It’s an indication of the constantly changing state of the financial world – and the Government’s introduction in draft form in May of many of the bills presented – that today’s Queen’s Speech has been largely shrugged off in the City. While there were certainly murmurs of discontent from business groups such as the British Retail Consortium and the British Chambers of Commerce over the increasing burden of taxation and red tape, interest today has centred as much on what wasn’t in the bill as what was with Business Secretary Lord Mandelson’s confirmation this morning that the Government would be extending flexible working rights for 4.5m working parents with children as old as 16 also falling foul of the BRC and the BCC.
After the events of the last six months it would have been a shock not to see the Government taking steps to address issues that have arisen in the banking sector, however, and the banking Bill, which is already on its way through the House of Commons, addresses a number of high profile issues. These include a strengthening of the Bank of England’s hand with the creation of a new Financial Stability Committee; the establishment of a new regime in which the Bank has greater latitude to support any bank that does find itself in trouble (for instance by providing short-term financial support without making this public); and a Special Resolution Regime that will allow the authorities ultimately to sell a failing bank to another bank; nationalise it; or to transfer it to a ‘bridge bank’ controlled by the Bank of England.
Savers are also the beneficiaries of additional support from the Government with a commitment to legislation that will “ensure fairer and more secure protection for bank depositors”. In addition there will be a new savings scheme for people on low incomes that will see the government add 50 pence to every £1 saved, up to a maximum of £300 after the account-holder has been saving for two years.
With the Government shying away from anything that could depress the economy, however, and the legislative programme in general very thin on the ground today’s speech very much feels like tinkering at the edges. With a clear view of the direction of economic policy having been given in last week’s Pre-Budget Report anyone looking for further enlightenment today will probably be disappointed.
This article also appears in Edelman Public Affairs’ summary of the Queens speech which can be found here.
