Leasehold reform and measures to increase social housing construction also included as industry welcomes agenda for year ahead
Action to tackle late payments, an upgraded Northern Powerhouse Rail strategy and plans to spur long-term investment in social housing featured in today’s King’s Speech as the government set out its legislative agenda for the year ahead.
This morning’s state opening of Parliament, coming amid heightened pressure on Keir Starmer’s leadership and speculation over an imminent leadership bid by health secretary Wes Streeting, was heavy on policy ambitions affecting the built environment sectors.
Other Bills set to be introduced during the course of this Parliamentary year include legislation to “strengthen ties” with the European Union with plans to cut trading barriers, reduce energy costs with a new electricity agreement and align the UK and EU’s carbon emissions reduction schemes.
Legislation on Northern Powerhouse Rail will amend the existing High Speed Rail (Crewe to Manchester) Bill to outline a proposed route between Manchester and Millington via Manchester Airport.
The first phase of the Liverpool to Leeds line will focus on electrification east of the Pennines, with the second phase proposing a new route between Manchester and Liverpool and a third phase further enhancing links across the Pennines by improving the Transpennine Route Upgrade already underway.
The Small Business Protections (Late Payments) Bill will seek to impose a 60-day maximum payment term in what the government promises will be the most significant legislation to tackle late payments in over 25 years.
It will include “targeted action” on the construction sector to ban the practice of deducting and withholding retention payments under construction contracts and give new powers to the Small Business Commissioner to investigate businesses suspected of conducting poor payment practices, adjudicate disputes between businesses outside of the court process and fine businesses that persistently pay their suppliers late or fail to comply with the legislation.
The policy will enforce an 8% interest rate above the Bank of England base rate for all late payments, introduce a time limit for raising invoice disputes and require boards or audit committees of persistently late-paying large companies to publish commentary on poor payment performance and intended actions to address it.
The Bill will apply to the whole of the UK but only to UK business transactions, not to global supply chains or international trade.
A Remediation Bill will seek to make construction product manufacturers pay for the remediation of unsafe cladding on buildings above 11m in height, and allow developers and contractors to “properly pursue manufacturers, rather than being blocked by technical legal barriers”.
The bill will also include a new legal duty for building owners to remediate, mandate a nationally consistent approach to remediation work and plans for a register of all medium-rise buildings between 11m and 18m requiring remediation.
Measures aiming to increase long-term investment in social housing will seek to provide councils with greater confidence to build by increasing the eligibility requirements for Right-to-Buy to 10 years and exempt all newly built social housing for 35 years.
The speech also included proposals for sweeping reforms to the leasehold system which the government said would “mark the beginning of the end for the feudal leasehold system”.
The legislation will create a new legal framework for commonhold to provide full freehold ownership for flats and a “bespoke approach” to communal living without control by third-party landlords.
It will also cap ground rents at £250 a year, falling to a peppercorn rate after 40 years, and introduce a ban on the use of leasehold for new flats to ensure that in future commonhold is the default tenure for flatted development.
The speech was broadly welcomed by industry bodies with the Royal Institution of Chartered Surveyors praising the government’s focus on the built environment including leasehold reform and remediation measures.
“Delivering on these ambitions will require close collaboration between government and industry, as well as the professional expertise needed to turn policy into practical outcomes,” RICS said.
The Chartered Institute of Building said the speech’s cladding measures “must mark a new turning point for thousands of residents who have spent far too long living in unsafe homes”, with the body also praising plans for action on late payments.
The Chartered Institute of Housing said the speech contained several “important measures” and signalled a “clear intent to improve residents’ security, safety and control over their homes”.
Aecom chief executive Richard Whitehead welcomed the government’s measures on energy and its recommitment to major infrastructure schemes including Northern Powerhouse Rail, the Lower Thames Crossing and airport expansions.
“Maintaining momentum and delivering on existing commitments will be key to driving regional growth across the UK,” Whitehead said.
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