Key Takeaways from the King’s Speech: The initial outlook for the UK construction industry

Introduction

In the King’s Speech on 17 July 2024, 40 bills were announced covering a range of topics and issues, including across the themes of ‘Economic Stability and Growth’; ‘Great British Energy and Clean Energy Superpower’; and ‘National Security and Serving the Country’. This update highlights some of the main bills from the Briefing issued by the Prime Minister’s Office[1] that are most relevant to the construction, infrastructure and engineering sectors, and flags other relevant issues concerning investment, planning and the environment.

Investment plans – a public and private ‘partnership’?

The creation of a National Wealth Fund (“NWF”) is central to the government’s aims to have a clear industrial strategy, deliver growth, and to create a greener economy and energy system. The NWF will be capitalised with £7.3 billion to make transformative and targeted investments across the country and to create jobs and taxpayer returns. The NWF also seeks to attract and mobilise additional private sector investment from investors and businesses (estimated to be in the region of billions of pounds). For example, Labour has stated that up to £3 of private sector investment could be generated for every £1 invested[2]. The government has also already reportedly commenced actions to align both the British Business Bank and UK Infrastructure Bank under the NWF.

The Crown Estate is recognised by government as playing a critical role in maintaining and improving public infrastructure in England, Wales and Northern Ireland. According to the Briefing, the Crown Estate Bill will modernise and remove outmoded restrictions and potentially unlock significant investment in public services and infrastructure, e.g. marine investment to accelerate and quadruple offshore wind capacity by the 2030 target. The reforms under this Bill seek to safeguard the successful future of The Crown Estate business, reinforce the government’s Clean Energy Superpower mission, and deliver long-term returns to UK taxpayers.

Planning and Infrastructure

The current planning regime has long been criticised as being overly complex, lengthy and slowing down economic development and growth. According to the Briefing, timescales for planning decision-making have increased: it reports that only 9% of Local Planning Authorities (“LPAs”) are determining over 70% of non-major applications within an 8-week period. 1% of LPAs determine more than 60% of major applications within the statutory 13-week period[3]. This Bill therefore seeks to reverse this trend, i.e. by raising local capacity and speeding up overall decision-making.

The Planning and Infrastructure Bill has been positioned as playing a pivotal role in getting the country building, including through streamlined and modernised planning reforms, changes to the compulsory purchase compensation regime, and the accelerated delivery of housing and infrastructure. At a high level this encompasses other changes to the delivery of major infrastructure projects and critical programmes, such as boosting renewable energy and upgrading the national grid.  The measures also seek to directly address the UK’s housing shortage and support the Party’s earlier manifesto target to build 1.5 million homes. The government has also indicated that it will pursue sustainable growth by encouraging investment in industry (see above), skills, and new technologies.

Transport

Key changes and bills, such as those linked to the Department for Transport, include the:

• Passenger Railway Services (Public Ownership) Bill: Legislation to improve railways by reforming rail franchising and bringing train operators into public ownership (per Labour’s manifesto commitment).
• Railways Bill: Focuses on improvements to the railways and establishment of Great British Railways. The vision is for a simplified and unified rail system that supports the economy and delivers better value for money. Legislative changes and standards will also facilitate delivery against six key objectives including reliability, efficiency, quality, affordability, accessibility and safe travel.
• High Speed Rail (Crewe to Manchester) Bill: Drives further economic growth and transforms rail connectivity and services across regions and in the North of England. In doing so, Labour expressly made clear in the Briefing that they “are not reversing the decision to cancel the second Phase of HS2”[4] but are instead ‘repurposing’ this.

Environment, energy and climate

The government has recognised the global climate challenge and has committed to a clean energy transition aimed at creating resilience and lowering energy bills over time. Great British Energy, a new publicly owned clean power company will be created under the Great British Energy Bill and with the objective to accelerate investment in renewable energy sources, such as offshore wind.

The Sustainable Aviation Fuel (Revenue Support Mechanism) Bill has been promoted to support sustainable aviation fuel production. Additionally, in a move to improve water quality, the Water (Special Measures) Bill will be introduced to strengthen the powers of the water regulator.

Initial commentary

Out of the 40 new bills unveiled on 17 July, at least a quarter had some form of built environment element or link covering planning, increased devolved powers at a local level, housing, energy, transport, or the environment, health and wellbeing. The content of the Briefing indicates the forthcoming direction of travel, and that Labour appears to be committed to stimulating the economy and creating future investment and growth.

Whilst some news commentators have questioned the level of Labour’s ambition and the availability of skills around some of these elements (including construction workers, apprentices and planners), change is certainly on the horizon and there will be opportunities for construction companies. There have already been calls on Labour from parts of the industry press, and from industry bodies and environmental groups in support of the legislative changes outlined, to consider how to implement the various policies into practical action in a prompt and effective fashion.

[1] “THE KING’S SPEECH 2024”, Prime Minister’s Office, 17 July 2024 – FINAL – 17/07/24 King’s Speech 2024 background briefing final GOV.uk.docx (publishing.service.gov.uk)

[2] Briefing, page 13

[3] Briefing, page 19 (“Key facts”)

[4] Briefing, page 43