Businesses react to plans for growth outlined in King's Speech

Business leaders across various sectors of the UK economy have broadly welcomed the emphasis on economic growth in the new Labour government's legislative programme.

UK Government

David Sapsted

22 July 2024

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Outlined in a speech to parliament last week by King Charles, the programme included proposals for 39 bills which Prime Minister Sir Keir Starmer would "take the brakes off Britain" and put the nation on the "path of national renewal".The draft laws included a Planning and Infrastructure Bill to streamline approval of housing and critical infrastructure projects; the creation of a new, state-owned energy investment and generation company; a National Wealth Fund Bill aimed at investing £7.3 billion over five years in infrastructure and green industries; and measures to re-nationalise rail passenger services and improve other forms of public transport.There will also be a new body created to boost skills training, while a Digital Information and Smart Data Bill will allow the use of digital ID for such processes as pre-employment checks. A Cyber Security and Resilience Bill will set out new rules designed to protect critical infrastructure from attacks.Sir Keir, who is also planning to increase workers' rights and devolved government in England, admitted after delivery of the King's Speech, that there was "no quick fix" when it came to economic growth and it remains a concern among business leaders about how rapidly the proposed changes will come about.

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Are the plans enough to sustain business confidence?

Julian David, CEO of the digital trade association techUK, welcomed the government plans which, he said, could "kick start" the economy, but added: "However, there is a huge amount that industry and government will need to work through."This will include close collaboration with industry as new laws on artificial intelligence and employment rights are drafted ensuring that we get the right balance between new laws and promoting the economic growth needed for the new prime minister to achieve his missions for government.”Rain Newton-Smith, chief executive, of the Confederation of British Industry (CBI), said that proposals such as reforming planning systems, speeding up approvals for major infrastructure projects, harnessing the potential of data and promoting a more joined-up approach between local and national government "can give businesses the confidence they need to unlock investment".She added: “With firms continuing to highlight access to labour and skills as a barrier to growth, addressing long-term inactivity and expanding the Apprenticeship Levy to offer a wider range of skills training can provide vital momentum to the economy.“With the economy beginning to pick up steam, what’s needed now is a relentless focus on delivery by deploying the capability and capacity of industry to turn these measures into swift and bold action.”Dr Roger Barker, director of policy at the Institute of Directors (IoD), said the organisation was "strongly supportive" of the government’s commitment to put economic growth and wealth creation at the heart of its legislative agenda."Our members need to feel that they can invest for the future with confidence and the legislative programme announced today succeeds in addressing some of the obstacles they have been facing. However, the devil will be in the detail, and it will be crucial for the government to consult closely with business in order to maximise the impact of today’s plans,” he said.

Positive response from manufacturing and financial services representatives

Anna Leach, the IoD's chief economist, added: "It’s great to see further steps by the government to de-politicise and strengthen institutions, providing a more stable policy platform for growth."The establishment of an Industrial Strategy Council – one of the IoD’s business manifesto asks – will give welcome longevity and structure to the government’s work with business to drive up UK growth. Alongside planning reform to unlock vital infrastructure investment, and a strong working relationship with business, these measures should help reinforce the confidence of business to grow and invest.”For the manufacturing sector, Stephen Phipson, chief executive of Make UK, described the King's Speech as "a bold statement of intent from a government that has clearly hit the ground running".He said the first priority had to be boosting the UK’s "anaemic" growth rate. "Central to this will be an industrial strategy which addresses the skills crisis and takes advantage of rapidly accelerating technologies. Industry will welcome the government’s recognition of these issues as key and looks forward to seeing more detail in the upcoming fiscal statement."The government's proposals were also applauded by the financial services sector. David Postings, chief executive of UK Finance, welcomed "the focus in the King’s Speech on economic stability and growth, something the financial services sector will play a key role in delivering". He added: "The transition to a low-carbon economy and the work of the National Wealth Fund is a major growth opportunity. Mobilising investment through the financial services industry will be critical to its success. Reform of the planning system is also key to delivering growth and ensuring more people can get the homes they need. "In an increasingly digital economy, we welcome the focus in the Digital Information and Smart Data Bill on digital ID. It is vital that people in the UK have a secure way to prove who they are and access services."

Unlocking productivity and global competitiveness through skills and green innovation

Shevaun Haviland, director-general of the British Chambers of Commerce (BCC), believed the new government's commitment to an industrial strategy "could put in place a framework to unleash the pent-up ambition of British business to grow the economy". “If we use it to make green innovation a key driver of that growth, and link it to a coherent plan around skills, trade, devolution, and AI, then the possibilities could be endless," she said.Ms Haviland added that billions of pounds of private investment have been held back by businesses which have been watching and waiting for long-term certainty in the economy. “The government’s clear intention to speed up the planning system for large-scale infrastructure can feed that business confidence, if it can be delivered. Measures to increase business resilience, reform of the apprenticeship levy and legislation to support sustainable aviation fuel could also boost the economy."However, she warned there were still major issues that needed to be addressed, such as improving the UK's trade relationship with the EU will not be straightforward. But she said the King's Speech "shows the voice of business has been heard and that government is introducing measures that benefit firms and help unlock investment". Ben Willmott, head of public policy at the Chartered Institute of Personnel and Development (CIPD), the professional body for HR, said that working in close partnership with employers and business bodies would be key to the government's aim of boosting skills, employment and unlocking the UK’s economic potential.But he said: “It's crucial that changes to employment legislation don’t discourage employers from taking on permanent staff or providing flexible employment opportunities that can benefit people who need to fit work around care, study or health needs for example.”Mr Willmott believed the creation of a new body to oversee skills training could provide a further boost to business skills investment, and ensure training and development became more aligned with business and learner needs.

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