The Queen’s Speech on 21 June was not the grand event that might have been expected less than a month ago.
To quote the Parliament website, the State Opening of Parliament took place with “reduced ceremonial elements…due to the unique circumstances of the general election”.
The speech lasted just nine minutes, yet was designed to cover the next two years of legislation – if the Government survives that long. I am grateful to the Technical Connection Techlink editorial team (and John Housden in particular) for their input into the production of the following views on the speech and where it leaves us in relation to what to expect in tax and financial planning.
Coming away from the Conservatives
As far as legislation relevant to the financial services industry is concerned, you will hunt in vain for any of the proposals contained in the Conservative manifesto.
The word “pension” did not pass the Queen’s lips, and the Government later confirmed the triple lock and winter fuel allowance will stay in place. There was no mention of (BHS-inspired) legislation protecting pensions during company sales or mergers.
The statement that the Government “will seek to enhance rights and protections in the modern workplace” is little more than an acknowledgement that there will be a response to the Taylor Report. However, press reports suggest the publication of a response has been put on hold while the Government considers its position.
On social care, the speech offered only a promise to “bring forward proposals for consultation”. As the Dilnot capped regime for care costs is not due to begin until April 2020, there is still time for it to be culled.
Future Budget bombshells?
There was no comment about Budget timing in the speech, although the Chancellor had used the Andrew Marr show to confirm there will be no summer Budget.
However, the Chancellor’s promise that there would not be “anything like that” was subsequently contradicted by a few lines in the 82 pages of background notes issued by No 10 to accompany the two pages of the speech. Hidden on page 16 of these copious notes, under the heading of “Other Measures”, is the following:
“The [two-year parliamentary] programme will also include three Finance Bills to implement budget decisions. Summer Finance Bill 2017 will include a range of tax measures including those to tackle avoidance.”
The prospect of a summer Finance Bill raises two questions:
When does summer end? Governments are prone to elasticate seasons to suit their circumstances – witness the timings of some Autumn Statements. The Parliamentary timetable announced before the House of Commons dissolved has the summer recess running from 20 July to 5 September 2017.
In past years the post-summer sitting has lasted only 10 calendar days before the House shuts up shop for nearly four weeks because conference season has arrived. In 2016, that meant the House rose on 15 September and business did not resume until 10 October.
On the face of it a new summer Finance Bill introduced before the summer recess would have very limited time to debate if the aim was for it to reach Royal Assent by 20 July. Thanks to the recesses, it would not have much more debating time if the Royal Assent goal was mid-October.
What would be in the summer Finance Bill? The material culled from the Finance (No. 2) Bill 2017 was the contentious content. In theory, a summer Finance Bill could run to over 600 pages, based on the difference between the Finance (No. 2) Bill 2017 (776 pages) and the eventual Finance Act 2017 (155 pages).
Would the Government try to reinstate all the abandoned legislation and, if Royal Assent by 20 July is the goal, rush it through? In the current political climate trying to push through Making Tax Digital (to mention just one of the dropped items) without detailed Parliamentary scrutiny might well be difficult.
In conclusion, the legislative situation remains unclear on the “lost” Finance Bill measures. The promise of a summer Finance Bill does little to clarify matters for now.
Tony Wickenden is joint managing director of Technical Connection.
You can find him Tweeting @tecconn