mission,” King Charles said in the speech to Parliament. “It is my government’s objective to see rising living standards in all nations and regions in the United Kingdom.”
Reforming Britain’s planning system to enable 1.5 million homes to be built in the next five years, in additional to critical energy, industrial and transport infrastructure projects, was “key to unlocking our country’s economic growth,” the government said in policy documents accompanying the speech.
Starmer’s administration said it would enable “democratic engagement” with planning reforms, but that the emphasis would be on “how, not if, homes and infrastructure are built.” That’s a direct warning to so-called NIMBYs who have opposed building works in their local areas.
Labour promised a program of “national renewal” in the election, and a huge parliamentary majority should give Starmer a clear legislative path to delivering the infrastructure overhaul he envisages. Still, shifting power on planning decisions from local communities carries risks — although the government said it would only apply if projects were blocked unreasonably.
“We will unlock growth and take the brakes off Britain,” Starmer said in his introduction. “This King’s Speech returns politics to serious government, returns government to service, and returns service to the interests of working people.”
But Labour’s plans also fleshed out the challenge it faces. Chancellor of the Exchequer Rachel Reeves has described the economic legacy from 14 years of Conservative rule as the worst since World War II.
Growth has started to pick up but the recovery from the pandemic has been the second slowest among the Group of Seven advanced nations after Germany, the tax burden is the highest in over 70 years and public services need investment.
Starmer has pledged to lift UK growth to the top of the G-7, which would deliver a major boost to government revenues. Yet the International Monetary Fund forecast this week the UK would remain mid-table for the next two years.
Economists have warned Reeves may have to fill a multi-billion pound hole in the budget expected in September or October, as the Office for Budget Responsibility’s forecasts look too optimistic.
Almost the top line of the King’s Speech was a nod to the rocky foundations. “Stability will be the cornerstone of my government’s economic policy and every decision will be consistent with its fiscal rules,” the monarch said.
That was a reference to the “fiscal lock” the government said would require OBR assessments ahead of fiscal events, an attempt to draw a contrast with the infamous mini-budget of Liz Truss that roiled markets in 2022.
With little firepower to boost growth, Labour is gambling on legislative reforms to attract private investment. The King’s Speech was peppered with bills designed to release capital and remove obstacles.
“This is a very ambitious program, but one that can be deliverable — not just because they’ve got the votes but they are not trying to bite off more than they chew,” said Thom Brooks, professor of law and government at Durham University’s law school. “They’ll have the wind in their sails.”
Changes to planning rules included watering down local powers to block developments and removing the “hope value” right for landowners to demand highest possible valuation in compulsory purchase compensation.
A National Wealth Fund backed by an additional £7.3 billion of government money will aim to drive investment in the green energy, with a formal target of raising £3 of private investment for every £1 that the fund invests itself.
Labour’s manifesto commitment to bring rail services back into public ownership will also be legislated. The government also committed to improve rail connectivity in northern England, a move that could offset the impact of Sunak’s decision to scrap a chunk of the flagship High Speed 2 rail project.
Workers’ rights reforms — which have been the subject of concerns from some businesses — will see the government “deliver a genuine living wage,” alongside a ban on so-called zero-hour contracts and a raft of other measures aimed at improving workplace conditions.
The government also said it wants to “reset” UK ties with the European Union, including by making it easier to tweak British law to take into account shifting product regulations in the bloc’s single market.
Manifesto promises to remove the VAT exemption on private school fees were also included, and Labour brought back abandoned Tory promises including a progressive ban on cigarettes and an independent football regulator.
But Labour’s promise to lower the UK voting age to 16 does not appear in the government’s legislative agenda. Given the next general election is not due until 2029, Starmer may have decided to put the controversial move on hold.
In his statement, Starmer tried to draw a line under the past 14 years of Conservative rule that has been typified by political and economic turmoil.
“The snake oil charm of populism may sound seductive, but it drives us into the dead end of further division and greater disappointment,” the premier said, in apparent reference to his predecessors like the Brexit-backing Boris Johnson, but also US presidential candidate Donald Trump and right-wing parties surging in Europe. Nigel Farage’s Reform UK is strengthening in the UK.
“The fight for trust is the battle that defines our political era,” he said.
--With assistance from Ailbhe Rea.
(Updates with professor’s comment in 16th paragraph, reset in EU ties in 21st.)
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