Some welcome proposals for business in the King's Speech

The new Labour administration used the King’s Speech to set out key measures for the upcoming parliament.

Whereas the proposals cover all areas of governance, local business leaders will be paying particular attention to those with fiscal impacts.

Among the more interesting is the proposed Budget Responsibility Bill.

As anticipated, this Bill will require that every budget event which makes changes to taxation is subject to oversight by the Office for Budget Responsibility (OBR).

In addition, the expectation is that this will give the OBR greater powers to interrogate tax-raising measures to ensure their impacts are fully understood before implementation.

I think businesses will welcome this proposal, as it should prevent cavalier or unfunded spending promises from going unchecked.

The proposed Audit Reform and Corporate Governance Bill will be of more interest to business leaders than to most others.

It will give a new regulator great power to scrutinise financial reporting. This dovetails quite closely with other measures enacted over recent years aimed at tackling fraud, bribery and tax evasion.

The overall objective here is to ensure financial accountability makes its way into the boardroom, and is not just the responsibility of oversight bodies or government.

Again, this should be a welcome move as long as it does not force too much of an additional administrative burden onto businesses.

The removal of the VAT exemption from private school fees was anticipated. How and when this is ultimately enacted remains to be seen, however.

Many commentators are expecting significant resistance to this measure, not least from education bodies including teaching unions who fear state schools will have to deal with the fall out.

Whether or not this measure actually is a net revenue raiser for the Treasury has also been questioned, given the additional cost and pressures on the state school system that may follow.

Finally, Labour have pledged to further enhance the national minimum wage to a ‘genuine living wage’ level.

Clearly this is a laudable plan. But let’s not forget that these increases are met by businesses and are unfunded, meaning they place financial stress on employers.

It’s also an inflationary measure at a time when inflation has only recently come back under control.