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The Queen’s Speech 2022: legislating in uncertain times

  • United Kingdom
  • Public law
  • Local government
  • Public

13-05-2022

The UK Government set itself a wide ranging and ambitious programme in the Queen’s Speech on Tuesday, 10 May 2022. Looking beyond the self-stated priorities of Government, broad themes around responding to rapid technological and societal change, regulatory reform for the post-Brexit world and plans for local delivery to support “Levelling Up” were at the heart of the Queen’s Speech.

The UK Prime Minister wrote in his introduction to the published Queen’s Speech that this was “a Queen’s Speech to get our country back on track and ensure that we deliver on the promises we made at the start of this Parliament” and name checked as his priorities: economic growth, “safer streets” and the NHS. The Queen’s Speech outlined an ambitious 38 bills which the UK Government claims support these priorities, with a focus ranging from the high level - such as placing a duty on the UK Government to set Levelling Up missions and reporting on the delivery of those missions - through to eye-catching items like the wholesale rewriting of the financial services legacy EU law framework, a new railways system and the sell-off of Channel 4.

But looking beyond the UK Government’s self-stated priorities, a number of key themes emerge from the range of bills. This briefing examines three key themes, their significance and what businesses and corporates affected by these changes need to think about.

Innovation

The UK Government is seeking to respond to rapid innovation across many sectors, such as digital, financial, transport and energy, and, in some places, having to play a game of catch up. For example, the Financial Services and Markets Bill promises to harness the opportunities of innovative technologies in financial services, including supporting the safe adoption of cryptocurrencies. The Energy Security Bill will introduce “state of the art” business models for Carbon Capture Usage and Storage and low carbon hydrogen and the Transport Bill will support innovation in transport such as enabling the regulation of autonomous vehicles and remotely operated vehicles and vessels, as well as the creation of Great British Railways. The risk posed by legislating to try to respond to innovation in evolving industries is that the picture is rapidly outdated and that the legislation is insufficiently future-proofed. The hope will be that UK Government will use appropriate mechanisms such as leaving the detail of such regulation to be contained in more easily amendable secondary legislation or empowering regulators or industry bodies to act as they consider appropriate but businesses involved in these industries should be alert to provisions in the legislation which might restrict future flexibility and not hesitate to surface those problems.

The UK Government is also responding to innovation in other areas – for example, protests and public order, where the controversial practice of “locking on” is directly targeted by the Public Order Bill. The extent to which global forces, and global uncertainty, impact on the UK is also reflected in the proposals to reform espionage laws in the National Security Bill and to counter malign forces via the Economic Crime and Corporate Transparency Bill . This Bill, targeted at economic crime and national security, will, among various measures, beef up the powers of Companies House in relation to the Company Register and identify verification for people who control companies, but may – in fulfilling the UK Government’s aim of a “crack down on kleptocrats, criminals and terrorists who abuse [the UK’s] open economy” - have potential wide ranging consequences for legitimate businesses with complex corporate structures.

Regulatory reform

A second important theme is that of extensive regulatory reform. The legislative programme includes a wide range of measures changing the regulatory framework across a range of sectors – very few areas of significance to corporate entities escape without some change. In some places, the UK Government is seeking to capitalise on post-Brexit flexibilities such as the Financial Services and Market Bill, the Procurement Bill (which has received its First Reading already), and the Data Reform Bill. In others, it is trying to push forward long planned reforms such as the Audit Reform Bill (on the back of three separate reviews in 2018, although this will still not be introduced in this session). These are all complex regimes and time will be needed to ensure that the new frameworks are workable and do not deliver unforeseen consequences, even if the UK Government’s stated intention is to reduce the regulatory burden. Given the far reaching nature of the changes, it is likely that the majority of UK businesses will be affected, and will need to engage with and start planning for these changes as soon as possible.

Existing regulators are also being reformed or gaining additional strings to their bow, such as the Competition and Markets Authority in the digital markets space, where the newly established Digital Markets Unit will have some potentially radical intervention powers (although the Digital Markets Bill will be published in draft only, and will not be put before Parliament in this session). The UK Government is also seeking to “modernise” the Information Commissioner’s Office, with the express intention of adopting a more “flexible outcomes-focused approach to data protection” in the UK. In the energy space, a new Future Systems Operator will be established to provide strategic oversight across electricity and gas systems. The jury is out on how radical these changes will be in practice and we will be monitoring debate and developments around these bills as they progress through Parliament or receive pre-legislative scrutiny (in the case of draft Bills).

Levelling Up

A third theme is that of efforts to devolve more accountability and delivery to local levels. This theme was to be expected, given the Government’s headline “Levelling Up” agenda , which seeks to reduce regional inequalities. The Levelling Up and Regeneration Bill (which also received an early introduction into Parliament, as a flagship bill) sees the return of “regeneration” to the UK Government legislative vocabulary after some years of absence. It contains something of a mixed bag of measures including creation of new “Combined Authorities”, changes to the planning system (including apparent plans to replace the Community Infrastructure Levy with a new “Infrastructure Levy”), local street voting on developments and powers to create new locally-led Urban Development Corporations. The Bill is a long piece of legislation but scrutiny in Parliament is likely to focus on whether the disparate measures in the Bill will actually lead to real change and deliver the UK Government’s target of building 300,000 homes by the mid-2020s. Another notable measure in this space include the UK Infrastructure Bank Bill, a bill to place the Leeds-based UK Infrastructure Bank on a statutory footing, which is intended to ensure it will be a “long lasting institution” with a mandate to support regional and local economic growth, and the delivery of net zero, although it is unlikely that these changes will materially change the direction of the Bank’s existing work. The carried over HS2 Bill is also intended to deliver locally important infrastructure. While the detail is uncertain, these measures should help foster the climate of investment opportunities in the regional and local regeneration and delivery space, as the original Levelling Up White Paper set out.

Next steps

The measures in the Queen’s Speech are cross-cutting and will impact on many businesses. As legislation rarely survives passage through Parliament without significant change, there are opportunities for business to make its voice heard over the coming months and ensure that these reforms will not be unworkable. The implementation of the legislation, once passed, will also require significant investment by businesses in the future while also providing opportunities for growth, particularly at the regional and local level.

How we can help

The Governments and Infrastructure team at Eversheds Sutherland can support you in any aspects of your engagement with legislation in your business sector and the implementation journey, including advising on how to make your response to consultation and draft legislation as effective as possible, and advising on the impact of the measures for your business.