Regulatory Outlook: November 2021
Published on 24th Nov 2021
Welcome to this pilot edition of the Regulatory Outlook. This updated version of the Regulatory Outlook will be circulated on a more frequent basis, to provide you with high level summaries of important regulatory developments to help you navigate the fast-moving business compliance landscape in the UK.
Our regulatory and global compliance teams can help you to understand the regulatory risks to your business now and those coming down the track. Please do not hesitate to get in touch with us if you have any queries.
CAP and BCAP call for evidence into body image concerns
Closing on 13 January 2022, this call for evidence seeks to assist the Committee of Advertising Practice (CAP) and Broadcast Committee of Advertising Practice (BCAP) "in their regulation of advertising which gives rise to potential harms relating to body image concerns".
In response to recent reports, inquiries and research, the regulators are reviewing their current protections in relation to body image. Evidence is sought on the types of ad content that give rise to body image concerns across different demographics, the impact of social media and influencer marketing, and the positive impact of advertising on such concerns.
Following this consultation, the CAP and BCAP will outline the proposed next steps later next year. It is important for businesses to be aware of this call for evidence, as it has the potential to affect the ways in which they can advertise certain goods and services.
CMA introduces Green Claims Code
Recently the Competition and Markets Authority (CMA) published, along with further guidance, the Green Claims Code, which applies to businesses making environmental claims in advertisements. The introduction of the code follows the CMA's consultation on consumer protection for green claims, which concluded in July. The main principles of the code are that claims must be truthful, clear, and consider the full lifecycle of the product; they must not hide or exclude any important information; and any comparisons must be fair and relevant. A full compliance review of misleading green claims will be conducted by the CMA early next year, as the crackdown on businesses that make misleading claims continues. To avoid regulatory action, ad campaigns should be reviewed to ensure alignment with the code.
ISBA launches Code of Conduct for influencer marketing
On 14 September, the Incorporated Society of British Advertisers (ISBA) announced a new Code of Conduct for influencer marketing. The aims of the code, which complements ISBA's Influencer Contract Templates, are to deliver transparency, enable authentic and effective influencer marketing, and improve relationships between brands and influencers.
New in-game purchasing advertisement guidance from CAP and BCAP
Following the consultation on the regulation of advertising in-game purchases, guidance has been published. The guidance clarifies how both codes apply to in-game advertising and "storefronts", as well as adverts for games which feature in-game purchases.
Notably, CAP's remit in relation to in-game storefronts does not extend to games where virtual currency can be earned, irrespective of whether it can also be purchased.
Another change in relation to virtual currency is that consumers should be able to easily identify the fiat price for an item, or whether they will need to spend more money on the respective virtual currency.
The ASA has confirmed two grace periods during which complaints about ad content will be dealt with on an informal basis, so it is important to make changes within these; six months for in-game ad content and three months for all other ads.
Contacts: Nick Johnson / Chloe Deng
The Law Commission's consultation into UK Corporate Criminal Liability
The aim of this consultation, which closed on 31 August, is to assist the Law Commission in improving the legal framework surrounding the criminal liability of companies and limited liability partnerships.
The proposals include alignment with the US system, which sees companies held liable for the actions of a director if their intention was to benefit the company, and the expansion of various "failure to prevent" offences.
The responses to the consultation are currently being reviewed by the Law Commission, which aims to publish its options paper in early 2022. If the "failure to prevent" offences are expanded, it is imperative that directors and executives are aware of the changes made so as to avoid corporate criminal liability.
HMRC publishes policy paper on Economic Crime Levy
On 27 October 2021, HM Revenue & Customs published a policy paper on the Economic Crime Levy on entities regulated for anti-money laundering purposes under the Money Laundering Regulations. The regulations apply to a number of different business sectors, including accountants, financial service businesses, casinos, estate agents, and solicitors.
The government intends to raise about £100 million a year, to contribute towards more capacity to tackle money laundering. The levy will first be charged during the year 1 April 2022 to 31 March 2023. The first payment of the levy will be due after that year ends, during the levy year 2023/24.
The amount payable will be depend on firms' size based on their total UK revenue, with the size bands as follows:
- Small (under £10.2 million UK revenue) – exempt
- Medium (£10.2 to £36 million) – fee of £5,000 to £15,000
- Large (£36 million to £1 billion) – fee of £30,000 to £50,000
- Very large (over £1 billion) – fee of £150,000 to £250,000
Final fees remain to be confirmed.
Contacts: Jeremy Summers / Chris Wrigley
UK Digital Markets Unit
As reported in this Insight, in 2020 the UK government launched its Digital Markets Unit (DMU), the new regulatory arm designed to oversee "big tech" platforms. Since we reported on this in our previous Regulatory Outlook, the government published its consultation "A new pro-competitive regime for digital markets", where it set out its proposals. The consultation has now closed and the responses are being analysed. The CMA published its response to the consultation in September 2021 supporting this new proposal.
EU Digital Markets Act
As flagged in our previous Regulatory Outlook, the EU has published a draft of its Digital Markets Act which aims to boost competition in EU digital markets, with new rules aimed at online "gatekeepers"; that is, players that determine how other companies interact with online users. It is anticipated that the European Parliament will adopt this legislation in 2022 but the new rules are not expected until 2023.
Reforming the Vertical Agreements Block Exemption Regulation
Manufacturers and brand owners across the UK and EU should be aware that significant changes to the existing regulation of their supply and distribution agreements will kick in from 31 May 2022 when the EU Vertical Agreements Block Exemption Regulation (VABER) is replaced. More details of these changes can be found in this Insight.
Most recently, in October, the CMA published its recommendation to the Department of Business, Energy and Industrial Strategy on the reforms to VABER. The CMA recommend that the Secretary of State replaces the retained VABER with a UK Vertical Agreements Block Exemption Order that will have a duration of six years.
The National Security and Investment Act
The National Security and Investment Act is set to come into effect on 4 January 2022. The Act creates a new stand-alone regime for the UK government to intervene in a broad range of transactions on national security grounds. Further information on the Act can be found in our Insight and government guidance. Further government guidance provides details on how it will interact with other regulators such as the CMA, Export Control Joint Unit and the Takeover Panel.
Most recently, on 15 November 2021, new and updated guidance was published to help businesses understand their obligations under the Act.
Contacts: Simon Neill / Katherine Kirrage
HM Treasury consults on regulating buy-now pay-later
On 21 October 2021, HM Treasury released the long-awaited consultation on the regulation of Buy-Now Pay-Later (BNPL), which closes on 6 January 2022. The consultation seeks views on the creation of a proportionate approach to the regulation of BNPL products. See this Insight for more detail.
Contacts: Nikki Worden / Ben Player
CMA consultation into the proposed reforms to competition and consumer policy
This recently-closed consultation by the CMA sought views on new policies designed to limit harm to consumers in the e-commerce environment.
The proposals include: further protections when entering into subscription contracts, such as reminders and easy exit features; cracking down on fake reviews, which have become increasingly common as a result of digitalisation; and strengthening the enforcement capabilities of consumer regulators.
The consultation closed on 1 October and the CMA is currently reviewing the feedback, which will ultimately inform changes to consumer policy. The response to the feedback is expected in the first half of 2022.
Particularly relevant for businesses operating a subscription-based model, any reform in relation to these proposals will affect the way in which they should interact with customers throughout the transaction lifecycle.
The Omnibus Directive implementation deadline
By 28 November, businesses must implement the measures necessary to comply with the Directive.
The Directive includes: classifying the exchange of personal data for goods and services as a "payment", which means businesses have to clearly inform people about this in their terms and conditions; placing responsibility on traders to ensure feedback comes from actual customers; informing customers as to whether the seller is a business owner or just an individual selling things; amending the thresholds for reductions and sales; and preventing automatic online purchasing, preventing business owners from using bots to buy items cheaply for resale.
The Directive applies to any business selling to EU consumers, regardless of the business's domicile.
Ofcom consults on net neutrality
On 2 November, Ofcom's call for evidence on the proposed review of net neutrality closed.
Prompted by various factors such as increased use of cloud and internet of things services, and the deployment of 5G, the consultation is intended to inform Ofcom's work surrounding the net neutrality framework.
The consultation considers a number of issues, including: the approach to zero-rated services and the potential of such service to harm consumer choice; the impact of the current framework on end-user rights; and whether any rules should be incorporated into Ofcom's General Conditions.
The zero-rating of large sites drives costs onto network providers, so a change in approach would affect providers.
Ofcom publishes harmful content guidance for video-sharing platforms
New guidance from Ofcom was published on 6 October to help providers of video-sharing platforms (VSPs) to comply with statutory duties to protect users from harmful content.
Part 4B of the Communications Act 2003 requires VSPs to take appropriate steps to protect under-18s from harmful content and protect the general public from criminal content and content likely to incite hatred or violence.
The guidance suggests that VSPs: provide and effectively enforce clear rules on uploading content; allow users to report harmful content easily, signposting how quickly they will respond to complaints; and implement more robust age verification processes.
Penalties for failure to comply could be up to 5% of a VSP's relevant turnover.
Contacts: Tom Harding/ John Davidson-Kelly
ICO opens consultation on its AI and data protection risk toolkit
In a consultation that will close on 1 December, the Information Commissioner's Office (ICO) seeks views on its artificial intelligence (AI) and data protection risk toolkit. The toolkit, published on 22 July, aims to help practitioners identify and mitigate risks to data protection that arise out of AI data processing.
ICO issues call for evidence on age assurance
The opinion covers the various methods of age assurance, such as self-declaration and verification, and the ICO's expectations for the application of such measures. The consultation, which closes on 9 December, seeks views on age assurance under the code to deepen the ICO's understanding of the industry response to age assurance and the code more generally.
Commentators believe there is a balance to be struck between protecting children and infringing upon their privacy rights. As this call for evidence may inform policy, businesses may wish to participate.
ICO seeks feedback on the draft journalism code of practice
The ICO is seeking feedback on a proposed code of practice regarding the processing of personal data for the purposes of journalism.
The code aims to support media organisations and journalists with their data processing obligations, and reflect changes in legislation, developments in privacy case law, and the digital age. The consultation closes on 10 January 2022.
DCMS data reform consultation
On 10 September, the Department for Digital, Culture, Media, and Sport announced a consultation on reforms to the UK's data protection framework, welcoming views to help shape such reform. The consultation closed on 19 November and had five key focuses:
- using data to enable innovation;
- reducing administrative burdens through, among other things, increasing data breach reporting thresholds;
- enabling cross-border data transfers through "adequacy partnerships";
- enabling data sharing between public bodies and their private data processors, through such measures as clarifying the lawful grounds for data processing as found in Article 6(1)(e) of GDPR; and
- reforming the ICO to refocus its efforts towards more serious issues than the low-level complaints it currently spends a lot of time dealing with.
The proposals should be followed closely, as any reform will have implications on the way data is processed and shared, as well as potentially changing the regulatory reporting requirements.
Contacts: Cyber security Charlie Wedin; Data protection Mark Taylor
Autumn Budget and Spending Review 2021
On 27 October UK chancellor, Rishi Sunak, delivered the government's latest Budget and Spending Review. Particular points for employers to note include:
- Wages: The national living wage is to be increased to £9.50 an hour from April 2022.
- Innovation: A new Global Talent Network "will identify, attract and relocate the best global talent in key science and tech sectors". These announcements will be welcome news for businesses looking to meet their people needs in the current war for talent. More details are to come but the new visa is expected to be launched in spring 2022.
- Skills: Building on the government's previous commitments to create "high-skilled and high-paid jobs across the UK", the Budget "invests in the most wide-ranging skills agenda this country has seen in decades" with skills spending over the Parliament increasing by £3.8billion. Along with other initiatives, the government is extending the £3,000 apprentice hiring incentive for employers until 31 January 2022.
Further details can be found in our Employment Law Coffee Break.
Right to work checks extended
The end date for the ability to carry out "adjusted" right to work (RTW) checks has been further delayed to 5 April 2022 (inclusive). From 6 April 2022 employers have a legal obligation to ensure they are not employing individuals who do not have the RTW in the UK. Up to and including 5 April 2022, if you are carrying out a temporary adjusted check, you must:
- ask the individual to submit a scanned copy or a photo of their original documents via email or using a mobile app;
- arrange a video call with the individual – ask them to hold up the original documents to the camera and check them against the digital copy of the documents, record the date you made the check and mark it as "adjusted check undertaken on [insert date] due to Covid-19";
- if the individual has a current biometric residence permit or biometric residence card or has been granted status under the EU Settlement Scheme the online right to work checks could be carried out with the individual's permission.
Read more in our Insight.
Avoiding legal and tax liabilities in flexible 'contract' workforces
Flexible contracts bring both advantages and difficulties in working arrangements. The Trades Union Congress recently announced that the number of people in England and Wales working on a gig or contract basis has almost trebled in five years - three in 20 adults found work this way at least once a week in 2021. With the numbers increasing, it is crucial that businesses are aware of developments to ensure they are implementing flexible "contracts" correctly and without creating legal and tax liabilities. These issues include:
- Increased HMRC activity relating to the enforcement of IR35 – see more on the recent changes to the IR35 in the previous Regulatory Outlook.
- Increased HMRC activity targeting use of tax avoidance and tax evasion in the staffing supply chain especially in relation to umbrella companies. See more in this Insight.
- Potential action by tax authorities relating to UK-employed workers working from homes outside the UK. See more in this Insight.
- Increased focus on national minimum wage (NMW) breaches relating to workers.
- Privacy law and intellectual property ownership issues arising with the use of a distributed/contract workforce.
The Workforce Solutions team is developing a consultancy-based initiative which will include a workshop followed by recommendations from the team. It will assist you with how to structure your workforces in a cost effective way and will include recommendations about:
- Minimising employment claims as roles are moved from "perm" to contract
- Tax planning relating to using contract workers
- Systems to minimise risk of future tax and employment claims, including those relating to IR35, Criminal Finances Act (CFA), NMW and holiday pay
To keep updated on developments, you can sign up to for Workforce Solutions updates.
For further developments see our Insight on Driving change in employment in 2022: the challenges that arise from accelerating transformational change.
Contacts: Kevin Barrow / Julian Hemming
Environment Bill receives Royal Assent
The Environment Bill received Royal Assent on 9 November and has now passed into law after nearly two years, making it the Environment Act 2021. Recent amendments to the Act include a new legally binding target to halt species decline by 2030.
New measures were introduced to tackle storm overflows, requiring water companies to monitor the water quality impacts of their sewage discharges and ensuring they publish this information annually.
The Act contains provisions that will affect regulated businesses. For more information, see our Insight. See also Product regulation.
Scotland's Deposit Return Scheme
The Scottish government is implementing a Deposit Return Scheme (DRS) which is to go live on 1 July 2022. Consumers will have to pay 20p when they buy a single-use drinks container and will get this deposit back when they return the empty bottle or can, an initiative designed to help improve the quality and quantity of recycling, reduce litter and achieve climate change targets.
Producers will need to become familiar with the legal framework in order to understand their obligations and the producer fees they will be subjected to. The scheme is broad in scope, and will also apply to online retailers. Read more on the Scottish DRS.
Scotland is the first nation in the UK to introduce a DRS. The UK government has not yet published its response to its DRS consultation in England. Its responses to the consultations on extended producer responsibility for packaging and consistent recycling collections are also awaited (reported on in the previous Regulatory Outlook)
Biodiversity Net Gain
The new Environment Act provides for a mandatory requirement for biodiversity net gain for planning permissions to be introduced. Per the requirement, all planning applications (save for limited exceptions, including householder applications and permitted development) will need to deliver at least a 10% increase in biodiversity in connection with their development. As part of the planning process, applicants will need to submit a biodiversity gain plan which outlines the pre-development and post-development biodiversity values of the land benefitting from planning permission, and identify any mitigation schemes utilised to deliver the biodiversity objective of 10%. See our Insight or watch our video series.
While the Environment Act 2021 is now law, the biodiversity net gain requirement is subject to a two year transition period before it become mandatory.
Nutrient and water neutrality
In June 2019, Natural England published advice for local planning authorities in the Solent region requiring that all new development in this environmentally-sensitive area achieves nitrate neutrality. Since this initial set of guidance was issued, Natural England has provided similar advice to local planning authorities across England and Wales where those authorities have been situated near to "European Sites". These are sites designated as protected environmental locations under various European Union-derived law.
The guidance issued by Natural England states that the relevant authorities must not grant planning permission for a development if the applicant cannot demonstrate that the development will have a "neutral" impact on nitrate levels, phosphate levels, and/or water supply resources.
Additionally, in September 2021, Natural England issued guidance to authorities within the Sussex North Water Supply Zone stipulating that development is not to be granted for applications unless water neutrality can be demonstrated.
The widespread acceptance of Natural England's guidance by local authorities on neutrality issues represents an effective moratorium on development unless developers are able to offset and/or deliver solutions to Natural England's concerns.
Mandatory climate transition plans and disclosing climate-related financial information
Please see ESG. (link to ESG)
Contacts: Matt Germain/Caroline Bush
ESA propose new rules for taxonomy-related product disclosures
On 22 October 2021, the three European Supervisory Authorities (ESA) delivered their final report to the European Commission on Regulatory Technical Standards (RTS) regarding disclosures under the Sustainable Finance Disclosure Regulation (SFDR) on the establishment of a framework to facilitate sustainable investment (Taxonomy Regulation). The draft RTS aim to:
- provide disclosures to end investors regarding the investments of financial products in environmentally sustainable economic activities, providing them with comparable information to make informed investment choices; and
- establish a single rulebook for sustainability disclosures under the SFDR and the Taxonomy Regulation.
The European Commission will now scrutinise this draft RTS and decide whether to endorse them within three months of their publication.
UK government roadmap on greening finance and sustainable investing
On 18 October 2021, HM Treasury published a policy paper on Greening Finance: A Roadmap to Sustainable Investing, which sets out the government's ambition to green the financial system and align it with the UK's net zero commitment. Highlights of the paper include:
- New Sustainability Disclosure Requirements (SDR) that will require companies, some financial institutions and occupational pension schemes to disclose sustainability-related information.
- Details of the UK green taxonomy, which will act as a type of dictionary and create a shared understanding as to which economic activities count as "green".
- A call to action for the pensions and investment sectors, setting expectations that they will use the information generated by the SDR to start moving capital to align with a net zero economy.
As regards timing and future consultations:
- November 2021: A series of discussion papers will be published, focusing on SDR disclosures, consumer-facing product-level SDR disclosures, and the sustainable investment labelling regime.
- Q1 2022: A consultation on climate change mitigation and climate change adaptation criteria under the UK green taxonomy will be published.
- 2022: The government plans to update the Green Finance Strategy, including an "indicative sectoral transition pathway" to 2050 to align the financial system with the UK's net zero commitment.
The government has also published its Net Zero Strategy, which sets out policies and proposals for decarbonising all sectors of the UK economy to meet the net zero target by 2050.
Banking Package 2021: new EU rules to strengthen banks' resilience
The European Commission has adopted a review of EU banking legislation on 27 October 2021. Focusing on sustainability and green transition, the proposal is designed to strengthen the resilience of EU banks to environmental, social and governance (ESG) risks in line with the Commission’s Sustainable Finance Strategy.
Banks will be required to systematically identify, disclose and manage ESG risks as part of their risk management frameworks, including regular climate stress testing conducted by financial supervisors and the banks themselves. Financial supervisors will have an obligation to evaluate ESG risks within their regular regulatory reviews.
The legislative package will now be discussed by the European Parliament and Council. See more on this review.
The Whistleblowing Directive
The new Whistleblowing Directive (2019/1937) is to be implemented by EU Member States by the 17 December 2021. Businesses with 250 or more employees operating in the EU will need to review their policies and procedures in line with Member States' requirements in order to comply. Read more on the Directive in this Insight.
Disclosing climate-related financial information
On 29 October the government confirmed that the UK will become the first G20 country to introduce a mandatory law requiring Britain's largest businesses to disclose their climate-related risks and opportunities, in line with Taskforce on Climate-related Financial Disclosures (TCFD) recommendations.
Subject to Parliamentary approval, legislation is to be introduced to require firms to disclose climate-related financial information, intended to come into force from April 2022. For more, see our previous Regulatory Outlook.
Requirement for mandatory transition plans for listed companies
On 3 November 2021, the Chancellor set out the UK's plans to become the world’s first Net Zero-aligned Financial Centre. Under the proposals, there will be new requirements for UK financial institutions and listed companies to publish net zero transition plans that detail how they will adapt and decarbonise as the UK moves towards a net zero economy by 2050. A transition plan sets out how an organisation will adapt as the world transitions towards a low carbon economy. The UK was the first country to commit to making climate reporting aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) mandatory.
The TCFD has issued guidance recommending firms that operate in jurisdictions, like the UK, that have made a net zero commitment describe their plans for transitioning to a low carbon economy. The Financial Conduct Authority (FCA) has proposed to reference this in its TCFD-aligned disclosure rules for listed companies, asset managers and FCA-regulated asset owners with effect from 1 January 2022.
Contacts: Chris Wrigley / Daniel Faundez
Regulatory initiatives grid updated
The Financial Services Regulatory Initiatives Forum published an updated Regulatory Initiatives Grid in November. The Grid sets out the planned regulatory initiatives for the next 24 months across a variety of different sectors (including banking, credit and lending, insurance, investment management, pensions, and retail investments) and this edition also includes an annex highlighting where initiatives included in the previous Grid have been removed and the reasons for this.
In this edition, key initiatives include:
- ESG initiatives such as the FCA's net zero transition plans
- FCA review of the appointed representatives regime
- HM Treasury Future Regulatory Framework Review
- Work on financial/operational resilience
- UK MiFID conduct and organisational rules
Firms should review the Grid to identify any regulatory initiatives which may affect them and plan for implementation.
FCA climate change adaptation report
On 28 October 2021, the Financial Conduct Authority (FCA) published a report on climate change adaptation, setting out its assessment of how the financial services industry and listed companies are adapting to climate change. The report explains how the regulator is developing its strategic approach to climate-related issues, and how it sees firms and markets evolving to transition to net zero. See ESG for more on upcoming requirements. (link to ESG)
Greening finance and sustainable investing in UK
The UK government has published a policy paper on greening finance and sustainable investment –see ESG [link to section] for more detail.
Contacts: Paul Anning / James Turner
Nutrition and health claims
From 19 January 2022, the transition period for food products with nutrition or health claims implied by a trademark or brand name which existed before 1 January 2005 will come to an end. The government guidance sets out that existing trademarks or brand names suggesting health or nutrition benefits that do not meet the requirement of Regulation (EC) No 1924/2006, must be phased out and removed from the market. Only foods with trademarks or brand names which are fully compliant with Regulation (EC) 1924/2006 may be marketed.
Restrictions on promoting high fat, sugar and salt products
The government announced this year that new rules on advertising "unhealthy" foods would be coming into force. The draft Food (Promotion and Placement) (England) Regulations 2021 were laid earlier this summer to restrict the promotion of high fat, sugar and salt (HFSS) products in medium and large businesses that sell food or drink in England (50 or more employees).
The regulations include both location and volume price restrictions:
- Location restrictions will apply to store entrances, aisle ends and checkouts, and their online equivalents (that is, entry pages, landing pages for other food categories, and checkout pages).
- Volume price restrictions will prohibit medium and large businesses that sell food or drink in England from offering promotions such as "buy-one-get-one-free" or "3 for 2" offers on HFSS products.
Examples of the products that fall within these restrictions include: soft drinks; chocolates; sweets; cakes; desserts; morning goods, including croissants and other similar pastries. The regulations can be enforced by food authorities. Non-compliance will lead to improvement notices being issued and further enforcement actions can be taken if businesses do not comply with these improvement notices.
Once approved these regulations are set to come into force on 1 October 2022. See the draft explanatory memorandum.
For more on HFSS advertising restrictions, see our Insight.
Animal health regulation export health certificates
In order to export or move composite food products from Great Britain to either the EU or Northern Ireland, businesses must ensure they have a composite Export Health Certificate (EHC).
The new Animal Health Regulation EHCs, to be used to move certain live animals, germinal products and products of animal origin, were due to be used from 21 August 2021, but the implementation date was delayed by the EU until 15 January 2022. See this government guidance page for more details.
Rules of origin
As noted in our previous Regulatory Outlook, under the EU-UK Trade and Cooperation Agreement, traders need to have obtained declarations from their suppliers that a product meets the provisions on rules of origin.
From 1 January 2022, businesses must hold a supplier's declaration at the time of issuing a statement of origin. A supplier uses a supplier's declaration to give information to their customers about the originating status of goods, on the specific preferential rules of origin. The completion of a supplier's declaration declares the originating status of the goods they provide to the customer, who needs this information to make out a statement on origin. For more information see the government guidance.
Contacts: Katie Vickery / Katrina Anderson
Scope of PPE regulations expands to gig workers
The Health and Safety Executive (HSE) ran a consultation between 19 July and 17 August 2021 on amending the Personal Protective Equipment at Work Regulations 1992. The changes to the regulation would replace the wording "employee" with "worker" to extend the scope of the employer's duties under these regulations which would mean limb (b) workers (also known as gig economy workers) would fall into this definition.
Limb (b) workers are defined in section 230(3) of the Employment Rights Act 1996 as those who work under a contract other than a contract of employment "whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual".
These proposed changes will mean limb (b) workers may need to be provided with PPE by the company they work for, depending on the work being carried out. The HSE is set to publish its response to the consultation later in 2021, and by early 2022 these changes should be enforced.
Spot checks to reduce the spread of Covid-19 continue
The HSE announced in November that it is continuing to carry out spot checks and inspections to ensure businesses are working safely and continuing to reduce the risk posed by Covid-19 transmission in the workplace. Its latest advice on keeping workplaces safe covers the measures that may be required to protect workers, customers and others from the virus.
There is also guidance on talking to workers about preventing coronavirus. As the pandemic continues, businesses must ensure that risk assessments are continually updated and appropriate measures are in place to reduce the risk of transmission.
The government's working safely during coronavirus guidance has also recently been updated with additional information on managing risk, self-isolation, ventilation and reducing contact for workers.
Building Safety Bill
The Building Safety Bill is making its way through Parliament. The Bill will introduce a new regulatory regime, with the HSE being appointed as the regulator, to enhance the fire and structural safety of new and existing residential buildings (with an initial focus on high rise). For more on the Bill, see our Insight, or watch our video series.
Contacts: Mary Lawrence / Matt Kyle
Rules on special administration regime for Payment and Electronic Money institutions
The Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021 came into force on 12 November 2021. As flagged in the previous Regulatory Outlook, the new rules contain detailed operating provisions to support the new special administration regime for payment and e-money institutions (pSAR).
Refinements to the draft pSAR rules include changes to:
- Require insolvency practitioners to provide a reasonable notice period before a claims bar date comes into effect.
- Clarify the full hierarchy of expenses.
- Require notice of a bar date to be given to everyone whom the administrator believes has a right to assert a security interest or other entitlement over the relevant funds.
- Require the special administrator to engage closely with payment systems operators during administration.
The government consultation response provides insights into the evolution of these rules.
FCA 'Dear CEO' letter on strong customer authentication (SCA) for e-commerce
On 6 October 2021, the FCA wrote to CEOs reiterating its expectation that firms fully comply with SCA requirements by 14 March 2022. Furthermore, the FCA reminded CEOs that firms failing to comply with the requirements after the migration date may be subject to supervisory or enforcement action, where appropriate. The FCA webpage on SCA has been updated to reflect this letter.
In the letter, the FCA confirms that its decision to provide the industry extra time was dependent on industry cooperation and firms acting in accordance with the agreed ramp-up plan to drive merchant readiness. See more on this topic in our previous Regulatory Outlook.
Contacts: Paul Anning/ James Turner
UK Product Safety Review: government publishes response
In our July Regulatory Outlook, we flagged that following Brexit, the Office for Product Safety and Standards had launched a call for evidence. The aim of this was to gather public and industry feedback on product safety laws and how the framework might be modernised.
On 11 November, the government published its response, setting out the key themes raised from the consultation. These included:
- The UK's regulatory system could be more explicitly based on risk, with higher requirements for tests, assessment and transparency for products.
- Challenges include the rapid growth of e-commerce and new technologies, affecting enforcement powers.
- Need for the future framework to be as simple and proportionate as possible, and consistent across legislation and powers.
The response concluded that the regulatory framework needs to be radically reformed in order to respond to the acceleration of change.
Consultation on the future regulation of medical devices
The Medicine and Healthcare products Regulatory Agency (MHRA) opened a consultation in September on the future regulation of medical devices in the UK.
The MHRA aims to develop a future regime for medical devices which enables: improved patient and public safety; greater transparency of regulatory decision making and medical device information; close alignment with international best practice; and more flexible, responsive and proportionate regulation of medical devices. The consultation closes on 25 November 2021.
It is expected that the government's response will be published in spring 2022 and the amendments that will create a new regime will be introduced at the beginning of July 2023.
Use of CE markings extended until 2023
The government recently laid the Product Safety and Metrology etc. (Amendment) Regulations 2021. These regulations extend the acceptance of certain products using the CE marking requirements when being placed on the market in Great Britain until 1 January 2023. It also allows businesses to attach the United Kingdom Conformity Assessed (UKCA) marking using a label or accompanying document until 1 December 2023.
Some goods already require the UKCA mark: those that have been manufactured in Great Britain and conformity assessed by a UK approved body. For all others the grace period has been extended to 1 January 2023.
This extension is to give manufacturers time to adjust to the introduction of the UKCA marking and to allow conformity assessment capacity in the UK to develop (for more on this, see our Insight).
Environment Bill receives Royal Assent
On 9 November, the Department for Environment, Food & Rural Affairs (Defra) confirmed that the Environment Act has become law, and confirmed that it has started work on developing legally binding environmental targets.
As flagged in our previous Regulatory Outlook, Defra has launched consultations on the deposit return schemes for drinks containers, extended producer responsibility for packaging and consistent recycling collections which will transform the way we deal with rubbish. The responses to these consultations are awaited.
European Commission 2022 work programme
In October, the European Commission published its annual Work Programme for 2022, entitled Making Europe stronger together. The programme includes initiatives that may be relevant to those advising UK exporters to the EU and would also be of interest to those wishing to stay informed generally about commercial law developments in the EU. Annex I sets out 42 new policy and legislative initiatives, including:
Zero Pollution Action Plan
- Revising the Classification, Labelling and Packaging (CLP) Regulation (EC/1272/2008)
Climate measures package
- Reviewing the F-gas Regulation 2014 ((EU) 517/2014), which seeks to reduce and control the use of fluorinated greenhouse gases (F-gases)
Plastics and packaging
- Policy framework for bio-based, biodegradable and compostable plastics
- Restrictions on microplastics
- Measures to reduce the release of microplastics in the environment
These initiatives are set to change the regulatory landscape.
Contacts: Katie Vickery / Thomas Stables
Taking account of carbon reduction plans in the procurement of major government contracts
Earlier this year the Cabinet Office published Procurement Policy Note 06/21 (PPN 06/21) "Taking Account of Carbon Reduction Plans in the procurement of major government contracts". This PPN requires suppliers bidding for major government contracts to commit to achieving Net Zero by 2050 and publish a "Carbon Reduction Plan" (see our Insight). On 1 October this PPN became "live" and so it is essential that the requirements of PPN 06/21 are being implemented.
Taking account of a bidder's approach to payment
On 21 October 2021, the Cabinet Office issued Procurement Policy Note 08/21 - Taking account of a bidder's approach to payment in the procurement of major government contracts (PPN 08/21).
The revised guidance applies for in-scope public procurements advertised on or after 1 April 2022, until then, PPN 07/20 continues to apply. It sets out guidance and actions for taking payment approaches into account in the procurement of major government contracts. The key update to PPN 07/20 is the increase to the threshold bidders have to meet to demonstrate they have effective payment systems in place to ensure the reliability of their supply chains.
You can also read the PPN 08/21 FAQs which include details on how to report payment data where supply chain finance is used.
Financial threshold amounts to be increased
On 1 November the government laid the Public Procurement (Agreement on Government Procurement) (Thresholds) (Amendment) Regulations 2021 (SI 2021/1221) before Parliament. The regulations will come into force on 1 January 2022.
The regulations update certain financial thresholds in the Defence and Security Public Contracts Regulations 2011 (SI 2011/1848), Public Contracts Regulations 2015 (SI 2015/102) (PCR 2015), Concession Contracts Regulations 2016 (SI 2016/273) and the Utilities Contracts Regulations 2016 (SI 2016/274).
In the PCR 2015, the threshold amounts will be increased to:
- £5,336,937 for a public works contract. The current threshold is £4,733,252.
- £138,760 for public supply contracts and public service contracts awarded by central government authorities, and their design contests. The current threshold is £122,976.
- £213,477 for public supply contracts and public service contracts awarded by sub-central contracting authorities, and their design contests. The current threshold I £189,330.
These changes do not affect any procurement begun before 1 January 2022.
See the explanatory memorandum.
Green Paper: transforming public procurement
The government is yet to publish its response to the Green Paper published in December 2020. It is also expected that it will introduce a new Public Procurement Bill, as reported in the previous Regulatory Outlook. The explanatory memorandum of the Public Procurement (Agreement on Government Procurement) (Thresholds) (Amendment) Regulations states that the response is to be published in autumn 2021 and goes on to note that "Legislation to reform public procurement will be introduced when Parliamentary time allows".
Contact: Catherine Wolfenden / Craig McCarthy
OFSI updates its charity sector guidance
Published on 1 November in response to the Taliban takeover of Afghanistan this year, the most recent update to the charity sector guidance aims to provide clarity on the Office of Financial Sanctions Implementation's (OFSI) approach to Afghanistan.
As certain designated persons are now claiming to be in positions of authority in Afghanistan, the situation is complex, so the guidance reminds charities that OFSI is committed to encouraging legitimate humanitarian activity and will work with non-governmental organisations (NGOs) and similar to provide clarity on challenging issues.
If operating in Afghanistan, charities and NGOs should seek to communicate with OFSI to ensure compliance with financial sanctions.
Contacts: Greg Fullelove /Jon Round
Ofcom's consultation on its proposal for 'one touch' switching of service providers
Earlier this year Ofcom launched a consultation on a new landline and broadband switching process and improved information for mobile switching. It published its response to the consultation this month, highlighting that it has decided that all providers must have the "One Touch Switch" process for all customers switching landline and broadband services in place by April 2023.
The new One Touch Switch process will replace the existing arrangements and means customers will only need to contact their new provider, who will arrange and manage the switch on their behalf. This change is to ensure all customers can use a process that is easy, quick, reliable and ensures they have given their informed consent.
Ofcom's new General Conditions of Entitlement
The changes that the GCs introduce include: the ban on selling locked devices to residential customers; requirements on accessibility of information; new rules for bundles; and requirements on contract duration and termination.
An unofficial consolidated version of the GCs can be found here. These updates to the GCs remains one of the key upcoming changes in telecoms regulation.
Development and potential change to the Electronic Communications Code
Earlier this year the Department for Digital, Culture, Media and Sport (DCMS) published a consultation on changes to the Electronic Communications Code. The aim of the consultation was to see whether changes to the code can help ensure that the UK has sufficiently robust electronic communications networks to deliver the coverage and connectivity consumers and businesses need.
It identified three main problem areas: issues relating to obtaining and using code agreements; rights to upgrade and share; and difficulties specifically relating to the renewal of expired agreements.
The consultation closed in March 2021 and the DCMS are still analysing the feedback so it is hoped a response on this will be published soon.
Telecommunications Security Bill
On 8 November 2021, the Bill was returned to the Commons for consideration of the Lords' amendments. Watch our recent webinar where we discuss the most recent developments in regard to the Bill.
National Security and Investment Act
For details on the National Security and Investment Act, please see Competition. (link to competition)
Contacts: Jon Fell/ Eleanor Williams