Cameron Puts Bank, Labor-Law Overhauls at Top of Program

U.K. Prime Minister David Cameron put overhauls of the banking system, employment law, the electricity market and pensions at the heart of his legislative program for the coming year.

Queen Elizabeth II, Britain’s head of state, read out to Parliament in London today a speech listing 31 proposals that the Conservative-led coalition government will seek to make law. Cameron may face the greatest opposition from lawmakers over proposals to overhaul the House of Lords, the upper chamber of Parliament, and to give more powers to the security services to monitor electronic communications.

“My government’s legislative program will focus on economic growth, justice and constitutional reform,” the 86- year-old monarch told members of both chambers of the legislature. “My ministers’ first priority will be to reduce the deficit and restore economic stability.”

Cameron is looking to shift attention away from his worst electoral setback since taking office two years ago. His Conservative Party and their Liberal Democrat partners lost hundreds of seats to the Labour opposition in municipal polls on May 4, triggering renewed tensions in the coalition.

‘Global Storm’

“We have already made some tough choices and we will continue to make sure we keep spending down so, unlike others in Europe, families can benefit from low interest rates and Britain is protected from the global storm,” Cameron and his Liberal Democrat deputy, Nick Clegg, said in a statement.

The Treasury plans to implement in full recommendations of the Independent Commission on Banking by 2015, a spokesman for the department headed by Chancellor of the Exchequer George Osborne said before the monarch outlined the government program.

The solution proposed last year by the panel led by former Bank of England Chief Economist John Vickers is for banks to build firewalls between their consumer and investment operations and boost the amount of loss-absorbing equity and debt they hold to between 17 percent and 20 percent. Osborne intends the legislation to take effect no later than 2019.

The queen outlined proposals to let employment tribunals have judges rule on dismissals without lay magistrates, in order to speed up cases. The same bill will have the scope to introduce rules to limit the pay of senior executives, though no specific measures were included today.

Other aspects to the bill include the creation of the Green Investment Bank to channel money to clean energy projects and cutting government inspections of businesses.

Energy Bill

The Energy Bill aims to overhaul Britain’s electricity market to spur the 110 billion-pound ($175 billion) investment the government says is needed to create new, low-carbon energy. Proposals include the creation of a price support for such energy, measures to prevent the construction of the most polluting coal-fired plants and the creation of a nuclear-energy regulator.

The Pensions Bill will introduce a single-tier pension to complement the basic, means-tested pension and increase the retirement age to 67 from 65 by 2028. A separate bill for public-sector pensions will make those workers save more for retirement and align the pension age with the private sector.

Reform of the House of Lords, currently unelected, was among the main proposals. The push for an elected upper chamber, a key objective for the Liberal Democrats, is opposed by many Conservatives who say it should not be a priority at a time of economic crisis.

The premier and his deputy said the introduction of directly elected peers would make Parliament more representative and get peers to “answer to the people.”

‘Smidgen of Democracy’

Clegg said yesterday he saw no reason why the government should not pursue the measure alongside other objectives such as helping the low paid.

“A smidgen of democracy I don’t think will go amiss, since we’ve been talking about it for about 100 years,” Clegg said.

The Draft Communications Data Bill may also antagonize civil-liberties groups and Liberal lawmakers in the coalition who may oppose Cameron’s plans to give security forces powers to collect and store data from social media and other new forms of communications.

The pageantry of the Queen’s Speech began at 10 a.m., when the Yeomen of the Guard, the Royal bodyguards known as “Beefeaters,” searched the cellars of Parliament. The tradition dates back to 1605, when Guy Fawkes attempted to blow up the building and King James I with it.

Royal Standard

The queen then traveled by horse-drawn coach from Buckingham Palace to the Houses of Parliament, escorted by the Household Cavalry. As she arrived, the Union Flag of the U.K. was lowered and her Royal Standard raised over Parliament.

The official who has the title Yeoman Usher of the Black Rod marched to the House of Commons, the lower, elected, chamber. His job was to summon lawmakers to hear the queen, who was waiting in the House of Lords. The door of the Commons was slammed in his face.

This ritual symbolizes the independence of the Commons from the Crown: no British monarch has entered the lower house since 1642, when King Charles I tried to arrest five members in the run-up to a civil war that ended with his execution in 1649.

After “Black Rod” knocked on the door of the Commons, lawmakers processed to the House of Lords. Seated on a gilded throne next to her husband, the Duke of Edinburgh, Queen Elizabeth read the speech from a goatskin parchment.

To contact the reporter on this story: Gonzalo Vina in London at gvina@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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