What New Legislation Could be Coming Up for Business?

The first session of the new parliament since the general election was opened on 17 July 2024 with the King’s Speech. The speech and its accompanying memorandum contained some 40 bills, just two of which were carried over from the previous parliamentary session. According to the Institute for Government, this is the highest number of bills in such a speech since 2005.

From a business point of view, a number of topics were covered including AI, data protection, cybersecurity, product regulation, banking, and financial services. In this newsletter, we take a look at some key areas as a preview of what will be coming up over the next several months.

Data Protection

As we have noted previously, the Conservative government’s Data Protection and Digital Information (No. 2) Bill was not far enough along in its journey through the legislative process to be passed in the wash-up period. Curiously not in the King’s Speech itself, but referred to in the government’s background notes, is a proposed Digital Information and Smart Data Bill. The aim of this bill is to reform data sharing and protection standards, enhance the power and structure of the Information Commissioner’s Office, and to make improvements to support science and research. Key measures include digital verification services to enable individuals to verify their identity and share essential personal information online; a National Underground Asset register, mapping and consolidating information about underground pipes and cables; and smart data schemes to enable the secure and (most importantly) consent-based sharing of customer data with authorised third parties.

It is expected that some elements of the defunct Data Protection and Digital Information Bill will return, but at least for now, concerns over significant reforms that could have jeopardised the UK’s adequacy status for personal data transfers from the EU, appear to have quietened.

Regulating AI

Over the last few years, AI has seen rapid growth both in its prevalence and its capabilities. Unsurprisingly, the law has been playing catchup in a number of related areas, including privacy and intellectual property. Regulators are often behind the curve when it comes to regulating technology and this is plain to see where AI is concerned. The previous Conservative government were keen to take a largely hands-off approach to AI regulation, hoping to foster the growth of AI businesses in the UK. Some expect the new Labour administration to take a different tack. Indeed, some even expected an AI Bill to appear in the King’s Speech.

In its manifesto, Labour stated that it sought to “ensure the safe development and use of AI models” by introducing “binding regulation on the handful of companies that are developing the most powerful AI models”. Commentators suggest that it is unlikely that this will mean going as far as the EU’s AI Act, however. It is clear that the government still wants (and needs, arguably) to ensure a competitive advantage for the UK in the rapidly growing world of AI, but it must be balanced with appropriate regulation to handle the risks and harms that are already clearly evident and those as yet unrealised. There was no AI Bill in the King’s Speech, but it is highly unlikely that the new administration’s approach in the future will be quite as hands-off as that of their predecessors.

Cybersecurity

Another key area for business is cybersecurity. Businesses face a range of threats from bad actors including malware, phishing attacks, and ransomware. Indirectly, businesses of all sizes also face threats in the form of disruption resulting from attacks on infrastructure.

The Cybersecurity and Resilience Bill was introduced in the King’s Speech. Similar in some respects to the EU’s proposed Cyber Resilience Act, the Cybersecurity and Resilience Bill will introduce reporting requirements for incidents such as ransomware attacks. Detail is presently lacking, as is to be expected, and much of the information available thus far focuses on larger organisations, particularly those involved in public services and infrastructure.

The UK’s current cybersecurity regulations for critical sectors can be found in the Network and Information Systems (NIS) Regulations 2018, applying to operators of essential services in sectors such as water, digital infrastructure, energy, health, transport, and some digital service providers (search engines, online marketplaces, and cloud computing services). It remains to be seen, therefore, whether SMEs will fall within the scope of the Bill, but all should benefit from greater protections for key infrastructure.

Product Regulation

For many years, product regulations governing UK manufacturers largely originated in the EU. Indeed, even after Brexit, alignment with EU regulations and standards remains good business practice, particularly for businesses selling beyond the UK market.

The King’s Speech introduced the Product Safety and Metrology Bill. A key aspect of the Bill addresses regulatory alignment with the EU. It seeks to allow changes to UK law to recognise new or updated EU regulations and drop others where it is beneficial to do so.

Other features of the Bill include addressing divergence within the UK internal market resulting from the Windsor Framework; responding to new risks in products such as AI and lithium-ion batteries; clarifying supply chain responsibilities (including online marketplaces); and enhancing compliance and enforcement.

And the Rest…

As noted above, some 40 Bills were announced in the King’s Speech. In this newsletter, we have focused on those likely to be of most interest and relevance to our Business subscribers. At this stage, the bills will for the most part be in embryonic form, but expect them to develop over the coming months as drafts are released and the bills begin to work their way through the legislative process. Simply-Docs will be monitoring progress in these areas and others of importance including changes to employment law, property, corporate governance and more.

To find out more about what the King’s Speech could mean for your business, take a look at the King’s statement to Parliament here (external link) and the Background Briefing Notes here (external link).