Brexit - fresh uncertainty for UK firms

20th of April 2023
Brexit - fresh uncertainty for UK firms

Swathes of EU-derived legislation look set to be scrapped in the UK by the end of 2023 in a government drive to ‘get Brexit done’ once and for all. But opponents of the move fear vital citizen rights and safeguards could be stripped away in the haste to push the reforms through, Hartley Milner reports.

Around 4,000 pieces of Brussels-based legislation would either be rewritten and incorporated into UK law or axed altogether under the controversial Retained EU Law (REUL) Bill, which received Commons approval on its third reading in mid-January.

The legislation includes consumer protections, food and product safety laws and regulations affecting animal health and welfare, as well as a raft of laws encompassing employment, workers’ rights and the environment… all of which could be watered down or lost, say the bill’s opponents.
Also causing alarm is a ‘sunset clause’ in the bill that allows for legislation not converted into UK law or revoked by December 31 to automatically drop off the statute book.

In the case of particularly complex laws, individual government departments will have the option to extend the deadline until 2026, but critics point to the complete lack of checks and balances incorporated into the process to ensure it is carried out with due diligence.

During last month’s parliamentary debate, a group of four Tory rebels, concerned the government would lack capacity to run a proper review and key laws could effectively “expire by accident”, voted for a Labour amendment that would have given MPs the opportunity to scrutinise any changes proposed by ministers. However the amendment was defeated, prompting one of the rebels, former Brexit secretary David Davis, to say of the bill: “It’s not democratic. But
it’s also going to be inefficient and possibly incompetent.”

Legal experts have gone further, describing the proposed legislation as not only “anti-democratic” but also “completely barking”. And the government’s independent regulation watchdog, the Regulatory Policy Committee, looked at the bill’s impacts and said it was “not fit for purpose”. The committee said in a statement: “It is our view that those affected by regulatory change should reasonably expect the government to properly consider the impacts of such changes. We are not assured that the impact of changing or ‘sunsetting’ each piece of REUL will be calculated or understood under proposals currently in place – particularly where no related secondary legislation is required.”

The watchdog also criticised the deadline for the assessment. It asserted that the government had “not given sufficient reasoning behind the decision to put this deadline in place”. And it said even civil servants acknowledge the time frame would challenge the resources of government departments with large amounts of EU-retained law to review.

The prime objective of the bill is to abolish the principle of the supremacy of EU law over UK law, which former British premier Boris Johnson had repeatedly decried as an “intolerable situation” for a country officially divorced from the European Union. Currently, UK courts are required to interpret EU-derived laws in line with rulings of the European Court of Justice. But legal experts say any changes will likely create uncertainty about how UK courts will interpret existing case law in future.

The bill could also have implications for Northern Ireland, say analysts. The Northern Ireland Human Rights Commission and the Equality Commission for Northern Ireland have warned that under the sunset clause many pieces of human rights and equality legislation agreed with the EU as part of the NI Brexit trading protocol would not be “preserved, restated or re-enacted” within the 2023 time frame and could, therefore, be lost.

However former Cabinet minister Jacob Rees-Mogg, who spearheaded the bill during his time in government, told Parliament that it was a “technical tidying up operation” aimed at “ensuring that UK law has one base”. And he said the legislation was being “enormously over-interpreted” by opposition MPs and “people who never wanted to leave the EU anyway”.

“What it is doing is correcting our statute book so that we no longer have laws that refer to European regulations that may themselves have been repealed or amended,” he said. “So currently we have rules that are based on things that are either out of date or possibly even no longer exist. That is no basis for our statute book. This is a technical, tidying-up operation, which will apply to the regulations that are kept. But it’s also technical in terms of ensuring that our law has one base.”

Confusion and disruption

However more than a dozen UK organisations, including employers’ groups, trade unions, consumer bodies, workplace safety campaigners and nature conservation bodies have warned that the “tidying-up operation” would cause “significant confusion and disruption” for businesses, workers, consumers and the environment. In a letter to business secretary Grant Shapps, signatories said dumping EU laws would plunge businesses into fresh uncertainty at a time when they are battling soaring energy bills and inflation.

Tony Danker, director general of the Confederation of British Industry, urged ministers to put aside political motives and seek improvements to the UK’s existing trade deal with the EU. And a survey of 938 businesses, comprising mainly SMEs, carried out by the British Chambers of Commerce (BCC) identified low awareness of the REUL bill among CEOs, as well as low levels of priority for deregulation.

Firms were also asked whether deregulation was a priority for them across the business areas of employment, health and safety, environment, planning and product safety regulations. Around half said deregulation was either a low priority or not a priority at all.

‘Assault on workers’ rights’

BCC head of trade policy William Bain said: “Businesses did not ask for this bill, and, as our survey highlights, they are not clamouring for a bonfire of regulations for the sake of it. They don’t want to see divergence from EU regulations, which make it more difficult, costly or impossible to export their goods and services.”

He added: “While removing barriers to SMEs’ growth would be welcomed, any proposals to amend or repeal thousands of pieces of retained EU law must be carefully examined and should not be rushed. That’s why the deadline on this bill must be pushed back to the end of 2026, to give everyone more time for the process to be consulted properly. Safeguards for businesses are also required, particularly for exporters and those trading within the UK so that additional barriers to doing business are not unwittingly created.”

Public service union UNISON said the bill was an assault on workers’ rights and would see core workplace protections like holiday pay, maternity pay and protection for part-time workers swept aside. It pointed out that for decades EU laws had ensured decent employment standards in the UK while shielding workers from exploitation and discrimination. Alongside these laws, EU legal principles had developed over time upon which the union says it came to rely on to secure key landmark rulings for workers’ rights.

The Retained EU Law Bill could “destroy all of these EU-derived laws, settled legal principles and case law, leaving UK workers in an employment law wasteland”, UNISON said. It could also have “devastating implications” for disabled workers and workers who have caring responsibilities for a disabled person. The union said that while the UK Equality Act 2010 will remain in place, EU legal principles that “put flesh on the bones” of the legislation would disappear.

UNISON national officer for disability equality Deirdre Costigan said: “This would be a shameful step backwards for disability equality at work. Already, many employers try to get away with disability discrimination by claiming the worker isn’t actually a disabled person. If existing protections are removed, and the legal definition of what it means to have a disability is narrowed further, it will make it even easier for employers to do this.”

Hundreds of environmental laws are also at stake, including those that protect wildlife, prevent pollution and create a level playing field for green businesses, according to Dr Richard Benwell, CEO of Wildlife and Countryside Link. “Simply scrapping the body of EU-retained environmental law would be environmental folly and spending time rewriting the rules would be a waste of time and public money,” he said.

Opposition expected

“Meddling with bedrock environmental laws like the Habitats Regulations will create doubt, uncertainty and instability for businesses at a time when they need stability the most. It would also jeopardise the government’s central green promises of hitting net zero and halting the decline of nature by 2030.

“The government has talked the talk on the international stage about restoring nature and curbing climate change. If it weakens protection for nature at home, the government could set back global green efforts as well. The UK needs to be leading the way for nature.”

The bill has now gone to the House of Lords where it is expected to face significant opposition from a large constituency of anti-Brexit peers, which could delay its progress into law. In fact, some peers have said there is “no chance” of the bill passing by the end of the year, due to it lacking “legislative horsepower”.


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