The King’s Speech has set out a wide-ranging legislative agenda for the year ahead, with measures on EU trade, energy, late payments, regulation, financial services and policing all carrying implications for UK retailers.
But while the government used the speech to underline its growth agenda, the British Retail Consortium warned that ministers must not allow politics to delay urgent action on the rising cost of doing business.
Responding to the speech, BRC chief executive Helen Dickinson said households were facing “yet another cost of living squeeze” as conflict in the Middle East drives up inflation and prices.
“Government cannot raise living standards without reducing the costs of doing business,” she said. “In the face of a looming inflationary storm sparked by the Iran crisis, government must act now to tackle rising energy, tax and regulatory costs at a time when many households are struggling to keep their heads above water.”
Dickinson added that while measures to drive long-term sustainable growth were important, “there is no excuse for allowing politics to get in the way of the immediate action needed”.
Her warning gives the retail sector’s response to the speech a clear edge. Many of the bills may shape the operating environment over the longer term, but retailers are pushing for faster intervention on costs that are already feeding through to prices.
One of the most closely watched measures will be the European Partnership Bill, which is designed to strengthen trade and investment ties with the EU. For food retailers, suppliers and manufacturers, the prospect of an SPS agreement could help reduce red tape and friction across the Channel.
The BRC described closer EU ties as a “golden opportunity” for food businesses, but warned that companies in Great Britain and Northern Ireland would need early, practical guidance to prepare for regulatory changes.
Small Business Britain also welcomed the government’s focus on trade. Michelle Ovens, CBE, CEO and founder of Small Business Britain, said strong international trade relationships were essential to maintaining the UK’s reputation as “a leader in cultivating wealth” while supporting an open economy.
The Small Business Protections Bill will also be significant for the sector. The legislation is expected to strengthen rules around late payments, a long-running issue for smaller firms and suppliers operating with tight cashflow.
Ovens said it was “encouraging” to see the government strengthen late payment legislation, describing it as “a vital step in helping entrepreneurs maintain financial stability and continue growing their operations”.
The BRC was more cautious, saying retailers rely on strong supplier relationships and that the “devil will be in the detail”.
It welcomed the focus on small business support and the exemption for payment arrangements between large businesses, but urged government to ensure the bill preserves the practical flexibility companies need.
Energy is another major concern. The Energy Independence Bill is intended to support clean power and improve energy security, but retailers will be looking for more direct action on commercial energy costs.
Dickinson said higher energy costs for retailers ultimately mean higher prices for consumers, and warned that the bill fails to include measures to reduce energy costs for the sector. She said non-commodity costs can account for up to 65 per cent of retailers’ energy bills, adding that further reforms are needed to make network charges more predictable and support local renewables, including solar.
Retail crime also featured in the response to the speech, with the BRC welcoming the potential role of the Police Reform Bill in strengthening coordination between police forces and tackling organised crime.
The trade body said retail crime costs retailers and customers hundreds of millions of pounds every year, with more than 1,600 incidents of violence and abuse taking place each day. It said more visible local policing would be essential to tackling shoplifting and violence in stores.
Meanwhile, the Enhancing Financial Services Bill will bring the Payment Systems Regulator under the Financial Conduct Authority. The BRC said the PSR had played an important role in addressing unfair card fees affecting retailers, and urged the FCA to continue that work through effective payments regulation.
For retailers, the King’s Speech offered a mix of opportunity and omission. There is potential progress on EU trade, late payments, policing and payments regulation, but the sector’s central concern remains cost.
As Dickinson put it, the decisions made by government “in the next few days and weeks” could have a major impact on the price of food and essentials for the rest of the year.
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