What can advisers expect from the Queen's Speech?

The Queen's Speech marks the state opening of parliament and outlines the programme of legislation the government intends to progress during the new parliamentary session. 

Here’s what advisers and providers might expect from tomorrow’s speech:

Online Safety Bill

In March, a bill aiming to protect internet users from scams and hold tech giants to account came one step closer to becoming law after being introduced to parliament.

The online safety bill was read in the House of Commons on March 17, nearly a year after the first draft was published.

It requires social media platforms, search engines and other apps and websites to protect children and tackle illegal activity, all while maintaining freedom of speech.

Ofcom, the industry regulator, will also be given the power to fine companies up to 10 per cent of their annual global turnover if they do not comply with the laws. 

The bill has been updated a number of times since the first draft was published in May 2021.

Changes include bringing paid-for scam adverts on social media and search engines into scope, after intense pressure from a coalition of consumer groups, charities and financial services industry bodies.

Quilter’s chief risk officer Matt Burton, said: “Having been introduced last year to protect people from online fraudulent investment propositions, the online safety bill will be carried over to this year’s Queen’s Speech after a number of amendments.

“Reports suggest risk of a rebellion over the kinds of posts social media companies will be required to take action on, warning of censorship if there is not clarification. 

“However it is no exaggeration to say that customers of financial services have faced a fraud epidemic, with very few protections in place to stop harmful content from appearing online and that must be clamped down on sooner rather than later.”

Burton argued that for far too long, the onus has been on diligent individuals and financial services providers to identify scam adverts and report them to search engines, the regulator and the police instead of the search engines undertaking basic due diligence to filter out fraudulent adverts in the first place. 

“This bill is the perfect opportunity to require search engines and social media platforms to remove sham investment and impersonation scams promptly from their sites, and conduct the necessary due diligence to stop them from appearing,” he said.

Meanwhile, Aegon’s head of pensions Kate Smith, said there may be a few surprises but one thing for sure that will feature is the online safety bill for a second year.

“Bills are normally expected to take under a year to go through the process to coincide with parliamentary sessions but a considerable amount of scrutiny and amendments have caused delays.” she said.

“The good news is after intense calls from the pensions industry, the bill now includes fraudulent paid-for adverts, giving greater protection to people from financial scams.” 

Financial Services Bill

There are growing expectations of a Financial Services Bill as part of the Queen’s Speech, given the Financial Conduct Authority’s proposed consumer duty rules coming in next year.

Industry members are calling for clearer boundaries around what is deemed as guidance and what is deemed as advice.

AJ Bell’s head of retirement policy Tom Selby, said: “Providers want to support savers and retirees more but are held back due to the lack of clarity in the rules of when guidance ends and advice begins. If this problem is not addressed then the aims of the consumer duty risk being undermined and millions of people will face the likelihood of making poor retirement decisions.

“Given it is those on lower incomes who cannot afford to pay for advice who are most in need of non-advised support, this has the potential to become a central pillar of the government’s ‘levelling up’ agenda.”

However, Selby said in order to do this, it will likely require both regulatory and political will, and the Queen’s Speech offers an ideal opportunity for this.

Likewise, Canada Life’s technical director Andrew Tully, said he is expecting a Financial Services Bill within the Queen’s speech that may include announcing reforms to the Solvency II regime. 

“A consultation looking at the Solvency II regime is currently open but if further announcements are made tomorrow which include a loosening of the current system, this may help increase annuity rates,” he said. 

“This would be welcome and would come off the back of annuity rates which have already enjoyed a 20 per cent increase this year to date.”

Retirement policy

Other areas of retirement policy that need to be addressed, according to Selby, is the 2017 review of automatic enrolment which recommended removing the earnings bands, so every pound earned qualifies for a matched employer contribution, and reducing the minimum age from 22 to 18. 

“The government has committed to doing this by the mid-2020s, although this rather woolly ambition has yet to be turned into legislative reality,” he said.

“The government’s proposed solution to the problem of low-earning members of net pay pension schemes missing out on valuable pension tax relief also requires legislation. However, it is not clear either of these issues will be addressed in the Queen’s Speech.”

Similarly, Aegon’s Smith agreed as she said one notable absence will be a pensions bill which is needed to implement the long-awaited 2017 reforms of auto-enrolment. 

“It’s absolutely critical that this is introduced in next years’ Queen’s Speech at the latest to give any chance of the reforms being implemented in the mid-2020s, as originally recommended. 

“These would lead to more people benefitting from auto-enrolment and higher contributions. Delaying this any further could dramatically reduce the chance of the changes taking place this decade.”

Elsewhere, Selby also argued that another area of retirement policy that desperately needs greater government focus is the self-employed. 

“While auto-enrolment has helped boost the number of employed workers contributing at least something to a pension, millions of self-employed workers are entirely excluded.

“If policymakers fail to address this issue urgently then those people will be in serious risk of facing penury later in life.” 

Housing sector

On May 7, the government confirmed the levelling up and regeneration bill would be included in the Queen’s Speech.

Emphasis of the bill, the government said, is on providing local communities with the powers to “revitalise” town centres and create more affordable housing by forcing landlords to rent out commercial properties which have sat empty for a year or more.

However, some in the industry are concerned such a bill could lead to “unsuitable property” being used to house people.

Poor quality or inappropriate conversions are unlikely to be mortgageable.IMLA’s executive director, Kate Davies

Executive director of the Intermediary Mortgage Lenders Association, Kate Davies, said the bill “rather misses the point”. 

“Landlords aren’t willfully sitting on vacant, in-demand properties – it’s more that lockdown disruption and competition from online retailers has severely reduced demand for these commercial spaces,” said Davies

“We understand the urgent need for more affordable housing in many areas, [but] we would caution against unsuitable property being used for this purpose.”

Davies said while it may provide a short-term solution in some circumstances, poor quality or inappropriate conversions are unlikely to be mortgageable, and so will be unattractive to buyers or investors.  

Some reports have suggested the bill will also allow local councils to double council tax on unoccupied second homes – of which there are 253,000 in England, according to government data. 

Chartered financial planner at Quilter, David Gibb, said the speech is likely to expand on a government white paper published in February earlier this year ahead of the bill’s announcement. 

“One of the government’s policies in the paper was that it wanted to make it easier for renters to own their own home, with the number of first-time buyers increasing across the country,” said Gibb.

“Considering house prices are at an all-time high at the moment this may be a pipe dream for now.”

[We're expecting] improvements to the planning system and a new £1.5bn levelling up home building fund.chartered financial planner at Quilter, David Gibb

Annual house price growth remained at double digits in April, the base rate has now risen to 1 per cent from 0.1 per cent over six months, and inflation has hit 7 per cent - far surpassing the Bank of England’s 2 per cent target.

But one commitment in the white paper more likely to feature, Gibb said, is the ‘renter’s reform bill’ which was included in the Tory 2019 manifesto. 

The bill would abolish section 21 orders, which have traditionally given landlords the power to throw out their tenants with eight-weeks’ notice without explaining why.

Another policy mentioned in the paper was to improve the condition of rented homes in order to shrink the number of homes classed as ‘non-decent’ by 50 per cent.

“This is all set to be achieved by a commitment to make improvements to the planning system and a new £1.5bn levelling up home building fund, which will provide loans to small and medium-sized businesses and housebuilders to support regeneration,” Gibb explained.

sonia.rach@ft.com, ruby.hinchliffe@ft.com

What do you think about the issues raised by this story? Email us on FTAletters@ft.com to let us know