At first glance, you could be forgiven for thinking that the recent King’s Speech setting out the newly elected Labour government’s priorities for the coming parliament doesn’t have much to do with retail. But we think differently.
HIGH STREET NAMES HIT THE HEADLINES
Before I delve a little deeper into the implications for retail businesses, it’s worth a reminder about the context. You’ll no doubt remember some headlines about high street retailers who’ve made the press for all the wrong reasons.
In the last couple of years, several household retail names have gone under. For different reasons but fundamentally due to poor governance. There was Wilkos’ bad decision-making which hit their bottom line and BHS’ dodgy pension arrangements. The impact was not just on those businesses’ employees but also on their supply chains and customers.
Both examples are still fresh in people’s minds and add to general concerns about business governance. Whilst in opposition the Labour Party made very clear their concerns about the behaviours of ‘big business’ bosses and shareholders. There continue to be controversies regarding the treatment of employees, low pay, insecure contracts and poor workplace safety.
Add to those headlines concerns about ‘greenwashing’ along with consumer interest in supply chain issues which means that companies are increasingly subject to scrutiny. By shareholders, currently the Financial Reporting Council (FRC) and the public.
The FRC’s UK Corporate Governance Code is an important part of UK company law and corporate governance framework. Applying to all premium listed companies on the London Stock Exchange, encompassing many high street retailers. But change is planned along with a number of other areas which will impact on retailers.
WHAT’S ON THE SHOPPING LIST FOR RETAILERS?
The King’s Speech detailed the new Labour government’s ambitious plans to modernize and energize the UK economy. There were several key areas of focus:
REFORMING THE APPRENTICESHIP LEVY
There will be reform of the Apprenticeship Levy, which has faced criticism for its inflexibility. The new Growth and Skills Levy is expected to address these issues by allowing funds to be used for a broader range of training opportunities.
Retailers have long struggled with the current system’s rigidity, which limits their ability to invest in essential training and development. The proposed reforms aim to provide more flexibility, enabling retailers to better support their workforce and adapt to industry changes.
ENHANCING SKILLS TRAINING
The Skills England Bill
The Bill represents a significant shift in how apprenticeship funds are utilized. By allowing for a wider range of training options, including pre-employment courses and advanced skills development, this Bill seeks to align training with the needs of a modern workforce.
The response from the retail and hospitality sectors has been supportive. Anticipating that increased flexibility will enable more effective workforce development and support industry transformation.
ADDRESSING RETAIL CRIME AND ANTI-SOCIAL BEHAVIOUR
The Crime and Policing Bill
The Crime and Policing Bill introduces a new specific offence for assaulting shopworkers, a welcome development given the alarming rate of violence and abuse faced by retail and hospitality workers. With over 1,300 incidents reported daily, this measure is crucial for protecting those on the frontline.
Combating Shoplifting
Additionally, the Bill includes stronger measures to tackle shoplifting and anti-social behaviour. The cost to the retail sector is significant at £3.3 billion annually with a knock-on impact on their customers.
These interventions aim to reduce the prevalence of these issues and enhance overall retail security.
UPDATING PLANNING AND INFRASTRUCTURE LAWS
The Planning and Infrastructure Bill
This Bill promises essential updates to planning laws, which have often struggled to keep pace with the evolving needs of retail centres and high streets. The Bill will aim to streamline planning processes and enhance the efficiency of planning departments.
With high streets undergoing significant changes, not least of all because of changes to people’s work and leisure patterns, the proposed reforms are expected to facilitate smoother and faster decision-making. Ultimately aiding in the transformation and revitalization of retail spaces.
DRAFT AUDIT REFORM AND CORPORATE GOVERNANCE BILL
In the third paragraph of the King’s Speech, the Draft Audit Reform and Corporate Governance Bill was highlighted as a key legislative change. This Bill proposes the creation of the Audit, Reporting and Governance Authority (ARGA), which will replace the Financial Reporting Council (FRC).
Clearly, it’s not just retailers that will be overseen by the new body. But it’s worth being aware of what it will encompass. The ARGA will oversee audits, accountants, and actuaries, setting new standards for corporate governance and reporting. This change aims to enhance the regulatory framework and address shortcomings identified in the FRC’s tenure.
This takes us back full circle to the recent business failures under the previous conservative government. Highlighting significant issues in corporate governance and financial oversight. The ARGA is expected to bring a more rigorous and transparent approach to regulating corporate practices.
READY TO BUY IT?
The King’s Speech outlined a bold agenda for the Labour government. Very much focusing on modernizing various aspects of the economy with, I think, particular emphasis on the retail sector. The proposed bills—ranging from reforms in apprenticeship funding to enhanced protection for retail workers and updated planning laws—are set to drive significant improvements. Additionally, the introduction of the ARGA represents a crucial step towards strengthening corporate governance. As these changes unfold, their impact on both the retail industry and the broader corporate landscape will become increasingly clear.
We’ll be keeping an eye on how things develop over the coming months. As always the devil will be in the detail. If any of the above has sparked a thought, get in touch – I’m always happy to chat about how we may be able to help your retail business.
