Long-awaited reforms to housing, education, justice and health were at the centre of the King’s Speech as the under-fire Prime Minister attempts to show the country he can bring about the changes his party promised.
Sir Keir Starmer unveiled his legislative programme for the next parliamentary session on Wednesday, which he hopes will win over Labour MPs calling for his resignation after a disastrous set of local election results.
But the King’s address was overshadowed by reports Health Secretary Wes Streeting is preparing to resign and launch a Labour leadership bid following his short meeting with the PM in No10 on Wednesday morning.
The speech included bills to abolish NHS England, introduce a “tourist tax”, limit trials by jury, overhaul special educational needs teaching, bring in digital ID and reform the leasehold system in England and Wales.
Here is what it means for Londoners:
Tourist Tax
The Government has backed Sir Sadiq Khan and other mayors in introducing a tourist tax.
The Overnight Visitor Levy Bill will “deliver on the manifesto commitment to transfer power out of Westminster by devolving new revenue raising powers”, the Government said.
It will mean tourists face a charge when staying in hotels and short-term lets in London and other tourist hotspots, similar to the levy charged by many other European cities.
Mayors and “potentially other local leaders” will be able to take the cash raised and “reinvest it back into their local economies”.
Details of the cost, and where the money will be spent, have not been released. BusinessLDN has called for the tax to be a flat rate of around £2-3 per night.
The Government said it will shortly publish a response to a consultation that sets out the views of businesses and councils and “provide further detail on the design and implementation of the levy”.
Paul Swaddle, the new Tory leader of Westminster City Council, said: "While comparisons are often drawn with other capital cities, the reality about an overnight visitor levy is that in Europe, VAT is significantly lower and the total tax burden is lower.
“Our hotels across the West End and elsewhere in Westminster need to be competitive to keep us a global visitor attraction. "However if the levy is to be raised, it must be spent locally for services that benefit visitors, such as keeping the streets clean and safe.
“The cost of supporting the visitor and commuter economy in Westminster is an estimated £115m a year and that needs to be recognised. It's important we now see the fine print of what is being proposed."
Leasehold Reform and Housing
Leasehold reform has long been promised by the Government after homeowners have faced skyrocketing service charges and ground rents.
More than a third of London’s housing stock, over 1.4 million homes, are leasehold flats.
The Government said reforms will mark “the beginning of the end for the feudal leasehold system that has tainted the dream of home ownership for so many”.
Legislation to “increase long-term investment in social housing and reform the leasehold system, including the capping of ground rents” at £250-a-year, will be brought forward. New leasehold flats will be banned and laws that mean leaseholders can request improvements, such as a gigabit capable broadband connection, introduced.
A bill aimed at supporting remediation for people living in homes with unsafe cladding will also be put in place.
King Charles III said: “My Government will seek to reinforce the long-term energy, defence and economic security of the United Kingdom as an essential component of strength on the world stage.
“This will include housing, which can be a source of insecurity for many people. My Ministers will bring forward legislation to increase long-term investment in social housing [Social Housing Renewal Bill] and to reform the leasehold system, including the capping of ground rents [Commonhold and Leasehold Reform Bill].”
Leaseholder campaigners have called for an end to the system that sees landlords have control over the management, shared facilities and related costs of their homes rather than residents who have a stake in their upkeep.
Harry Scoffin, the founder of campaign group Free Leaseholders, said the reforms were too “small” and accused the Government of “propping up the service charge racket”.
He said: “This is more talk big, act small politics from the Starmer government.
“It is an insult to the millions of leaseholders being looted in their homes that a Labour government has walked back its manifesto promise to ‘end’ the feudal leasehold system, instead serving up sham ‘reform’ designed to keep big money interests happy.
“Astonishingly, the only new measure appears to be little more than a right for leaseholders to petition at the feet of their freeholder masters for permission to get an internet connection. It is the modern-day equivalent of telling the peasants to eat cake.
“Our supporters are trapped in their homes, unable to sell or remortgage and suffering negative equity, while Hamptons has found that 37% of leasehold flats now have service charges in excess of 1% of the property value, which lenders increasingly refuse to back.”
Caroline Wild, Counsel in the Real Estate Disputes team at Forsters, said: “Given the growing pressure on the government to deliver on its manifesto commitment to leasehold reform, it was unsurprising to see the issue return to the public agenda in the King’s Speech.
“With leasehold reform now politically inevitable, any forthcoming Bill is likely to represent one of the most significant overhauls of property ownership for generations. However, while the political intent is clear, the government still faces a considerable challenge in balancing the competing interests at play.
“If the balance is not struck, there is a real risk that the property market could be left in a prolonged state of uncertainty, with leaseholders potentially worse off than they were before.”
Other Measures
Other measures in the King’s Speech include:
- A new law to strip disgraced peers like Lord Peter Mandelson of their titles.
- Measures which could lead to the banning of state-linked groups like Iran’s Islamic Revolutionary Guard Corps (IRGC).
- Confirmation of Labour plans to lower the voting age to 16.
- A package of laws to ease the burden of regulation and make it faster to build new energy infrastructure.
- Legislation for the new digital ID scheme.
The Government has been under pressure to ban the IRGC but has claimed existing legislation does not allow this.
The new Tackling State Threats Bill is intended to close this loophole, giving powers similar to those used to proscribe terrorist organisations.
Sir Keir said: “We will take on extremism where it appears, including where it is sponsored by foreign powers that are hostile to the UK, such as Iran.”
