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Shoosmiths LLP 

May, 2021 - Milton Keynes, England

 

Experts from leading UK law firm Shoosmiths comment on Queen’s Speech

 

Today the Queen’s Speech set out the government’s agenda for the next session and its plans to build back better from the pandemic and level-up opportunities across the country. The speech contained reference to more than 30 Bills, some of the most prominent of which experts from leading law firm Shoosmiths have commented on, below:

Paula Swain, head of the Solent office for Shoosmiths, is also a Director with the Solent LEP and was part of the Solent Freeport taskforce which was successful in its bid, commented on the tax breaks for employers based in the eight soon to be established Freeports:

“It is hoped that the National Insurance Contributions Bill will offer incentives for employers in the planned Freeports, and will help to drive the ambition of my local planned Freeport (Solent) for the creation of thousands of skilled and semi-skilled jobs adjacent to communities in Portsmouth, Southampton and Gosport where there is some of the highest deprivation.”

Kate Garcia, a principal associate in the tax team also welcomed the announcement, but added:

“It is expected that the Bill will contain relief from employer national insurance contributions for employers operating in one of the Freeport tax sites from April 2022. The Freeport Bidding Prospectus had indicated that a 0% rate would be applicable on the salaries of any new employee working within a Freeport tax site for up to three years per employee on earnings up to £25,000 per annum. This is expected to be available until at least April 2026 with the intention to review the relief and potentially extend it for up to a further five years to April 2031. As with any tax relief, the devil will be in the detail, but this is nonetheless another positive step on the route to the introduction of the Freeport tax sites.”

Alex Bishop, Co-head of the Birmingham office and head of dispute resolution and litigation, said of levelling-up: 

“I had expected to see more detail on the levelling up agenda, but note that ‘The government will be publishing a Levelling Up White Paper later this year, "setting out bold new policy interventions to improve livelihoods and opportunity in all parts of the UK".’ We will have to wait until then to see what is proposed in its entirety.

“In addition, West Midlands Mayor Andy Street has called on Whitehall to hand over more funding and decision-making powers to local leaders – and I think this allows the regions the autonomy to focus on what they consider to be their respective priorities rather than have imposed investment decisions reflecting perceived needs by those in Whitehall. There will be commonality with some issues (such as addressing the skills gap, desperately needed in the West Midlands and across the country) but in many cases, a ‘one size fits all’ approach will not achieve a true levelling up agenda.

“More broadly, I feel real effort is needed to engage not only with politicians in the region but also with businesses and local communities to hear directly from them the challenges they are facing. Each region has a different story to tell and those stories need to be heard in Whitehall. The advent of video conferencing allows access and makes direct communication possible – and would urge those in London shaping policy to reach out virtually, if not in person!”

On that theme of Levelling Up, Deborah Gordon Brown, head of Shoosmiths’ Nottingham office, who also advises on complex transactions and portfolio acquisitions and disposals for major UK property funds, landlords, portfolio holders and occupiers cautions that it’s not all about HS2:

“Addressing connectivity between the regions as well as between London and the regions will require a clear focus and investment strategy as well as a much more granular analysis of regional inequalities looking at matters such as health, skills training and education as well as infrastructure investment. The Midlands Engine which includes seven rail projects, is vital in improving links across the whole of the Midlands (mainly east to west) and to ensure future growth.

“This will certainly include including HS2, but Nottingham’s Island Quarter, Derby’s Becketwell scheme and Leicester’s Space Park, as well as the Freeport centred on East Midlands Airport will be equally important. We only have to look to the success of the Northern Powerhouse to see how collaborative working within the regions can bring about success and the challenge will now be to ensure that it all works together to ensure that the various initiatives set out by Midlands Connect are realised.”

Nichola Jenkins, a legal director in the firm’s business advisory division specialising in intellectual property, commented on the Advanced Research and Invention Agency Bill:
“The UK government announced in July 2020 its ambition to increase spending on R&D activities to £22billion by 2024/25.

“The minimum £800m funding to be allocated by the Advanced Research and Invention Agency is part of this spending commitment, and will be particularly welcomed  by universities, research organisations and companies involved in “blue-skies” research (ie research which does not have an obvious and immediate application in the real world, but does have the potential to be ground-breaking).

“The high-risk nature of blue skies research means that a number of projects funded through the new agency will undoubtedly fail. However, there is the potential for the outcome of even a small portion of this research to really disrupt the scientific and technological landscape.

“The research supported by the new agency could therefore be incredibly important in leading the way for more focussed research projects to change and improve the way we live.

“We will be interested to see how the new the agency will direct the funding towards key sectors, and inspire the forward-thinking innovators within those sectors.”

James Wood-Robertson, head of Shoosmiths Infrastructure & Energy sector, added:

“The Advanced Research and Invention Agency may well help to realise innovative solutions hinted at in the government’s Energy White Paper, but not fleshed out in any detail in the Budget, in power generation, carbon capture and storage and hydrogen. It seems reasonable to speculate that support for many Cleantech solutions will feature in its portfolio.  Technological innovation plays a vital role in achieving net zero targets, but many potential resources, such as wave and tidal energy, require an engineering rather than a technological breakthrough if they are to meet some of the UK’s electricity needs cost-effectively.”

Michelle Craven-Faulkner, partner specialising in the rail sector said of the High-Speed Rail (Crewe-Manchester) Bill:

“The introduction of the new HS2 Bill to extend the rail line from Crewe to Manchester will be welcomed as an infrastructure project of this scale will bring work to many businesses. The timeline for delivery will be of keen interest, as will the scope of the procurement and whether it encapsulates some of the thinking set out in the procurement green paper published earlier this year. The rail industry has clearly and significantly been impacted by COVID and still awaits the much anticipated ‘Williams-Shapps Plan for Rail’, but this proposed Bill is an indication that rail remains high on the government’s agenda and can only serve to cement the role that rail can play in the levelling up process.”

Bob Pritchard, legal director in Shoosmiths’ planning team comments on the Planning Bill:

“In his introduction to the 2020 ‘Planning for the Future’ White Paper the Prime Minister put the blame squarely on the current planning system for providing ‘nowhere near enough homes in the right places’.

“The Planning Bill announced in the Queens Speech will include proposals for a new regime ‘that is simpler, clearer and quicker to navigate, delivering results in weeks and months rather than years and decades’. If the proposals in the White Paper come to fruition, the biggest break with the past will be a move away from a planning system based on discretionary decision making to one which incorporates codified zonal planning. Under what will still be a plan led system, local planning authorities will be required to promote simplified local plans zoning land in their areas for “growth”, “renewal” or “protection”.

“Growth areas will be those suitable for substantial development, and where outline approval for development would be automatically secured for forms and types of development specified in the Plan. Renewal areas will suitable for some development, such as gentle densification. Development will be restricted (but not precluded) in protected areas. Consultation on the White Paper resulted in the region of 44,000 representations so the Bill may well have a difficult journey through the legislative process.

Bob continues to comment on other bills proposed: “Measures to rebalance the economy in the UK by seeking to boost income and productivity outside the South East also feature in the Queens Speech. These include renewed commitments to major infrastructure with new powers announced to build and operate the next stage of HS2. Legislation is also mooted that will take forward the proposed designation of the eight new English Freeports announced in the March Budget. This will include tax incentives to be included in a National Insurance Contributions Bill.

“Following the ending of the EU state aid regime in December 2020, a Subsidy Control Bill will include a new set of rules regulating government support for private companies.

“If levelling up is to be achieved in practice it is essential that government works effectively with the newly elected Metro Mayors and the devolved administrations.”

Jennifer Clarke, a senior associate in the firm’s commercial team specialising in public procurement and state aid, comments on the Subsidy Control Bill:

“This announcement is merely the next logical step after the EU-UK Trade and Cooperation Agreement effectively brought an end to state aid and a new regime of subsidy control had to come into effect. The government closed consultations at the end of March and Shoosmiths responded to the relevant Green paper on this. We, like many others, would welcome sight of what is actually proposed, but as ever, the devil will be in the detail.”


 

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