British Budget Mixes Pro-Business, Populist Measures

Britain’s ruling Conservative Party wants to enact businessfriendly policies and also appeal more to workers.

Queen Elizabeth II of the United Kingdom in London, England, June 4, 2014
Queen Elizabeth II of the United Kingdom in London, England, June 4, 2014 (Michael Garnett)

In its first budget since winning reelection last month, Britain’s Conservative Party announced a series of pro-business measures as well as policies that it hopes will help it appeal more to middle- and working-class voters.

Queen Elizabeth II read out the government’s legislative proposals for the upcoming year in Parliament on Wednesday.

The Queen’s Speech came only weeks after the Conservatives unexpectedly won a majority of seats in the House of Commons in a general election, allowing them to govern without the centrist Liberal Democrats.

Among the business-friendly measures the Conservatives were unable to pass in the last five years were rules to make strikes more difficult and another push to cut regulations for companies.

But in what commentators saw as a sign of Prime Minister David Cameron’s determination to broaden his party’s support, the monarch also announced an increase of the income tax threshold to £12,500 per year, tougher immigration rules, higher childcare subsidies and policies to improve underperforming schools. Such policies are more popular with traditional Labour voters.

The speech’s signature proposal was a triple “tax lock” that would legally prevent the government from raising income or sales tax or national insurance contributions.

The Financial Times reported that such a law would leave “almost no scope for changing the structure of the three biggest taxes to bring more money into the exchequer; for example, by aligning the national insurance paid by the self-employed with the higher rates paid by employees.”

The newspaper also said that despite the more pro-business orientation in Westminster, employers were disappointed by a proposal to raise levies on those hiring foreign workers. The revenue would be used to fund an apprenticeship program for young workers from Britain and other European Union member states.

A cap on household benefits would also be reduced from £26,000 to £23,000 to help pay for three million apprenticeships.

New rules for industrial action would require unions to secure the support of at least 40 percent of their members, with at least 50 percent turnout, before calling a strike.

Sajid Javid, the new business secretary, says he wants to cut regulations worth £10 billion per year for businesses.

The queen also reiterated Cameron’s proposal to call a referendum on Britain’s membership of the European Union — after he has concluded negotiations with other leaders on weakening the nation’s bonds with the continent.