Key EU legislation relating to a raft of economic areas including laws relating to the standardised marketing and labelling of chocolate product ranges is potentially set to be axed under UK government plans. Westminster MPs voted through the first stage of the controversial EU retained law Bill – which is seeking to remove what it has stated as 2,400 pieces of legislation from the statute books that has remained following Brexit, allowing the business sector to adapt to a new trading environment.
However, the National Archives department has reportedly unearthed further 1,400 pieces of EU legislation, which together includes a broad expanse of subjects, from employment law, through to environmental and employment protections that campaigners, leading business groups, and civil organisations, have feared will lead to a ‘legal black hole’ under government plans of ‘a sunset clause’ to offer until just the end of this year to replace any removed legislation.
The government has claimed the move will enable greater deregulation for industry, though ministers have reportedly been unable to confirm just how many laws impacting on British legislation are being affected in total. But according to national media, a total of 60 groups including the Institute of Directors, National Trust, and Trades Union Congress have stated that the plans would ’cause significant confusion and disruption.”
Commercial law, including legislation governing the marketing and labelling of chocolate is also at stake as part of what media observers have described as a ‘bonfire of EU regulations,’ proposed by the former UK business minister Jacob Rees-Mogg, who described it as ‘a technical Bill of great constitutional importance,” with its core aim of removing the jurisdiction of the EU Courts of Justice over domestic UK law.
The Bill is likely to lead to increased uncertainty in 2 main areas:
Sunset date for majority of EU legislation: The Bill sets a “sunset” date of the end of 2023 for a large number of EU-derived measures (although there are some carve-outs – see below). Assuming the Bill becomes law as currently drafted, we may not know which measures are to be “saved” and which ones revoked until very close to that deadline. As a result, the Bill has the potential to create yet another Brexit-related cliff-edge for business. More generally, the Bill also confers very broad powers on the Government to change EU-derived legislation on a fast-track basis with only limited Parliamentary scrutiny (and no obligation to undertake public consultation). See section 2 and section 3.
Removing key principles of EU law: The Bill removes key principles of EU law which were retained in a limited form because they helped to ensure that retained EU law would continue to be interpreted and applied in the same way. In particular, it gives domestic legislation priority over EU-derived measures where there is a conflict, reversing the current position (which aimed to preserve the hierarchy established while the UK was still in the EU, under which EU measures could normally be assumed to take precedence). This may have unintended effects in some areas and is likely to lead to more disputes over alleged conflicts between retained EU law and “home grown” measures. See section 4. For discussion of the impact of removing other principles, see section 5.
Retained EU law is a new category of UK law which was created primarily in order to avoid “gaps” opening up in the UK statute book following Brexit and to provide certainty. Following the end of the Brexit transition period on 31 December 2020, the UK Government has placed considerable emphasis on the potential opportunities presented by its freedom to diverge from EU rules. Earlier this year, it announced its intention to bring forward a “Brexit Freedoms Bill”, designed to address concerns that reform of retained EU law was taking too long. It has now published that legislation, under the title “Retained EU Law (Revocation and Reform) Bill”. A number of aspects of the Bill are at the more extreme end of what had been expected – for example, previous announcements had not suggested that an expiry or “sunset” date for most of retained EU legislation was likely to be included.
What does the Bill do?
- Sets a “sunset” date of 31 December 2023 for the majority of retained EU legislation to expire
- Gives Ministers extensive new powers to amend or revoke retained EU law swiftly, with only limited Parliamentary scrutiny
- Reverses the current approach to conflicts between retained EU law and domestic law
- Removes general principles of EU law, including the requirement for courts to interpret retained EU law in accordance with those principles
- Introduces new measures designed to make it easier for UK courts to depart from retained EU case law
Section 1 of the Bill provides for all “EU-derived subordinate legislation” and all “retained direct EU legislation” to be revoked at the end of 2023. “EU-derived subordinate legislation” is likely to include many statutory instruments implementing EU Directives. “Retained direct EU legislation” is likely to include most EU Regulations which have been brought onto the UK statute book (such as UK GDPR). In practice, section 1 appears likely to apply to a very broad range of retained EU legislation (although there are important carve-outs relating to financial services and tax – see the end of this section). Examples of legislation likely to be in scope include measures relating to:
- Employment law, including legislation on working time and holiday pay, agency and part-time workers, TUPE and national works councils
- Data protection (although see under “Scope of sunsetting: points to watch” below)
- Company law, including regulations on company accounts and reports and audit, and other company law measures
- Environmental law, including measures which – if removed in their entirety – could put the UK in breach of commitments made in the UK-EU Trade and Cooperation Agreement and other international conventions and agreements
- Product standards, including measures imposing limits on harmful chemical substances in food and hundreds of measures implementing internationally agreed standards and safety requirements across a very broad range of other products
What if more time is needed?
If Ministers decide that they need more time, one option would be to reissue the legislation in a revised form, including one that (arguably) better reflects the UK’s own domestic legal traditions (see section 3). However, given the number of measures in question, it seems unlikely that there will be time to do this by the end of 2023 for all of the relevant legislation.
Assuming that the Government does not wish to allow the relevant legislation to simply expire (see below), the only other option provided for in the Bill is to extend the sunsetting deadline; clause 2 allows for extensions for specified measures up to 23 June 2026 (the 10th anniversary of the EU referendum result). Presumably the idea is that by 2026, it will have been possible to amend or restate all the retained EU legislation that the Government deems it necessary to preserve (although if this has not been possible, a future Government could simply give itself the power to keep certain pieces of retained EU law on the statute book indefinitely). However, when it comes to retained EU law rights (as opposed to the other types of retained EU law covered by section 1 of the Bill), there is no ability for the sunsetting deadline of the end of 2023 to be extended.
Scotland
Food Standards Scotland (FSS) is warning Scottish consumers of major risks in relation to food safety and standards if the Retained EU Law (Reform and Revocation) Bill is progressed in its current form. The Bill was announced in January 2022 and implemented to help facilitate easier amendment, replacement and repeal of retained EU law.
The Retained EU law currently enforces businesses to label for allergens and provide clear food labelling information to consumers. Maximum permitted levels of chemical contaminants in foods must be set, as well as restricting the use of decontaminants on meat. In essence, this law obligates businesses to maintain minimum levels of hygiene and to recall food that is unsafe.
The FSS believe the Bill, which was published on 22 September 2022, would result in the removal of consumer protections relating to food which have previously applied in Scotland and the rest of the UK for many years. Even if high legal standards continued to apply in Scotland, the agency says that the Internal Market Act means there would be no way of preventing goods produced under lower legal standards from elsewhere in the UK being sold in Scotland. The Internal Market Act, introduced in 2020, was opposed by the FSS due to significant concerns voiced by the agency that were ignored.
“At the heart of what we do, is our responsibility to protect Scottish consumers. This Bill, as it currently stands, poses a significant risk to Scotland’s ability to uphold the high safety and food standards which the public expects and deserves,” said Heather Kelman, Chair of FSS. “The purpose of regulators and regulations, especially in relation to food, is to protect consumers. This Bill confuses ‘red tape’ with consumer protection and indicates that the latter is now less of a priority and of less importance than when we were in the EU.”
Unless action is taken to save these standards in law and effectively maintain the protection of consumers – which would require a substantial resource in an extraordinarily short timeframe – these safeguards will disappear on 31 December 2023. “Whichever way consumers voted on Brexit, they did not vote for a race to the bottom of lower standards and a de-regulated landscape that reduces consumer protection. We cannot imagine that this is what the UK Government intends,” added Kelman.
Supporters of the Bill argue that it will help to boost the Government’s growth agenda by freeing business of the need to comply with burdensome or unnecessary retained EU law. Critics argue that it is now over 6 years since the EU Referendum, which should have allowed sufficient time already to undertake this exercise, and yet the Government has so far failed to identify a clear “hit list” of areas for targeted reform; instead, the Bill imposes arbitrary deadlines which leave the Civil Service with the choice of either offering up potential candidates for “sunsetting” without adequate consultation or Parliamentary scrutiny or devoting time and resources to the restatement of retained EU law which will ultimately change little in substantive terms.
There is clearly a case for speedier reform of retained EU law but there is a concern that the approach taken in the Bill risks creating significant uncertainty for business, especially as the initial sunsetting deadline of end of 2023 approaches. Businesses will need to plan for the removal of certain measures if they are allowed to expire and some would no doubt prefer to avoid this given the current economic uncertainty.
