The UK election: All “Change” for companies providing products and services on the UK market?

Possible impact on product companies operating on the UK market

Those we consider to be key highlights include:

• Artificial intelligence (“AI”): If the Labour party wins, product companies can expect black letter legislation regulating AI, particularly in respect of the most powerful AI models. They can also expect the introduction of a new Regulatory Innovation Office (see further below). On the other hand, if the Conservatives remain in power, the current light-touch, context-based approach to AI regulation and the avoidance of overarching AI laws is likely to continue in the UK.

• Online safety: The Conservative party introduced the Online Safety Act (“OSA”), which was enacted last year and introduces a new regulatory regime for providers of online services. They remain committed to building on the OSA by consulting on further measures to protect child safety online, including in relation to age verification and parental controls. For example, legislation to ban mobile phone use in schools (upgrading from current guidance) can be expected as part of this commitment. The Labour party however promises to go further, and “build on the [OSA], bringing forward provisions as quickly as possible”, making promises to tackle "significant harm online, with inappropriate content too easily available" for children and to give coroners further powers to access information held by social media companies on the death of a child if they are brought into power. This suggests there would soon be new online safety legislation, or significant amendments to the existing OSA, under a new Labour Government.

• Product compliance and checks: The election of a new parliament, following the previously elected parliament in 2019 at the height of the Brexit difficulties, allows for a much more sustainable approach to recalibrating the UK’s relationship with the EU. The two major parties have both reiterated their commitment to staying outside the EU, however, Labour is likely to deepen its EU ties should they win, meaning more alignment with EU product-related compliance requirements. If the Conservatives win however, there is more likely to be a focus on reform for proportionate business obligations and industry-led standards, with a focus on reducing the burden of regulation – and thus an expectation in further divergence from EU requirements.

• Regulator powers and investment: More regulatory oversight of ‘big tech’ is likely if a Labour government is appointed, given they consider current UK regulators to be "ill-equipped" to handle fast-evolving new technologies. To combat this, they have committed to establishing a Regulatory Innovation Office – which will act as the new "regulators' regulator”, setting targets for decisions and seeing enforcers' performance marked against international counterparts. No such new regulator is envisaged by the Conservatives.

• Litigation funding: While Labour’s manifesto does not address this topic, we see potential for the re-introduction of the Litigation Funding Agreements (Enforceability) Bill in support of litigation funding agreements and reversal of the PACCAR ruling if this party wins the UK election. The Conservatives on the other hand expressly pledge support for the legal services sector in their manifesto, including through an Arbitration Bill and third party funding.

Will it be all “Change”?

Starmer's manifesto is notably titled “Change”. Despite this, and all polls currently predicting a Labour victory, no policies or specific details are set in stone until the new government introduces them.

All will be revealed after the new Parliament meets on 9 July 2024, which will be followed by the State Opening of Parliament and King's Speech on 17 July 2024. It is on this date when the newly appointed Parliament will outline its legislative and policy priorities for the months ahead.

Regardless of which way the election goes, companies placing products and providing services on the UK market can expect stronger regulation, especially where digital and AI products are concerned, to form part of the future agenda.

Hogan Lovells Global Products Law team, along with its Public Law and Policy team, is monitoring developments closely.

For further details on Hogan Lovells Global Products Law team, our public law, policy and advocacy capabilities, or to discuss any questions you may have on how the currently uncertain political situation in the UK may impact your business, please get in touch.

Authored by Valerie Kenyon, Vicki Kooner, Robert Gardener, and Telha Arshad.