The Queen's Speech: did you miss anything?

The main proposals for businesses to be aware of from the Queen's Speech are as follows:

• Cutting red tape: The Queen's Speech contains a number of measures in areas which are intended to cut red tape and allow businesses to make savings;  of particular note are the proposals relating to financial services, data protection, public procurement and retained EU law.  However, for reasons explained below, substantial benefits are often difficult to deliver in practice.  See section 3.
  
  
• Planning and levelling up: The Government plans to make a number of changes to the planning regime, intended to boost local growth although overall these are likely to fall short of the radical overhaul that some have called for – see section 4.  Meanwhile, an Infrastructure Bank with a £22 billion budget is being established to support "under-invested areas".
  
  
• Business rates and residential property: The Government is proposing reforms to the existing business rates regime (see section 5), together with new protections/rights for tenants in the residential property sector (see section 6).
  
  
• Net zero, energy and climate change: The proposals in this area suggest a shift in focus towards energy security, perhaps reflecting current Government concerns about the adverse economic impact in the short to medium term of certain measures designed primarily to meet net zero targets – see section 7.
  
  
• Online harms: The Online Safety Bill will introduce a new regulatory framework for a range of online businesses including social media platforms, internet marketplaces, online forums and search services.   See our briefing from August 2021.
  
  
• Consumer law and competition regulation of "Big Tech": the draft Digital Markets, Competition and Consumer Bill will give the UK Competition and Markets Authority (CMA) new powers to (i) enforce consumer law; (ii) regulate the market behaviour of large tech firms; and (iii) enhance competition law enforcement.
  
  
• Audit reform: the draft Audit Reform Bill will provide a new regulatory framework for auditors, following criticism of their role in a number of high profile business failures.
  
  
• Supply chains and modern slavery: The Government intends to strengthen protection and support for victims of human trafficking and modern slavery, as well as increasing the accountability of organisations in driving out modern slavery from their supply chains. See our full briefing on this measure.

With any Queen's Speech, there are always going to be measures which do not make the final cut, mainly because the Government only has a finite amount of time in which to get its legislative programme through Parliament.  That said, there were reports this year of a number of Government Departments jockeying to have their proposals included;  as a result, there were several notable omissions in this Queen's Speech, despite previous Government commitments to legislate:

• Employment Bill: In 2019, the Government said it was planning to introduce an Employment Bill which would (among other things) include measures on flexible working, extended redundancy protection for mothers, paid neonatal leave, unpaid carers' leave and additional rights for zero hours workers.  Following the pandemic, it was widely anticipated that the Bill would come back on the agenda in 2022 – but it did not appear in the Queen's Speech at all, even as a draft Bill. 
  
  
• Pension superfunds: In winter 2018/19, the government proposed a statutory authorisation and regulatory regime for defined benefit consolidator pension schemes, also known as 'superfunds', but no legislation in this regard has been announced.  In the meantime, there is Pensions Regulator guidance for (a) those setting up and running such a scheme and (b) scheme trustees and employers considering a transfer to one.

The Northern Ireland Protocol

Legislation allowing the Government to amend the Northern Ireland Protocol to the Brexit Withdrawal Agreement unilaterally was not included in the Queen's Speech, but has since been published, along with explanatory notes, the Government's legal position and the UK's latest proposals.  A number of commentators have expressed scepticism about the Government's argument that the concept of "necessity" under international law is sufficient to justify the legislation, which would effectively disapply large parts of the Northern Ireland Protocol to the Brexit Withdrawal Agreement. 

We discussed last year how the EU might react to the UK adopting a tougher stance on the Northern Ireland Protocol and in particular, whether it would be likely to suspend or terminate the UK-EU Trade and Cooperation Agreement.   Whilst the EU's position is that the Protocol is not up for renegotiation, it published extensive proposals in October 2021 setting out potential changes on detailed implementation.

A key theme of the measures designed to cut red tape is that they all target areas which were largely regulated by EU law – notably financial services, data protection, public procurement and other areas of retained EU law.  However, it remains to be seen whether these changes will allow businesses to make material savings, particularly where there is a need to comply with both EU and UK regulations (and where divergence from EU regulations may therefore have the opposite effect).

Data Reform Bill

The Queen's Speech confirmed that we can expect a new Data Reform Bill in the summer, but told us little else about the extent of the reform – as with the financial services legislation (see above), this will only become apparent when the initial text of the Bill is published.  The key themes set out in the accompanying Briefing Notes, i.e. shifting the emphasis of the UK's data regime to become more "outcomes-focused" and reducing the burden on UK businesses, facilitating responsible innovation and research and modernising the ICO, all appear to be consistent with proposals published by the Department for Culture, Media and Sport in September 2021 in its consultation document entitled "Data: a new direction" (which we previously wrote about here).  The key questions are:

• Will the new law seek to sweep away all of those GDPR measures that have been identified as overly burdensome "box-ticking" requirements, such as the data protection impact assessments, the obligation to appoint a DPO, the legitimate interests balancing test and the low threshold for data breach reporting?
  
  
• How burdensome will any new measures (such as the proposed "privacy management programmes") prove to be in practice? In particular, businesses which have already invested heavily in implementing procedures to comply with the existing GDPR regime may find that adapting to the new regime imposes additional costs.
  
  
• Will the reforms prompt the EU to consider withdrawing its data adequacy decision in respect of the UK, which currently allows the free flow of personal data from the EEA to the UK? Lose that and UK business will have a significant additional compliance burden to contend with in order to process EEA personal data.

Brexit Freedoms Bill

Alongside these reforms, much has also been made of the Brexit Freedoms Bill, which will – among other things – give Ministers "fast track" powers to change retained EU law.   The Government has suggested that this could help to achieve potential savings of £1 billion, but as we noted in our briefing when the Bill was first announced earlier this year, this is likely to prove challenging to deliver in practice. 

The Levelling Up and Regeneration Bill contains a range of measures to boost local growth and regeneration, building on the Levelling Up White Paper published in February this year.  It also draws on some of the ideas in the Planning for the Future White Paper (August 2020) to the extent that they support the current approach to Levelling Up.  The changes relating to the planning process are of particular note from a business perspective.

Localism and increased democracy in the planning process

The Bill aims to improve the planning process, to give local communities control over what is built, where it is built, and what it looks like, and so create an incentive to welcome development provided it meets the standards which are set.  Key proposals include:

• Accelerating devolution by allowing "combined county authorities" of county councils and unitary authorities, and more democratically-elected mayors.
  
  
• Parish councils and neighbourhood forums will produce a simpler ‘neighbourhood priorities statement’ which the local authority will be obliged to take into account when preparing its local plan.
  
  
• The Bill also includes new ‘street vote’ powers, allowing residents on a street to bring forward proposals to extend or redevelop their properties in line with their design preferences. Where prescribed development rules and other statutory requirements are met, the proposals would then be put to a referendum of residents on the street, to determine if they should be given planning permission. It has been reported that local planning authorities are concerned that the policy will add unnecessary complexity to the planning system.

Replace the Community Infrastructure Levy

The Bill will replace the current system of developer contributions (the Community Infrastructure Levy or CIL) with a simpler, mandatory, and locally-determined Infrastructure Levy.  The levy will be charged on the value of property when it is sold and applied above a minimum threshold.  Levy rates and minimum thresholds will be set and collected locally, and local authorities will be able to set different rates within their area.  The rates will be set as a percentage of gross development value rather than based on floorspace, as with the CIL at present.

Section 106 agreements will still be used to support delivery of the largest sites. In these instances, infrastructure will be able to be provided in-kind and negotiated, but with the guarantee that the value of what is agreed will be no less than will be paid through the levy.

The Government will introduce the levy through a ‘test and learn’ approach.  This means it will be rolled out nationally over several years, allowing for careful monitoring and evaluation, in order to design the most effective system possible.

Business rates reform

The Government proposes to introduce a Non-Domestic Rating Bill which will:

• Modernise the business rates system with more frequent revaluations (3 years not 5 years).
  
  
• Incentivise business ratepayers to invest in their properties and decarbonise with new reliefs backed by the Government.
  
  
• Remove or reduce the ability to appeal against a rating valuation on the grounds of a change of circumstances.

Extending the "right to buy" to housing association tenants

Although it did not form part of the Queen's Speech, the Government has recently announced that it plans to bring forward a new Right to Buy scheme which will permit tenants in housing association properties to buy their homes at a discount.  This scheme would involve the one-for-one replacement of each social housing property sold.  Critics of the proposals have raised a number of objections, including concern about the risk of reducing the stock of social housing.  The details of the scheme have yet to be released.

There were no bills explicitly advancing the Government's net zero climate target, though there were (light) touch points, such as the energy and infrastructure measures outlined below:

• Energy: The Government announced an Energy Security Bill which aims to "deliver the transition to cheaper, cleaner and more secure energy". BEIS notes that this will be "based on renewable energy and low carbon technologies". The Bill will also, in an ambitious but necessary move, look to modernise both the network infrastructure and the overarching structure of the energy system for better integration with new technologies.
  
  
• Climate change: The UK Infrastructure Bank Bill will, according to the Government, enable the recently formed UK Infrastructure Bank to support investment in the green economy including by loans directly to local authorities, but the bank will also need to use its £22bn of funds to grow the economy and address the current cost of living crisis.
  
  
• Transport: additionally, the Transport Bill will contain measures to facilitate EV charging points.

According to media reports, some in Government had hoped that sustainability disclosure requirements or SDR (equivalent to the EU's Sustainable Finance Disclosure Regulation or SFDR) would be included as part of the Financial Services and Markets Bill, but these measures did not make it into the Queen's Speech. However, it is understood that the Government remains committed to SDR and the Financial Conduct Authority is continuing with its programme of work in this area, with a further consultation paper expected in July 2022.

Key themes of the Queen's Speech include cutting red tape and promoting growth opportunities – both of which most businesses would broadly welcome.  However, these objectives are easy to state but far from straightforward to deliver in practice.  As explained in section 3 above (see in particular the discussion of the Data Reform Bill), the devil will be in the detail, much of which has yet to be published.   Meanwhile, certain other measures that were announced, such as the Online Safety Bill, will tend to increase regulatory burdens, at least for some businesses – so overall, it is likely to be difficult to assess whether the net regulatory burden for business will be lighter once all the reforms are implemented (which will also take time – so no one should expect an immediate regulatory dividend from these measures).