King’s Speech

Lord Sharpe of Epsom Excerpts

Thursday 14th May 2026 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I shall start on an area that was largely ignored in the King’s Speech. Unfortunately for small businesses across the country, the King’s Speech offered very little.

Business groups had once again urged the Government to use the King’s Speech to address the long-standing iniquity of business rates, a reform the Government themselves promised in their manifesto but have not delivered. The shops, the pubs, the restaurants, the cafés, the leisure venues and the small firms that sustain our high streets are still waiting: what they see in the meantime is not relief but further layers of administrative obligation.

Of course, we acknowledge and tentatively welcome the late payments Bill, and we look forward to reading it closely, but the devil will be in the detail. To be factually accurate, that is counterbalanced by other things such as the overnight visitor levy Bill, which is more properly and commonly known as the holiday tax. That has already been rejected, publicly and forcefully, by hundreds of business leaders across the hospitality, tourism and leisure sectors, who understand that it would lead to fewer visitors, higher prices, lower margins and the gradual erosion of local economies that depend on domestic tourism for their vitality. How does that generate growth? We look forward to further scrutiny on it.

Under this Government, businesses have been taxed more heavily in their decisions to hire, regulated more extensively in how they operate, and treated less as partners in national recovery than as convenient sources of revenue and targets for political demonstration. Unemployment, including the particularly troubling matter of youth unemployment, as my noble friend Lady Finn pointed out very powerfully, has continued to rise during this Government’s tenure, and one might ask how it was ever supposed to be otherwise when the cost of taking on an additional employee was raised as a matter of deliberate policy. While the Prime Minister is occupied with fighting members of his own Cabinet for possession of his job, young people are finding that there are no jobs available to them.

The Government’s response to a weakening labour market has been to pass the Employment Rights Act, imposing billions of pounds of additional burdens on employers who were already navigating an exceptionally difficult environment. We were told, with some confidence, that this would empower workers, yet many of the new entitlements it creates cannot in practice be realised at all, because the tribunal system is so overwhelmed that claimants face delays of such length as to render their rights, in any functional sense, illusory. Workers do not win; businesses, who bear the cost and uncertainty regardless of outcome, do not win; the beneficiaries, if there are any, tend to be the trade unions, whose institutional strength is enhanced by precisely this kind of legislation, and whose leadership is at this very moment preparing to bring down the Prime Minister and bring further disruption to London through Tube strikes that will harm the small businesses and hospitality venues that have already endured more than enough.

I turn to the Government’s proposed competition reform Bill. Superficially, we should welcome this, but on close reading we see the Bill’s precis states:

“Market reviews can take over three years. The Bill will speed these up so that when markets are not working properly, such as when consumers face high prices or businesses face barriers to entry, competition problems are identified and addressed more quickly”.


Neither high prices nor barriers to entry necessarily signify that markets are not working properly; in fact they can signify precisely the opposite. So we should be concerned by the suggestion that market reviews should be accelerated whenever consumers face high prices or businesses face barriers to entry.

As we read it, the proposed removal of the independent CMA panel in phase 2 investigations risks reducing the independence of decision-making and increasing the potential for political influence over competition cases. So I ask the Minister a precise question: what safeguards will ensure that decisions remain independent of Ministers? Is it not the case that, in many sectors, high prices are caused not by a lack of competition but by the direct consequences of this Government’s policies? Businesses are facing higher employment costs, higher employer national insurance contributions, increased regulation, rising compliance burdens and, as my noble friend Lord Lilley mentioned in his brilliant speech, the highest energy costs in the OECD. In those circumstances, prices may rise because firms are trying to survive the costs imposed on them. The Government must be careful not to punish businesses in haste for pressures that Ministers themselves have helped to create.

The same applies to barriers to entry. Often, those barriers are the result not of private market abuse but of public policy: higher labour costs, tax burdens, licensing requirements, planning restrictions and regulations that make it harder for new firms to enter a market. If the Government genuinely want more competition, they should begin by examining the burdens they place on enterprise.

High prices can be a signal that supply is insufficient and that new entrants have an opportunity to compete. Over time, that increased supply can place downward pressure on prices. That is, incidentally, an experiment that the Government should try with oil and gas. If regulators rush to intervene before market forces have had the chance to work, they may distort the incentives, deter investment and produce unintended consequences. Faster reviews are not necessarily better reviews; the test should be whether they are fair, proportionate and properly grounded in an understanding of how markets actually operate.

I turn to the regulating for growth Bill. Like my noble friend Lady Penn, the first thing that I would recommend is that the Government change the name of this Bill, because you cannot regulate your way towards growth. We of course want to see further innovation in the UK, in particular with emerging technologies and AI. But, looking at the proposed AI sandboxes in this Bill, I shall ask a couple of questions. Will the Government tell us how they will maintain the UK’s high-standard IP and copyright protections, including within the AI sandboxes? Following on from my noble friend Lord Frost’s comments, how do the AI sandboxes square with the reset? As we have heard, the European Union is not as far advanced when it comes to AI as we are.

Yesterday, I read an economics brief that is widely respected in the City. It concluded by saying that

“the smaller structural reforms—on housing, employment, transport, pensions and minimum wages—have been unequivocally damaging to economic growth”.

That is what the markets think, which is why they are charging us the highest interest rates since 2008. I venture to suggest that nothing in the King’s Speech will change that. What a very sad indictment of this Government’s growth agenda.