Retained EU Law (Revocation and Reform) Bill

Written evidence submitted by the British Chambers of Commerce (REULB 83 )

EXECUTIVE SUMMARY:

· The BCC  (British Chambers of Commerce)  is engaging with our members on how future regulation on employment and work, and on traded goods could look, and on how compliance burdens could be simplified.

· Our key principles applicable to regulation is that it should be legally certain, balanced in the way it applies, predictable in its process of amendment or removal, and not ordinarily impose additional costs upon businesses.

· The BCC seeks amendment of the sunset clause in clause 1 of the Bill to allow for more time for a comprehensive list of retained EU  law affected to be produced, considered,  and consulted upon.

· Business organisations and other stakeholders should be consulted on the substance of any amending or revoking provisions being considered by policy makers, ideally before the draft legislation is published or laid before the UK  Parliament or the devolved legislatures.

· The BCC is concerned there is no process on the face of the Bill for resolution of regulatory (or re-regulatory) differences between the UK and devolved governments fast-tracked by the Bill and no process for business to be consulted about the creation of potential new barriers to trade between England, Scotland,  and Wales on certain categories of traded goods. There needs to be a clear scrutiny process to assess the impacts of changes, as well as unintended consequences.

· The BCC runs the UK’s leading independent research programme – we have seen no clear signal from businesses that mass-deregulation is a priority at present, nor that there is a clear desire to remove categories of regulations, but there are some specific areas of employment legislation that could be revised to better reflect working practices in the UK. By contrast, we receive clear signals about the widespread impacts on business of inflation, global trade disruption, and new requirements flowing from the Trade & Cooperation Agreement (TCA).

ABOUT THE BRITISH CHAMBERS OF COMMERCE:

1. The British Chambers of Commerce represents and campaigns for business.  Our roots are local, but our reach is global. We are owned by, and work for, a network of Chambers of Commerce that champion and support our members across   the UK and in countries and markets around the world.  Our unique perspective gives us unparalleled insight into British business communities – every sector, every size, everywhere.  They trust us to be their advocates, and we are passionate about helping them trade and grow.  Working together with Chambers, we drive change from the ground up – and our bottom line is helping companies, places and people achieve their potential.   

 

2. Across the UK, the 53 Accredited Chambers that make up our network are trusted champions of businesses, places, and global trade. Together, we represent tens of thousands of businesses of all shapes and sizes, which employ almost six million people across the UK. Our growing Global Business Network also connects exporters with over 79 markets around the world.   

   

3. Working together, we help firms of all sizes to achieve more. We believe it is our relationships with others that lead us to achieve goals beyond those we could ever achieve alone. We are   the only organisation that helps British businesses to build relationships on every level, in every region and nation of the UK. Our network exists to support and connect companies, bringing together firms to build new relationships, share best practice, foster new  opportunities,    and provide practical support to help member businesses trade locally, nationally,   and globally.    

SUBMISSION:

4. The BCC has liaised with our specialist policy groups on trade and employment regulation since the Retained EU  Law (Revocation and Amendment) Bill was announced in the Queen’s Speech this May. We have also gathered recent survey finding from Chambers’ Network member firms, in the SME  community to discover their priorities around the Bill and any legislative action to repeal or amend Retained EU Law thereafter.

5. Our approach to regulation is that it should be legally certain, balanced in the way it applies, predictable in its process of amendment or removal, and not ordinarily impose additional costs upon businesses. It should be widely and timeously consulted upon with proportionate grounds for evaluation and review with independent bodies as well as Ministers and their officials.

6. In October 2022, BCC undertook a national survey of 943 of its business members (96% of whom were SMEs ) testing awareness of the REUL  Bill, to what extent deregulation across a range of areas was a priority for them, and specific regulations they would keep, amend, or remove completely. Most  respondents were not aware of the REUL Bill’s potential impact on their business – 4% said they ’comprehensively understood’ the Bill’s potential impact, 25% ‘knew some details’, while 41% ‘knew no details’, and 30% were ‘not aware of the Bill’. When asked to what extent deregulation across a range of areas was a priority, 19% said deregulation was a ‘top’ or ‘high’ priority for planning regulations, 19% for employment, 18% for environmental, 16% for health and safety, and 12% for product safety. When asked to name a regulation they would remove completely, only 14% provided a view, with a wide range of topics cited by businesses, from ‘employment’ regulations generically, to UKCA , IR35, and specific sectoral regulations such as the requirement for EU health certificates for live shellfish.

7. There may be scope for amending some of the compliance requirements on employment regulation and removing aspects that are not relevant to the UK workplace, without affecting the balance of rights and obligations between employer and employee, or employer and contractor.  On traded goods, we find no business or trade case for amending the basis of regulation or standards from those in the body of retained EU  law. In both cases, UK Ministers already have  powers to amend or repeal retained EU law even without this current Bill.

8. In all scenarios we are mindful of the non-regression commitments on regulation made by the UK Government in the level playing chapters of the Trade and Co-operation Agreement (TCA) with the EU. We would not wish to see key trade provisions of the TCA being placed in doubt though disputes over whether the non-regression clauses have been breached.

9. Retained EU law is one of the key categories of rules and obligations relevant to business in the UK following EU exit and the end of the transition period. Withdrawal Agreement rules on citizens’ rights are another key area . The Protocol on Ireland/Northern Ireland and associated rules also fit into this category. Business was clear during the consideration of the EU (Withdrawal) Act 2018 that certainty on rights, obligations, and enforcement of existing rules was key to continued business growth. There was support for the approach taken by the 2018 Act to avoid ambiguities and important regulation being lost via a cliff-edge by preserving EU rules in a special category of UK laws. It also underpinned many of the concerns firms had around the underpinnings of the GB  and UK internal markets.

10. We have examined the Bill carefully since its publication. It seeks to remove primacy and direct effect from EU rules currently preserved by the 2018 Act as amended, and to alter some of the interpretative and precedent characteristics of preserved EU case law. It also seeks to create new processes for the amendment or repeal of preserved rules, particularly of retained direct EU rules (e.g., in the form of Regulations). In areas of devolved competences, the devolved administrations will have the ability to re-regulate according to their own preferences. There is no wider duty created by the Bill in relation to the operation of the market access principles underpinning the UK internal market.

11. The most significant parts of the Bill are those which create a sunset clause by which retained EU law which is not otherwise preserved or managed will expire on 31 December 2023. Alongside these are powers to be given to UK (and on occasion devolved) Ministers to assimilate retained EU law into a more bespoke UK form, to amend retained EU rules by a speedier process, to allow them to expire by the end of 2023, or to preserve them as they currently apply until the middle of 2026, in cases where regulation is particularly complex and requires additional time for consideration.

12. We are also concerned that the list of affected legislation published on the Cabinet Office dashboard of retained EU law is not complete, and that many more pieces of legislation may fall through the cracks if permitted to expire at the end of 2023 without being identified or scrutinised by business. Indications are that a further 1,400 pieces of retained EU legislation are in the National Archives, taking the overall total affected by this Bill to around 3,800. We would therefore seek amendment of the sunset clause in clause 1 of the Bill to allow for more time for a comprehensive list of retained EU law affected to be produced, considered,  and consulted upon. Amending the period for this process to be concluded until mid-2026 at the earliest appears one of the most feasible solutions available, although there may be others.

13. In terms of the UK Parliamentary or devolved Parliamentary processes by which any amendment or repeal of retained EU law takes place in our judgment that is not a matter we wish to comment upon. UK Ministers already have  powers to amend or repeal categories of retained EU law under the 2018 Act. This Bill removes the requirement that retained EU law originally in the form of EU regulations (direct retained EU law) can only be repealed through an Act of Parliament. We seek the right for business organisations to be consulted on the substance of any amending or revoking provisions being considered by policy makers, ideally before the draft legislation is published or laid before the UK Parliament or the devolved legislatures.

14. Chambers have expressed concerns about the different approaches to re-regulation which the UK Government and devolved administrations may take under the Bill, and the potential for the creation of intra-GB barriers to trade. The Scottish and Welsh Governments have indicated a willingness to regulate in devolved competences in line with EU regulatory approaches. The UK Government has indicated it wishes to remove EU regulatory approaches such as precautionary principles to move to a more risk-based approach to regulation. The Bill runs the risk of fast-tracking new barriers to trade in areas such as agri-food within the UK internal market in respect of GB  through the operation of the sunset clause as provided at the end of 2023.

15. We are concerned there is no process on the face of the Bill for resolution of regulatory differences between the UK and devolved governments fast-tracked by the Bill and no process for business to be consulted about the creation of potential new barriers to trade between England, Scotland,  and Wales on certain categories of traded goods. We are familiar with the processes in the UK Government-devolved administrations Common Frameworks post-Brexit, including the statutory Common Frameworks but there is no reference to these processes in connection with the powers provided to UK and devolved Ministers in the Bill. A delay beyond 2023 on the operation of the sunset clause would allow processes to be developed to allow regular reporting to the Office of the Internal Market on potential intra-GB retained EU law divergence on re-regulation, and how business and other stakeholder concerns will be considered  by UK Government and devolved administration Ministers and officials.

November 2022