UK government to boost powers of fiscal watchdog and nationalise railways in legislative plan
Plans to improve data sharing for public services also unveiled
The new UK government has pledged to expand the powers of a major fiscal watchdog and nationalise the operation of the railways in its first legislative programme since taking office.
UK governments set out their plans in a speech by the monarch, and the King today set out plans for as many as 39 bills.
Many of these pieces of legislation will implement plans set out by the Labour Party as part of their election manifesto.
Among these plans is a pledge to boost the powers of the Office for Budget Responsibility (OBR) to ensure that governments have to get an assessment from the watchdog before major public spending announcements.
The OBR was set up by Conservative chancellor George Osborne in 2010 with the aim of depoliticising economic assessments that underpin public spending projections by moving them out of the Treasury and into an independent body.
However, the OBR could only produce its projections when asked by ministers, and the chancellor is not currently required to seek an OBR assessment before making Budgets or other major spending announcements. During Liz Truss’s time as prime minister, chancellor Kwasi Kwarteng set out a tax cutting plan without an OBR assessment, leading to financial markets losing confidence and the government needing to pay more to borrow money.
The new Labour government says that the new “fiscal lock” will mean that any government making “significant and permanent tax and spending changes” will be subject to an OBR assessment, as the watchdog will have the power to “produce an assessment at a time of its choosing”.
Other measures include a plan to bring rail operators back into public ownership. Legislation will make transferring rail operations, which are currently run by private operator on long-term contracts, back to the public sector the default when these franchises end, as opposed to a service of last resort.
“Transferring operations to the public sector will save the taxpayer millions of pounds that are currently paid out in fees to private-sector operators each year,” the government’s briefing on the bill stated. Alongside this, a new body – Great British Railways – will be created to bring the management of the rail infrastructure and trains operations under one roof. Legislation will also improve bus services by delivering new powers for local leaders to franchise local bus services and lifting the restriction on the creation of new publicly owned bus operators.
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Focus on green growth
The government said that this action was vital in “unlocking the full potential of the railways is essential to growing the economy and lowering emissions from transport”, and a number of other parts of legislation also focused on the potential climate impact.
The Bill establishing Great British Energy – a new, publicly-owned energy production company which will own, manage and operate clean power projects – said this would help tackle climate change by reaping the benefits of clean, secure, home-grown energy and lower bills for families, while the creation of a National Wealth Fund, with £7.3bn (US$9.5bn) to invest in “transformative investments” to deliver economic growth and a greener economy. The legislation will formalise work that has already begun to align two existing UK government institutions – the UK Infrastructure Bank and the British Business Bank – into the National Wealth Fund.
In his introductory comments to the legislative programme, prime minister Keir Starmer said that the legislative plan “starts, as it must, with our economy”.
He said: “The economic chaos working people have endured since the mini budget will never happen again with my Labour government. We are introducing a Budget Responsibility Bill to protect taxpayers’ money and people’s living standards. From that foundation of economic stability, we will generate higher economic growth in every community.
“We will reform the planning rules to build the homes and infrastructure the country desperately needs. We will level up workers’ rights, so every person has security, respect and dignity at work; we will create a new industrial strategy and invest in cleaner, cheaper British energy; and we will harness the power of artificial intelligence (AI) as we look to strengthen safety frameworks.”
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Legislation to harness ‘smart data’ for public services
Elsewhere in the speech, the government said new legislation would help harness the power of data for economic growth and support a modern digital government.
The Digital Information and Smart Data Bill will “enable more and better digital public services”. While there are specific pledges to help government share data about businesses that use public services, as well as introducing an electronic system for the registration of births and deaths and applying new information standards to IT suppliers in the health and social care system, there is limited information on how then plans will “will improve people’s lives by making public services work better by reforming data sharing and standards”.
There is also a pledge to pass legislation to improve public sector cyber security and resilience, with action to “strengthen the UK’s cyber defences, ensure that critical infrastructure and the digital services that companies rely on are secure”.
The only mention in the legislation of AI is that the government will “seek to establish the appropriate legislation to place requirements on those working to develop the most powerful artificial intelligence models”.
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About Richard Johnstone
Richard Johnstone is the executive editor of Global Government Forum, where he helps to produce editorial analysis and insight for the title’s audience of public servants around the world. Before joining GGF, he spent nearly five years at UK-based title Civil Service World, latterly as acting editor, and has worked in public policy journalism throughout his career.
