The King’s Speech: Navigating the Future of UK Business 👑

Hey there! 👋

On July 17, 2024, King Charles III delivered the "Speech from the Throne" as part of the State Opening of Parliament. This speech marks the formal start of a new parliamentary session and outlines the government's legislative agenda, reflecting the priorities of the ruling party—in this case, the Labour Party.

In this session, the King's Speech referenced 40 bills that the government intends to introduce. This article will explore some of the standout elements of the speech and discuss how these proposed bills may impact UK businesses if they become law.

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Zooming In 🔎

This section will delve into several key elements of the King's Speech, with a full breakdown available here. Additionally, it will explore the potential impacts on a law firm's clients and the necessary steps that law firms may need to take in response. As these measures are implemented, government and public sector lawyers and advisers will play a crucial role at every stage.

1. The Great British Energy Bill ⚡️

• This bill aims to establish a publicly-owned energy company that is proposed to be headquartered in Scotland.

• It will focus on clean energy projects to achieve energy independence, aligning with the government's goal of reducing carbon emissions by 45% by 2030.

• Backed by £8.3 billion in new investment but will require significant private funding, with the potential to leverage £60 billion in private equity investment

How does this impact a law firm?: Given the need for private investment, a law firm’s private equity practice may be involved on the investor side by assisting in setting up and structuring funds to pool money for these investments. They will also play a role in negotiating contracts related to the investments. Additionally, ESG lawyers may advise the government on complying with national and international environmental regulations during the development of clean energy projects.

2. National Wealth Fund Bill  

• As a reminder, a fund is an investment vehicle used by private equity firms to pool capital from investors for deployment. The National Wealth Fund (NWF) Bill aims to boost investment in national infrastructure projects, particularly through institutional investors in the private sector. The NWF will be managed by the UK Infrastructure Bank.

• The NWF Bill will play a crucial role in deploying capital to support the government's vision for clean energy by 2030 and its plan to achieve net-zero carbon emissions by 2050. This includes investing in gigafactories (e.g., electric vehicles), clean steel production, and carbon capture technology.

• The fund plans to initially deploy £7.3 billion through the UK Infrastructure Bank, with the goal of generating £3 of private investment for every £1 it invests.

How does this impact a law firm?: Finance lawyers will be key in raising capital, structuring financial products, and managing operations. They will ensure that the fund complies with UK laws and regulations. Corporate lawyers, specifically private funds lawyers, will be essential in structuring the fund and ensuring compliance with corporate regulations. Given the fund's focus on sustainability and a carbon-neutral future for the UK, ESG lawyers will play a critical role in ensuring compliance with environmental standards and assessing how the capital will be deployed.

3. Employment Rights Bill  

• This bill, set to be introduced within the first 100 days, aims to comprehensively reform workers' rights.

• Key elements include banning zero-hour contracts and ending practices like "Fire and Rehire" and "Fire and Replace."

• The creation of day-one employment rights, including parental leave, sick pay, and protection against unfair dismissal.

How does this impact a law firm?: Employment lawyers will play a crucial role as these changes will impact all employment contracts. Employers will need support from the outset to understand their rights and obligations. The bill’s introduction of "day one rights," which includes the right to protection against unfair dismissal from the first day of employment, eliminates the current two-year qualification period. Lawyers will need to advise clients and redraft clauses to implement fair dismissal procedures. The ban on zero-hour contracts will require many companies to seek advice on redrafting employment contracts to comply with the law while maintaining the flexible nature of this employment style.

Future Prospects 🔮

It is important to note that these are proposed bills outlining the government's agenda. In order for a bill to become law, it must go through multiple stages of parliamentary debate, committee scrutiny, and voting. With a strong parliamentary majority of 158 seats, Labour is likely to push its political agenda through the Commons with minimal opposition, leveraging its vote share and the party whip system. Whether all 40 of the bills mentioned in the King’s Speech will become law is yet to be determined.