Following on from our blog post on the Labour manifesto (Life under Labour: UK regulation on the rise?), we outline key regulatory takeaways from the King's Speech.
Last week, as Labour continued to settle into government, 40 new bills were announced in the King's Speech. Overall, the speech and its accompanying briefing notes (available here) are in line with the promises set out in Labour's manifesto. They do, however, provide a helpful indication of priorities, and in some cases, further details of what manifesto promises could look like in practice.
As anticipated, there continues to be a focus on increased regulation, with some regulators being given stronger powers, and in the football sector, we see the introduction of a new regulator altogether.
On water, Labour were open in advance of the election, including in their manifesto, about their plans to strengthen Ofwat's powers. New powers will be included in the Water (Special Measures) Bill, including: to block bonuses for water and sewage company executives if environmental standards are not met; to require companies to install real-time monitors at every sewage outlet and report data to Ofwat for independent assessment; and to introduce "automatic and severe" fines. There will be a new code of conduct for water companies "so customers can summon board members and hold executives to account", and water bosses will face criminal liability for law-breaking. There is limited information currently on how all of this will operate in practice.
The Digital Information and Smart Data Bill offers insight into how the new Government proposes to tackle the regulation of tech and AI. There are plans to reform the role of the Information Commissioner's Office, giving it "a more modern regulatory structure, with a CEO, board and chair" as well as stronger powers to ensure data is adequately protected.
Under the Cyber Security and Resilience Bill, existing regulators may be given increased resources to deal with cyber security issues through the introduction of cost recovery mechanisms, and powers to proactively investigate potential vulnerabilities. It is currently unclear which regulators specifically will be covered by these proposals, but based upon current cyber security regulations, it appears as though they could include those operating in the transport, energy, drinking water, health and digital infrastructure sectors.
Changes in the area of corporate governance will see the Financial Reporting Council become the Audit, Reporting and Governance Authority: a new regulator with statutory footing and the power to investigate and sanction company directors for failings relating to financial reporting and audit responsibilities. A new regime will be introduced to oversee the audit market and address conflicts of interest at audit firms.
A new Independent Football Regulator will be set up primarily to ensure the financial sustainability of football clubs across England. The regulator will also act as an approval authority for stadium sales and relocations. Clubs will be required to meet a minimum standard of fan engagement before making significant changes to club branding and colours.
Finally, the new Government has confirmed its intention to align product regulations with the EU. EU product regulations continue to apply in Northern Ireland (which remains part of the EU single market) under the Windsor Framework. If passed, the Product Safety and Metrology Bill will give Government specific powers to make changes to GB legislation to avoid divergence with the EU where it is in the UK's interests to do so. The bill also provides for "greater sharing of data between regulators and market surveillance authorities" with a view to tackling non-compliance with product regulation.
Next Steps
Whilst the King's Speech provides a helpful steer on the new Government's immediate priorities, it will be the detail underpinning each of these proposals which is key. Ultimately, it will not be until the publication of draft legislation that we understand the full picture of planned measures and how they are to be achieved. Some bills have already been presented to Parliament, for example the Budget Responsibility Bill and the Passenger Railway Services (Public Ownership) Bill, whereas for other bills, this could be months down the line.
In the meantime, there may be opportunities to provide input as these measures take shape. The Draft Leasehold and Commonhold Bill, for example, makes reference to consulting on updates to the legal framework around commonholds and on measures to implement new protections for homeowners on private estates, and the Football Governance Bill commits to developing a "Football Club Corporate Governance Code" in consultation with industry.
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The articles published on this website, current at the dates of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.