Labour’s plans are not a quick fix for UK economy

The King’s Speech seeks to fix some of the plumbing, wiring and foundations of the economy to “get Britain building”.

It will take well into next year before we see any impact on economic growth from these plans.

In fact, the primary piece of legislation announced by His Majesty is to promote “economic stability”. This is noteworthy. Stability is not something that normally needs legislating for, but something which would be taken for granted in the UK.

The plans outlined include a lot of fiddly changes to how the government makes big decisions on planning, infrastructure, housing and transport. The bottom line is to give private investors more certainty about the economy and about policy.

The “Budget Responsibility Bill”, for example, is an elaborate way of saying there will never be another disastrous Liz Truss mini-Budget moment.

No future chancellor will be able to wave away the judgement of the government’s independent financial forecaster the Office for Budget Responsibility (OBR) as occurred in late 2022, when Truss announced £45bn in unfunded tax cuts.

The hope is that this will be such a rock of credibility and stability that investment into the UK will boom, and borrowing rates for householders, businesses and the government itself will fall back and not go back up again. Internally they call this “fixing the foundations”.