REPORT

Public Affairs Update:

The Law Society of England and Wales

The Law Society’s public affairs and campaigns team is at the heart of our work influencing the government, parliament, and key stakeholders in the UK. We are pleased to provide the following update on the latest developments.)

Spring Budget

The Chancellor of the Exchequer, Jeremy Hunt, presented the government’s Spring Budget to Parliament on Wednesday 6 March 2024 which made plans to address inflation and grow the economy. The Law Society submitted recommendations to the government on how the spring budget could be used to maximise the economic value of legal services.

Most of the measures included in the budget had been previously leaked or speculated, leading to analysis that there might be another fiscal announcement before the next general election. Hunt stated that due to the government’s emphasis on fiscal responsibility, “permanent cuts in taxation” could be implemented.

The chancellor followed through on these rumours by cutting employee national insurance contributions by 2% from 10% to 8% and self-employed national insurance contributions to 6%.

On justice, the government committed £170million to deliver what it calls “a justice system fit for the modern era”. This includes several investments into different aspects of the system. Firstly, £12million is being invested in expanding legal aid to encompass early legal advice in private family law proceedings for parties considering an application to the family court for childcare arrangements. The government also committed to investing £10million into the Crown Prosecution Service (CPS) to digitise jury bundles in the criminal courts, reducing paper wastage and unnecessary trial delays. Meanwhile, £55 million is being channelled into family courts to offer online targeted guidance and earlier legal advice to shorten wait times and support families through non-court dispute resolution.

There are also plans to introduce a new online information and guidance tool to support earlier resolution of family disputes and divert cases away from the family courts, where appropriate. The

tool will help families navigate the range of options available by suggesting suitable interventions based on need and provide early legal advice. Lastly, the government wants to improve the experiences of the courts for victims and survivors of domestic abuse through the Private Law Pathfinder Pilot. This scheme will identify needs earlier and provide specialist support to victims and survivors of domestic abuse.

Elsewhere, the chancellor announced measures to strengthen the regulatory framework for the tax advice market and plans to increase the Economic Crime Levy from £250,000 to £500,000.

A £7.4 million upskilling fund pilot was announced to support small businesses develop AI skills of the future, which will complement the SME Digital Adoption Taskforce that is due to launch soon. The pilot has a focus on professional services with less than 260 employees, and we would encourage our members who fall within this category to consider participating and express their interest in the pilot. The government is also extending the Recovery Loan Scheme, which offers a 70% government guarantee on loans to SMEs of up to £2 million in Great Britain and £1 million in Northern Ireland, to the end of March 2026. The government also announced an extension to the full expensing scheme with extra targeted support for small businesses.

The government also announced initiatives within the property sphere, aimed at boosting long-term rentals, streamlining inheritance tax procedures, and refining housing investment strategies. To encourage landlords to sell properties, the government is reducing the higher rate of capital gains tax from 28% to 24%, with hopes that this will increase availability for buyers, especially first-time homeowners. From 1 April 2024, personal representatives of estates will no longer need commercial loans to pay inheritance tax before probate, easing financial burdens and hopefully expediating the process. Lastly, the Government is abolishing the Multiple Dwellings Relief after evidence that the scheme has not had the desired effect of boosting private housing investment.

Key bills moving through Parliament

There are several bills of note making their way through Parliament. Firstly, the Safety of Rwanda (Asylum and Immigration) Bill which seeks to respond to the Supreme Court’s judgment from last year on the legality and lawfulness of the Rwanda deportation scheme by asserting that Rwanda is a safe country. The Law Society has questioned the workability and compatibility of this bill with core tenets of the rule of law and have continued to work with peers since it entered the Lords to formulate and lobby for amendments. The bill had its third reading in the Lords on 12 March, before heading into “ping pong”, where the Commons and the Lords will vote on whether to accept the others’ amendments. We will be pushing hard to ensure amendments are taken forward to mitigate some of the worst impacts on the rule of law and access to justice.

Post Office (Horizon System) Offences Bill looks to quash the convictions of those affected by the scandal, particularly those whose convictions were made off the basis of flawed evidence by the Post Office in relation to the Horizon system. This is an exceptional step, with the government making a clear intervention in the court process. The Law Society have welcomed the move in this instance but have been clear that this exceptional circumstance cannot set a precedent for further interventions.

The second reading of the Leasehold and Freehold Reform Bill in the Lords will be on 27 March 2024. This bill implements commitments to take forward many of the leasehold reform recommendations made by the Law Commission in its 2020 reports. The bill is the second part of a legislative package to reform leasehold law and follows the Leasehold Reform (Ground Rent) Act 2022. We want the leasehold system to operate fairly for leaseholders and not cause delays in the home buying and selling process, and support the general commitment in the bill to make it cheaper and easier for existing leaseholders in houses and flats to extend their lease or buy their freehold.

The bill delivers on the government’s commitment to ban the sale of new leasehold homes, a move we support. We welcome proposals to require more transparency for both financial and non-financial information provided on leaseholders’ service charges. Providing these in a standardised format for service charges is a useful step, and the information should be offered in ways that are both accessible and easily understandable for consumers. We support the proposals to create more transparency and regulation in relation to estate management; would support maximum fees for home buying and selling services provided by managing agents/freeholders, with some caveats; and would support the aim to cap unfair ground rents.

The proposals in the bill would make it easier for solicitors and conveyancers to provide transparency when consumers are looking to establish the costs involved in their purchase. Please see our Parliamentary Briefing on the bill submitted during the Committee Stage, House of Commons, 18 January 2024. ■