Queen's speech sees embattled May change tack, DUP demands to the fore

In the Queen's speech to formally open parliament, Prime Minister Theresa May's minority government announced an intention to "provide certainty" over Brexit and maintain a "deep and special" alliance with the EU, as well as proposing a review of terror laws, technical education and mental health care.

The Conservative government's various proposals included building more homes, an increase in the National Living Wage, banning of "unfair tenant fees", legislation aiming to reduce motor insurance premiums and a full public inquiry on the Grenfell Tower fire.

The speech, which forms the Conservatives' intended legislative programme for the next two years, to the House of Lords will now be debated in the lower chamber of the Commons with a vote in a week's time.

Weakened after losing the party's parliamentary majority and the need to form a pact with Northern Ireland's Democratic Unionist Party, May dropped the bulk of her Conservative manifesto, including removing the pensions triple lock, the 'dementia tax', means testing winter fuel payments, bringing back grammar schools and relaxing fox hunting rules, with the speech cut back to the bare bones and centred around the eight major Brexit bills that will form the bulk of parliamentary activity over the next two years.

EIGHT BREXIT BILLS

In addition to the 'great' repeal bill that will repeal the European Communities Act and transpose all current EU laws into UK law to ensure continuity as the Brexit process takes place, there seven other bills are a customs bill, an immigration bill, a trade bill, two bills covering agriculture and fisheries, a nuclear safeguards bill and a bill to allow Britain to impose international sanctions.

Said the Queen: "My government will seek to maintain a deep and special partnership with European allies and to forge new trading relationships across the globe. New bills on trade and customs will help to implement an independent trade policy, and support will be given to help British businesses export to markets around the world."

The speech also showed the Conservatives priorities in what is a pared-back legislaitve agenda compared historically.

It mentioned an intention to "strengthen the economy so that is supports the creation of jobs and generates the tax revenues needed to invest in the National Health Service, schools, and other public services", as well as to "continue to improve the public finances, while keeping taxes low". It will spread prosperity and opportunity across the country through a new modern, industrial strategy.

"My government will work to attract investment in infrastructure to support economic growth," the speech read, also referring to plans referring to new investment in electric cars and commercial satellites, plus a bill to deliver the next phase of high-speed rail connecting to link the Midlands to the North West.

May's dementia tax proposals and plans to axe universal free school meals for primary school kids was scrubbed from the Speech, while the Tory manifesto pledge dubbed the 'dementia tax' was replaced with a promise to launch a consultation on proposals to improve social care.

DUP DEMANDS

Reports citing DUP sources noted that much of what figured in the speech was also in the Northern Ireland's party's election manifesto.

The sources told the Guardian newspaper that a 2% spend on defence and the military covenant were "key planks" in the DUP manifesto.

Moreover, Tory manifesto pledges on means testing winter fuel payments and removing the triple lock on pensions were absent from the speech, with the DUP having been vocal in their intention to oppose them.

Sources in Westminster told the BBC the Northern Irish party had also asked for £1bn investment in health and another £1bn for infrastructure as part of any pact to give the Tories a vote-by-vote parliamentary majority.

The DUP have also focused on giving NI cities more economic powers and about a possible scrapping of air passenger duty, according to "sources close to the talks", though this has been one measure that has stirred resistance from the Treasury.

REACTION AND ANALYSIS

Business leaders were broadly pleased by May's new tack, with the CBI director-general Carolyn Fairbairn saying: “It’s good to see that the recent heatwave has warmed the Government’s view of business and its contribution to people’s lives. But this welcome change in tone needs to be backed by clarity and action now. Firms will expect all politicians to put pragmatism before politics, starting with Brexit."

On the immigration bill, the British Chambers of Commerce's DG Adam Marshall said: "While businesses accept the need for controls over migration flows, they want clear assurances that they will be able to recruit from overseas to fill vacancies when they are unable to find or train suitable candidates here at home. After Brexit, they will also want to see a flexible system for the movement of labour and skills between the UK and the EU that enjoys clear public support."

Len McCluskey, general secretary of Unite, the country's largest trade union, was pleased the speech saw much of the Tories' manifesto binned but said it felt "more an attempted lifeline for Theresa May than offering the meaningful life changes the people of this country need".

He bemoaned lack of reference to the public sector pay cap and said the draft bill on letting fees merely saw the issue "kicked into the long grass" rather than providing "early, much-needed respite for hard pressed renters".

Manufacturers were mostly impressed, with Terry Scuoler, chief executive of the EEF trade body, saying the speech had "moved some way" to providing signs that the government is listening to industry's concerns over Brexit but said more information needed to be provided and quickly.

"We need to hear more from the PM that she is pressing for tariff-free trade, minimising uncertainty over customs and that companies will be able to employ the people with the range of skills they need, from the UK, Europe or elsewhere.

Many questions still remain unanswered, Scuoler added, calling for a much closer partnership with industry "to avoid economic chaos when we leave the EU" and calling for "concrete plans" on how the government plans to deliver its commitment to strengthening the economy with a modern industrial strategy, help for exports and investment in infrastructure.

Maike Currie, investment director at Fidelity International, said the speech was more notable for what it didn’t include, than what it did: "Glaringly absent were plans around the triple lock on pensions. Unsurprisingly, one of Theresa May’s few controversial policies - the banning of letting agent fees got a prominent showing with the Queen saying proposals will be brought forward to ban unfair tenant fees, promote fairness and transparency in the housing market, and help ensure more homes are built.”

Currie said a standout part of the Queen’s speech was the announcement that the government will continue to tackle the gender pay gap.