Legislation (laws)
• UK businesses have to comply
with laws passed by who?
• UK parliament, and the
• European parliament!
(sovereignty is an issue in the
EU referendum)
• In general Conservative
governments (like now) prefer
fewer regulations, because
they feel they are a burden to
business, whilst Labour
governments feel businesses
need to be controlled more
carefully
• Five main areas in which law
affects businesses
Consumer protection
• Why is it needed? In groups consider:
• What do you do if a product is faulty?
• Has this happened to you?
• Do you believe adverts are always factual?
Consumer protection
• Laws protect consumers from faulty goods, and from
unfair practices (eg exaggerated claims)
• Textbook now out of date, but 2 Acts (don’t need to
remember name, but rather the principles):
1. Consumer Rights Act (2015). This is a UK act
• All products, whether physical or digital must be of
satisfactory quality, fit for purpose and as described
• Right to return within 30 days (and some rights after then)
2. Consumer Protection from Unfair Trading Regulations
2008 (known as CPRs)
• Instituted as a result of an EU directive it protects consumers
from unfair or misleading trading practices and bans
misleading omissions and aggressive sales tactics
• “sale’s only on for another week”, “special price if you sign
now”, baiting prices (low price to lure customers in but don’t
have much stock and intend to sell something else)
Consumer protection
• Impact on business
• Purpose is of course to protect consumers, but it
also means firms cannot gain an unfair advantage
by taking short cuts
• Main impacts are what? Discuss
Employee protection
• Why is it needed?
Impact of employee protection
• What is the impact?
• Essentially abiding by regulations costs firms money,
and reduces the flexibility they have with changing
their workforce. Conservatives tend to prefer more
limited regulations, but the EU….
• Costs
• Costs money to comply with regulations
• Checking worker has the right to work in the UK
• Need to make sure all regulations are adhered to, including hiring
specialists to check adherence
• Higher labour costs from minimum wage and
maternity/paternal/maternity leave, pensions
• Fines for getting it wrong
• Loss of flexibility – eg workers can ask for flexible hours
Benefits of employee protection
• Level playing field – all firms have to pay at least a
minimum so cannot undercut by underpaying
• Improvement in employee welfare, which means
reduced absenteeism and increased motivation and
productivity
Environmental protection
• Why
• Examples
• Landfill tax – firms have to pay to deposit in landfill sites
• Environmental Protection Act – governs pollution (waste
management and emissions). Very bureaucratic, but firms
have to assess the impact of their business activities on the
environment. At least it leads to clean rivers, clean beaches
and supposedly clean air
• Note environmental protection increases costs of UK and EU
firms relative to firms in some other countries, eg in Asia
Competition policy
• In pairs. Quick research on energy firms
• Competition policy aims to ensure markets are
competitive, ie that firms compete with each other
not collude (agree) with each other to fix prices
Competition and Markets Authority
• Competition in the UK is overseen by the
Competition and Markets Authority (CMA), which:
• Investigate takeovers and mergers. Why?
• Investigate anti-competitive practices
• Cannot agree to fix prices, share a market, abuse a dominant
position etc
Health and Safety
• Quick research:
• how many workers died building the Olympic stadium for London 2012?
• How many have (reportedly) died building for the Qatar World Cup?
• How many workers died in 2014/15 in the UK?
UK vs other countries in Europe
Overall
• Legislation aims to create a level playing field
• Has many positives
• Consumers workers and environment protected
• But at a cost
• Costs to firms are much higher
• But the legislation applies in the EU (lots) more than in
the US, and much more than in developing countries