European Scrutiny Committee
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From: Sir William Cash MP
15 May 2023
Rt Hon. Rishi Sunak MP
Prime Minister
10 Downing Street
London SW1A 2AA
Change in Government policy on Retained EU Law and the Retained EU Law (Revocation and Reform) Bill
Dear Prime Minister
On 21 July last year, after a five month inquiry, my Committee reported on the future of Retained EU Law (REUL). During our inquiry, we heard in evidence from 13 expert witnesses and the (then) Secretary of State for Business, Energy and Industrial Strategy, Rt Hon. Jacob Rees-Mogg MP.1 Shortly after we reported, the Government published the Retained EU Law (Revocation and Reform) Bill (REUL(R&R) Bill). The Government engaged with our work and we were pleased to see a number of our recommendations given effect in the REUL(R&R) Bill.
Recent Government engagement and the Secretary of State for Business and Trade's non-attendance before the Committee
This experience stands in stark contrast to our more recent engagement with the Government on the Bill. On 24 February, we invited the Secretary of State for Business and Trade, Rt Hon. Kemi Badenoch MP, to give evidence to us on the Government's progress on the REUL(R&R) Bill and its 'Brexit opportunities' work.2 We have written twice since, requesting her attendance before the Committee.3 On Thursday 11 May, I asked her on the floor of the House if she would appear before us, as did Rt Hon. David Jones MP.4
1 https://committees.parliament.uk/work/6492/retained-eu-law-where-next/
2 Letter from Sir William Cash MP to Rt Hon. Kemi Badenoch MP, dated 24 February 2023
3 Letter from Sir William Cash MP to Rt Hon. Kemi Badenoch MP, dated 31 March 2023; and Letter from Sir William Cash MP to Rt Hon. Kemi Badenoch MP, dated 19 April 2023
4 HC Deb 11 May 2023, vol 732, cols 439 and 446
The Secretary of State is yet to commit to appear before the Committee. This state of affairs is unacceptable: Select Committees are vital to effective scrutiny and good law- and policy-making. A Select Committee should not be put in the position where it has asked a Secretary of State to appear five times to give evidence, over three months, without a clear commitment being forthcoming. The Secretary of State's failure to appear has frustrated our work on REUL and Brexit opportunities, and is not an issue I would ever have expected to be raising with a Prime Minister.
This situation has taken on a more concerning hue in recent days. As you are aware, on Wednesday the Government tabled amendments in the Lords to the REUL(R&R) Bill. These amendments signal a significant change in the Government's policy on REUL. The House was informed of this change in a Written Ministerial Statement on Wednesday afternoon and adequate explanatory materials, such as a White Paper, have not yet been forthcoming.5 This series of events was deemed so serious by Mr Speaker that he granted my Urgent Question (UQ) on the matter on Thursday morning. Save for my UQ, Members would not have had an opportunity to question the Secretary of State on the Government's plans ahead of Lords Report Stage, which starts today. This approach to scrutiny is deeply concerning and a worrying parallel can be drawn with how the Government handled the Windsor Framework: a major policy announcement accompanied by artificially set deadlines with no meaningful opportunity for input by Members. We hope this is not a trend that will continue. Parliament and the scrutiny function entrusted to us by the electorate are too important to ride over roughshod.
On the content of the Government's amendments to the REUL(R&R) Bill, we have serious concerns about: (i) the removal of the 'sunset Clause'; (ii) the Schedule of REUL to be revoked; and (iii) the Government's policy on REUL and its Brexit opportunities work.
i. The removal of the 'sunset Clause'
Clause 1 of the REUL(R&R) Bill, as introduced, would 'sunset' EU-derived domestic subordinate legislation and retained direct EU legislation on 31 December 2023. It would ensure that the majority of REUL would cease to exist on the domestic statute book as of the end of the year (unless specifically retained). The December 2023 sunset was justified by the Government as necessary to "accelerate reform and planning for future regulatory changes, benefiting both UK businesses and consumers sooner".6 The Government also said upon the Bill's publication:
5 HCWS764 [on Regulatory Reform Update], 10 May 2023
6 Explanatory Notes to the Retained EU Law (Revocation and Reform) Bill [Bill 156 (2022-23)—EN], para 17
The sunset will increase business certainty by setting the date by which a new domestic statute book, tailored to the UK's needs and regulatory regime will come into effect.7
Clause 2 of the Bill would allow the sunset to be extended beyond 31 December 2023 "ensuring the efficiency of the REUL revocation process should a lack of parliamentary time, or external factors, hinder progress towards reform of retained EU law prior to the 2023 sunset date".8
The Government amendment tabled in the Lords on Wednesday would remove the default sunset clause and, by virtue of this change, also remove the ability for it to be extended. Instead, only legislation listed in the Schedule would be revoked.
In a letter to the Committee on 10 May,9 the Secretary of State stated that the removal of the Bill's sunset would "provide certainty for business by making it clear which regulations will be removed from our statue book". This argument and that justifying the sunset clause on the introduction of the Bill are mutually contradictory.
The Secretary of State has referred to the Bill as pursuing a policy of 'preservation' of REUL. This is wrong. The Bill, as drafted, would revoke all EU-derived subordinate legislation and retained direct EU legislation on 31 December, apart from that explicitly singled out to be saved. The Government's amendments on Report in the Lords would preserve all 4,000 plus instances of REUL identified, minus those covered in the proposed new Schedule (600) and those instances to be dealt with elsewhere (e.g. the under the Financial Services and Markets Bill).
A well-resourced REUL identification programme, which was promised by the Government in January last year, coupled with effective Ministerial oversight, would deliver the certainty business rightly demand and the effective and nimble post-Brexit statute book they have been promised. Clause 2 of the Bill was a sensible inclusion that could be exercised should progress towards the reform of REUL not be as quick as anticipated. It is unclear why this safety net is now deemed insufficient.
7 ibid, para 18
8 ibid, para 19
Letter from Rt Hon. Kemi Badenoch MP to Sir William Cash MP, 10 May 2023
ii. The Schedule of REUL to be revoked
The Government amendment tabled in the Lords would replace the clause 1 sunset mechanism with a Schedule of around 600 pieces of REUL to be revoked at the end of December this year.
It is important to remember the reasons why the Bill was introduced. In its 'Benefits of Brexit' policy paper, the Government said "[we] will now prioritise areas where reform of retained EU law can deliver the greatest economic gain".10 In her letter of 10 May, the Secretary of State says "the Government are committed to lightening the regulatory burden for businesses and helping to spur economic growth". It is clear that the vast majority of instances of REUL to be revoked under the Schedule would do no such thing.
Our initial assessment shows that, almost without exception, the REUL detailed in the Schedule relates to matters that are trivial, obsolete and are not legally and/or politically important. Revocation of this REUL cannot be construed as lightening the regulatory burden for businesses or spurring economic growth. This is a worrying mischaracterisation and begs the question as to what the real purpose of the Schedule is.
Examples of REUL that would be revoked under the Schedule include:11
• temporary exemptions to repealed EU rules on limits to working hours for drivers during
the 2001 foot-and-mouth outbreak;
• authorisation for EU Member States to ratify the 2006 Maritime Labour Convention;
• rules on the allocation of fishing opportunities for the Democratic Republic of São Tomé
and Príncipe; and
iii. The Government's policy on REUL and Brexit opportunities
The Government's Benefits of Brexit paper was also clear that REUL would be reviewed to meet the UK's priorities, with a view to "unlocking growth" and making sure it is "tailor-made for the UK market".12
10 HM Government, 'The Benefits of Brexit: How the UK is taking advantage of leaving the EU' (January 2022), p31
11 HL Bill 117(n) Amendments for Report. The Schedule begins at page 5 of the Lords amendment paper.
12 HM Government (n 10) p20
The policy paper was published in January 2022—almost a year and a half ago—and states "the Government will now prioritise areas where reform of retained EU law can deliver the greatest economic gain."13 This task was deemed sufficiently important by the Government that a dedicated 'Brexit opportunities unit' was setup working out of the Department of Business, Energy and Industrial Strategy and charged with coordinating and setting the methodology for the identification of REUL across Whitehall.
The REUL(R&R) Bill is the mechanism through which the Government's Brexit opportunities work was to be delivered. We have been concerned since the start of the year that the Government's Brexit opportunities work, including that identifying REUL, has not been progressing as promised. I restate our suggestion, which I made to the Secretary of State on 24 February, that the Government should appoint a REUL 'Tsar', tasked with ensuring the Government delivers on its commitments.
The Government must restate its plans for the substantive reform of REUL. This is necessary in light of the aforementioned uncertainty, the broad powers the Bill provides Ministers to amend REUL and the Government's desire to provide clarity and certainty to businesses moving forward.
We request a full update on the status of the Government's Brexit opportunities work, the areas it is prioritising for reform through the Bill, and when these changes are now scheduled to take place. We also ask you to ensure the appearance of the Secretary of State before the Committee in good time.
I request a response to this letter as a matter of urgency, owing to the Government scheduling Report Stage of the REUL(R&R) Bill in the Lords for today and Wednesday.
I am copying this letter to the Secretary of State for Business and Trade, Rt Hon. Kemi Badenoch MP.
Regards
Sir William Cash
Chair
13 ibid p31
The Letter is available to download HERE
