The King’s Speech and our capitalist command economy
Valentin Boboc, senior economist, Institute of Economic Affairs said: last week’s King’s Speech offered, among its thirty-five bills, three proposals in some tension with one another which reveal a good deal about our inconsistent approach to growth and economic policy more broadly.
The first is the Regulating for Growth Bill. Firms may be asked to fulfil a Growth Duty, a concept to be defined on a case-by-case basis by ministers issuing strategic steers to industry. It is hard to believe that British regulators are currently under-instructed. If anything, they are over-empowered and operate under statutes that treat process as a substitute for outcomes. The Bill is best understood as a further entry in what Chris Snowdon has termed Britain’s ‘capitalist command economy’: a system in which firms nominally remain in private hands while the state directs, targets and fines them into delivering ministerial priorities. It is therefore hard to see how injecting more ‘everything-ism’ into the economy will help it develop.
The second is the Nuclear Regulation Bill, which legislates the Fingleton Review’s principal recommendations. The review identified several obstacles to developing nuclear energy infrastructure, including fragmented oversight, a culture of defensive decision-making and a regulatory regime that has made Britain the most expensive place in the world to build a nuclear power station. The Bill establishes a Nuclear Commission, designates the ONR as lead regulator and constrains the Protected Landscapes Duty. This is exactly the kind of structural reform that the Regulating for Growth Bill isn’t. Whether ministers extend the Fingleton template to other infrastructure, as they have hinted, is something to watch out for.
The third is the Steel Industry (Nationalisation) Bill, which formalises in statute what £2.5bn of decarbonisation subsidies and the April 2025 special-measures intervention had already made inevitable. After repeated protectionist measures and a gradual, expensive socialisation of losses, the state has decided that adding an unwanted asset to its balance sheet is preferable to endlessly subsidising it. Given that the government has spent years subsidising the supply of steel while legislating away the demand for it by restricting housebuilding and other construction projects, it is hard to see why the taxpayer must now spend a fortune to acquire a liability.
Taken together, the three bills describe a government that knows the supply side matters, occasionally legislates as if it does and just as often legislates as if it does not.