Retained EU Law (Revocation and Reform) Bill

Written evidence submitted by Make UK (REULB62)

R esponse to the Retained EU Law (Revocation and Reform) Bill call for evidence

Introduction

1. Make UK is backing manufacturing - helping our sector to engineer a digital, global, and green future. From the first industrial revolution to the emergence of the fourth, the manufacturing sector has been the UK’s economic engine and the world’s workshop.

2. The 20,000 manufacturers we represent have created the new technologies of today and are designing the innovations of tomorrow. By investing in their people, they continue to compete on a global stage, providing the solutions to the world’s biggest challenges. Together, manufacturing is changing, adapting and transforming to meet the future needs of the UK economy. A forward thinking, bold and versatile sector, manufacturers are engineering their own future.

3. Make UK supports the UK’s ability to legislate differently in the future to ensure our global competitiveness. However, the deadlines currently proposed in the Retained EU Law (Revocation and Reform) Bill risk creating significant challenges for businesses who need as much certainty and predictability as possible in the current investment climate. Policy and legislation in the areas affected by the Bill should be set based on long-term policy objectives and supported by a detailed industrial strategy.

Potential consequences for manufacturers

4. Manufacturers are still adjusting their operations to reflect post-Brexit changes and recovering from the Covid-19 pandemic. They are also currently facing an energy emergency, ongoing supply shortages, and a skills crisis, while working hard to equip their businesses for the journey to net-zero. The Retained EU Law (REUL) Bill risks adding further significant challenges and uncertainty in the business environment at an already unpredictable time for UK employers.

5. According to the Government’s own interactive dashboard, where users can view the 2,417 items of retained EU legislation, there are 348 laws which directly affect the manufacturing sector. The real number of retained EU laws which are relevant to manufacturers is likely to be much higher when taking into account the fact that retained EU law extends to all matters of business. Much of the UK’s regulatory environment for business has been derived from EU law for decades as legislation on employment, social, environmental, health & safety policy as well as corporate and product rules have been either an exclusive competency of the EU or shared with Member States. This means that to provide businesses with a stable and predictable operating environment majority of this legislation would either have to be retained or rewritten. The REUL Bill itself gives no indication of which laws the Government intends to keep and which laws will be revoked, and there is no view set out by the Government elsewhere of how individual pieces of legislation might be replaced, reformed or We have set out below a summary of those areas of retained EU law which we consider to be of greatest concern to the manufacturing sector.

Employment law

6. The Working Time Regulations (WTR), derived from the Working Time Directive, ensure that there are weekly working time limits of 48 hours, rest breaks during any shift over 6 hours, minimum daily rest periods, minimum weekly rest periods, properly paid annual leave, and extra protection for night workers. Other employment laws which may be removed or altered as a consequence of the REUL Bill include the right to take parental leave, key aspects of the law on equal pay, parts of the regulation on the transfer of undertakings (TUPE), as well as the regulations that provide protections for fixed-term employees, part-time workers and agency workers.

7. It should be noted that once employment rights such as those enshrined in the WTR have been granted to workers, removing them is a long and difficult process; some rights may over time become contractual, making change even harder. As a result, it is important that the Government’s intentions for future legislation in this regard are clear to avoid any uncertainty for both employers and employees over the status of employment rights which continue to exist in individual contracts of employment.

8. Employers are concerned with how the REUL Bill will affect employment legislation particularly because Government has dropped their promise of enacting the Employment Bill. The absence of the Employment Bill in this parliament has contributed to continued uncertainty over particular aspects of labour market regulation, and the impact of the REUL Bill being pursued without a clear set of policy objectives for the employment law within its scope risks further uncertainty.

Occupational Health and Safety

9. Within the scope of retained EU law, there is key legislation designed to ensure safety and good practices in the workplace. This includes a range of measures such as noise control, control of hazardous substances and the provision of personal protective equipment. Other key pieces of legislation which fall within the scope of the REUL Bill as retained EU law include: the chemicals regulation known as REACH, which impacts the environment as well as health and safety; and the Management of Health and Safety at Work Regulations 1999, which requires employers to conduct risk assessments to ensure occupational health and safety. These are crucial laws which are specifically designed to protect workers from harm and provide a clear regulatory framework for employers.

Consumer health, safety, and rights

10. Another cause for concern is the potential consequences that the REUL Bill could have on consumer matters. Under retained EU law, businesses must prioritise food safety. Food and drink manufacturers are obliged to provide the correct allergen and nutritional information for consumers. Retained EU law also requires food production companies to adhere to rules on chemical or decontaminant use on food, such as chlorine washes on meat.

11. Retained EU law also currently protects consumers’ rights. Legislation such as the Consumer Protection from Unfair Trading Regulations 2008 prohibits traders from misleading or deceiving consumers. Not only are these laws crucial for consumer rights protection, but traders across all industries also rely on them as a means of protection and as guidelines for how to conduct business properly.

Environmental protection

12. A large portion of retained EU regulation serves to protect the environment and enhance sustainability. There are, according to the BEIS interactive dashboard, 570 pieces of legislation relating to the environment alone. These laws focus on wildlife protection, nature conservation, freshwater quality and pollution, among other environmental concerns. However, many of these laws are important to businesses, as they provide guidance on important aspects of industry. From packaging to waste and recycling, the protection of their workers from harmful chemicals (REACH) and the harmonised classification, labelling and packaging of substances (CLP), there are hundreds of retained EU laws to which manufacturers adhere. These laws are increasingly important for manufacturers as they decarbonise their businesses and as the sector plays its part in the journey to net-zero.

13. In addition, significant elements of the support packages for Energy Intensive Industries, derive from EU law and permitted exemptions. This would mean redesigning elements of the energy market and pricing in the middle of an energy crisis. Replacing the current complex mix of levies and rebates would take considerable time with no clear assessment of the impact and unintended consequences for both industry and the energy companies.

Concerns regarding some provisions of the REUL Bill

14. The Bill risks unnecessary uncertainty for businesses. There may be opportunities for UK businesses arising from the Bill. Make UK supports the UK’s ability to legislate differently in the future to ensure our global competitiveness, and looks forward to engaging in the future design of domestic legislation in the areas covered by the Bill to ensure they achieve this goal. However, the current approach to the Bill and the operation of the sunset clause risks creating uncertainty for businesses. For example, by abolishing direct effect and scrapping the supremacy of EU law and the general principles of EU law, the effect of the REUL Bill is that a dispute as to the meaning of a legal right which arises in December 2023 may have a completely different outcome from one which arises in January 2024. The impact of this, together with the increased likelihood of departure from retained EU case law via litigation, could be significant.

15. More clarity is needed over which individual pieces of legislation will change or be replaced. Within the provisions of the Bill, there is no indication of which laws might be revoked or reformed, nor any precise confirmation of how many individual laws are in scope of the Bill. This needs to be clarified as soon as possible.

16. The sunset deadline is too ambitious. The sunset date of 31st December 2023 does not allow sufficient time for all retained EU law to be reviewed, revised, and any changes or replacement laws enacted. There is no way to envision how the task will be carried out within this timeframe without creating uncertainty a risk of unintended consequences. There is a clause within the Bill which will allow ministers to grant an extended sunset date for specific laws, no later than 23rd June 2026, marking a decade since the EU referendum. Although this date is more realistic and will grant civil servants more time to carry out the work, having potentially multiple sunset dates for different legal areas similarly risks creating confusion.

17. The process of reviewing, revoking and reforming retained EU law requires more parliamentary and external scrutiny. In its current form, the REUL Bill provides that all retained direct EU legislation is treated as secondary legislation, such that it can be amended in the same way as ordinary domestic secondary legislation. The only restriction is that any replacement provisions must "not increase the regulatory burden". It is important that there is sufficient parliamentary scrutiny of both the REUL Bill and subsequent changes to individual items of legislation, and that external stakeholders are also consulted where there are significant changes being made to the design and policy intent of legislation.

18. The Bill could undermine the powers of devolved governments. Devolved governments have voiced their apprehension about the REUL Bill. There are worries that it will directly interfere with devolved legislation and breach the Sewel Convention. The Scottish Government has lodged a legislative consent memorandum, inviting MSPs to withhold consent for the Bill. It is unclear how many retained EU laws come under reserved legislation and how many under devolved legislation.

Make UK recommendations

19. Reassurance is needed. It is important that the UK’s manufacturers are not left guessing for the next year about the status of different aspects of legislation and regulation. The Government needs to be clear about which laws they will be targeting to provide reassurance and certainty for businesses. The preservation of employers’, employees’ and consumers’ rights, as well as protection of the environment and facilitation of trade must be prioritised and details of how this is to be achieved should be set out clearly by the Government.

20. Work with industry to ensure key legislation and its interpretation in the case law is not lost. The Government must listen to the concerns of manufacturers and other employers. The focus should be on strengthening existing legislation if needed, not threatening to remove key elements of the UK statue book and settled case law interpretation based on an ideological hostility to any law that originated from the EU. What is needed is a more strategic approach, setting out a vision for sectors and working backwards to assess current legislation and over time replacing with a legislative environment designed to deliver shared objectives.

21. Review the timeline. The sunset date of 31st December 2023 is likely to prove too ambitious to review at least 2,417 pieces of retained EU legislation across 30 unique policy areas and deciding whether to retain, amend, or remove them. The REUL Bill contains an extension mechanism allowing ministers to postpone the sunset date until 2026 in individual cases. A more sensible approach may be to simply set 2026 as the standard sunset date from the outset.

22. Bring forward an Employment Bill. Relevant measures on employment law should be incorporated into an Employment Bill, ensuring that changes to employment rights and labour market regulation receive full parliamentary scrutiny and are considered holistically alongside other employment reforms.

November 2022