What can the retail and consumer sector expect from the next UK government?

With the general election taking place on 4 July, we look at what the Labour and Conservative parties, as the two main contenders to form the next government, propose. How are issues important to the retail sector (including supporting the high street, consumer law, advertising and digital regulation) being addressed?

Consumer law

Just before Parliament was dissolved, the Digital Markets, Competition, and Consumers Act 2024 (DMCCA) was enacted. This is a significant piece of legislation that brings sweeping reforms to consumer law by, among other things, bringing in a new regime in relation to fake online reviews and giving the Competition and Markets Authority stronger enforcement and sanction powers, such that it will be able to investigate and enforce against a range of existing consumer protection laws without going to court first. Penalties can be significant, amounting to up to 10% of global group turnover. The DMCCA also makes it easier for the government to add further prohibitions to the unfair commercial practices regime (that is, commercial practices that are always prohibited) whatever the outcome for consumers.

While the DMCCA is now law, it is not yet effective as it depends on secondary legislation being enacted, which will be for the new government to bring forward.

There is no mention of the new legislation in the Conservative Party manifesto or of any further retail consumer policies.

As for Labour, during its passage through Parliament, the party wanted to include provisions in the DMCCA to protect consumers in relation to online ticket resales, but decided not to delay enactment of the bill by pursuing the issue. However, in its manifesto, Labour says that it would bring in "new consumer protections on ticket resales", but without specifying whether this would apply to online or offline sales, or both, and without giving any further detail as to how or when it would do this.

Advertising

The Conservative Party says that it would put the current regulatory restrictions on the advertising of products high in fat, salt and sugar on a statutory footing to tackle both childhood and adult obesity. It also says that it would "gather new evidence" on the impact of ultra-processed food to "support people to make healthier choices". A Conservative government would also resurrect its Tobacco and Vapes bill (which fell during the "wash-up" period), which contained provisions restricting the way vaping or nicotine products are displayed in retail outlets.

The Labour manifesto says that a Labour government would ban the advertising of "junk food" to children, without going into detail on which "junk food" would be included. It would also prohibit the sale of high-caffeine energy drinks to under-16s and "ban vapes from being branded and advertised to appeal to children".

Digital regulation

Those online retail marketplaces that also allow users to share content with other users, and search services that search large numbers of retail websites, should, if they are caught by the Online Safety Act 2023 (OSA), also be aware that both the Conservative and Labour parties say that they will "build" on the OSA. Labour expands on this slightly by saying that it will "bring[…] forward provisions as quickly as possible" and "explore further measures to keep everyone safe online", but does not elaborate further.

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Business rates

Both leading parties have grappled with business rates which are commonly considered to be crippling the high street. The Conservative manifesto detailed a support package "worth £4.2 billion over the next five years to support small businesses and the high street" which would be achieved by increasing the multiplier on distribution warehouses that support online shopping and aimed at easing pressure on leisure, high street and hospitality sectors.

Labour, as part of its five-point "High Street Plan", is proposing radical reform, promising a complete replacement of the current system designed to "level the playing field between the high street and online giants, better incentivise investment, tackle empty properties and support entrepreneurship." While promising to raise the same revenue "but in a fairer way", few specifics have been provided on how it will achieve this reform and what the system could realistically be replaced with.

The complexity of the present system and its lack of transparency are areas in which ratepayers are desperately seeking change. Currently there is a two-year gap between the antecedent valuation date (when rental evidence is fixed) and the date the revaluation takes effect; so while we have recently moved to three-yearly revaluation cycles, the rental evidence is still five years behind the valuation list date. There is clearly a significant amount of work to be done by any new government to start to alleviate these issues.

Landlord and tenant

The retail sector will be disappointed that neither the Conservative or Labour manifestos mention progressing reforms to the security of tenure regime that governs many business tenancies. The current system has been criticised as cumbersome, unnecessarily costly and holding back the introduction of "green" provisions into commercial leases. While the Law Commission review of the Landlord and Tenant Act 1954 is scheduled to be published in autumn this year (after numerous delays), it appears that whichever government emerges, this will not be high on the list of priorities for 2024.

Another notable absence from the manifestos of both leading parties was any mention of high street rental auctions. The current government had announced plans for the required secondary legislation to bring in the relevant powers "by summer" (2024), and the Labour Party has previously mentioned "Empty Shop Orders", but the failure by either to detail any proposals in their current plans indicates that the policy is not likely to be a priority. Giving local authorities power to interfere with an owner's right to deal with their property was highly controversial and investors will be relieved at the policy's downturn in momentum.

Osborne Clarke comment

Whichever party wins, the King's Speech on 17 July will set out the next government's legislative priorities. The sector has been on a long journey of recovery for the past few years due to the number of obstacles faced, such as Covid-19, geopolitical issues impacting the supply chain, and lack of investment, which has seen business closures. What is clear from the rhetoric is that both the Conservative and Labour parties are focusing on stimulating business growth for the economy. The sector will hope that, whoever forms the next government, this aim will be achieved.