EU Retained Law

Thursday 23rd June 2022 Lords Chamber

Statement

The following Statement was made in the House of Commons on Wednesday 22 June.

“With permission, Madam Deputy Speaker, I will make a Statement about EU retained law.

Earlier this year, my right honourable friend the Prime Minister set out that:

‘The United Kingdom’s uncoupling from the rules, regulations and institutions of Brussels was never simply about the moment of our departure; the act of Brexit was not an end in itself but the means by which our country will achieve great things.’

Now that we have left the European Union the sovereignty of Parliament has been restored and we are free once again to legislate, regulate, or deregulate as this sovereign Parliament redux pleases. As we maximise the benefits of Brexit and transform the UK into the most sensibly regulated economy in the world, we must reform the EU law we have retained on our statute book. Only through reform of this retained EU law will we finally be able to untangle ourselves from nearly 50 years of EU membership.

In September 2021 my predecessor, the noble Lord, Lord Frost, announced a review into the substance of retained EU law. The purpose of the review was to catalogue which departments, policy areas and sectors of the economy are most saturated by European law—law that was imposed upon us in a time when Parliament was unable to refuse consent. The road to reform remains a long one; not all Brexit freedoms can be grasped at once. I am pleased to report that Whitehall fired on all cylinders to complete this review. As a result, Members across the House can properly appreciate the extent of EU law on our statute book and the extent of the opportunities that reforming this law provides.

In the 2022 The Benefits of Brexit announcement, the Prime Minister committed to making the outcome of this review available to the public. It is right that the public know how much retained EU law there is and that they should be able to hold the Government properly to account for reforming it. The public have already shown great interest in the EU law that remains on our statute book, as evidenced by the huge amount of correspondence I received in response to my request for details of EU legislation that still burden them—and I am grateful to readers of the Sun and the Sunday Express for their many replies. I am also encouraging some competitiveness between my right honourable friends in the Cabinet, and hope that this spirit will inspire rapid reform, with returns published every quarter by departments.

Therefore, I am pleased to announce that today we publish an authoritative catalogue of over 2,400 pieces of legislation, spanning over 300 individual policy areas. This catalogue will be available on GOV.UK through an interactive dashboard. It will be updated on a quarterly basis so the public can count down retained EU law as the Government reform it. I commend the Cabinet Office officials who developed this dashboard; it is a fascinating resource in its own right, and is of both political and—in my view—historic constitutional importance.

The pertinence of publishing the dashboard today should not be missed. Six years ago tomorrow—that day of legend and song—the United Kingdom voted decisively to leave the European Union. The public voted to take back control, and while it took some time to get there—two general elections and some constitutionally fascinating parliamentary prestidigitation between 2017 and 2019—the Prime Minister has delivered such control in spades. His Brexit agreement, which guaranteed regulatory autonomy for Britain, means that the publication of this dashboard offers the public a real opportunity: everything on it we can now change.

The author EM Forster once said:

‘two cheers for Democracy: one because it admits variety, and two because it permits criticism.’

Therefore, as I did earlier this year, I am inviting the public from across the country—whether in Wakefield or in Tiverton and Honiton, or in other places selected at random for the purposes of illustration—to once again share their ideas of reform and to look further into pieces of retained EU law that have an impact on their lives. By using this dashboard, the public can join us on this journey to amend, repeal or replace retained EU law. Together we will make reforms that will create a crucial boost to productivity and help us bring the benefits of growth to the whole country.

Of course, Her Majesty’s Government are legislating to seize the opportunities of Brexit and have been since 2020. From introducing our points-based immigration system and securing the integrity of the United Kingdom’s internal market to boosting growth and innovation by allowing gene-edited crops and recognising high-quality professional qualifications, we are already showing—among others—the benefits of Brexit to the British people.

There are countless other opportunities for reform ahead of us. Members will know that the recent Queen’s Speech was full to the gunwales with the opportunities of Brexit, ranging from financial services to agriculture, data and artificial intelligence, transport, energy, and restoring sense to human rights law. This Government will work to develop a new pro-growth, high-standards regulatory framework that will give business the confidence to innovate, invest, and create jobs.

Those are the big, headline-grabbing issues, but the dashboard is, I hope, an opportunity to tackle hundreds of matters. They may seem marginal on their own, but all these measures in the margin will combine to usher in a revolution: not a French-style revolution with blood running in the streets and the terror of the guillotine, but a British-style revolution whereby marginal improvements move inch by inch so that soon we will have covered the feet, and the feet will become yards, and the yards will become chains and then furlongs and miles, until the journey is complete. With inflation running high, we need to search everywhere—under every stone and sofa cushion—for supply-side reforms that will make products and services cheaper, will make things easier for business, and, ultimately, will grow the economy and cut the cost of living.

The dashboard, therefore, is the supply-side reformer’s El Dorado, and, naturally, I am pointing to the treasure trove of opportunity that this publication represents. It highlights unnecessary and disproportionate EU regulations on consumer goods, such as those regulating the power of vacuum cleaners—why should that trouble Her Majesty’s Government?—and the expensive testing requirements mandated by REACH—the regulation on the registration, evaluation, authorisation and restriction of chemicals—for the plastics that make up items we use every day, requirements that shut out the newest and most innovative materials. Thankfully, we left the EU before it decided to mandate what sort of phone chargers we can have, a typically short-termist and anti-innovation measure which will only have a long-term negative effect for consumers.

The dashboard includes the overbearing reporting requirements which add costs to businesses and slow down progress, whether by building new developments in areas that need housing the most or by making it more expensive to hire people at a time of a labour shortage and to respond to militant strikers. We will continue to work with departments to cut at least £1 billion of business costs from EU red tape to secure greater freedoms and productivity. Ensuring that we have the right regulation is crucial. Excessive and unnecessary regulations which burden business or distort market outcomes, reduce productivity, pushing up prices and negatively affecting everyone’s cost of living. Using our new-found freedom to address the over 2,400 retained EU pieces of legislation on our statute book, the Government will be able to remove and amend regulation that is not right for the UK. This will make a real difference to the process of reducing the number of unnecessary EU regulations that contribute to the cost of living.

Some—perhaps dozens—of these rules we might wish to maintain. That will be a decision for the Queen in Parliament, our Parliament, rather than the European Commission. We will preserve retained EU law that is required for our international obligations. We will preserve high standards, such as those for water, and we may even be able to go further in some ways to move ahead of the European Union.

The publication of this dashboard will mark a pivotal step towards reform of our statute book and those 2,400 pieces of retained EU legislation, ahead of the introduction of the Brexit freedoms Bill. That Bill will allow the United Kingdom to take the next step in reclaiming the sovereignty of Parliament. It will address the European Union (Withdrawal) Act 2018, which preserved and incorporated too much EU-derived law at too high a status, giving much of it the same status as an Act of Parliament. That is clearly mistaken, and means that many changes to retained EU law require primary legislation.

Undoing this vandalism to our constitutional order policy area by policy area would dominate the legislative agenda for Parliaments to come, which would affect the Government’s ability to deliver more fundamental domestic reforms and the opportunity for the UK to reap the benefits of Brexit. The Brexit freedoms Bill will create a targeted power to allow retained EU law to be amended in a more sustainable way, and will go with the grain of the British constitution. This will help us to deliver the UK’s regulatory, economic and legal priorities.

Ahead of the Bill’s introduction, I invite Members to review the dashboard themselves, and to delve into the legislation that affects the communities that they serve.”

17:10

[Baroness Chapman of Darlington (Lab)]

I am grateful to the Minister for being here to answer questions on this Statement. We wonder about the Government’s priorities in the light of it. After all, yesterday was the day on which the Office for National Statistics announced that inflation had reached 9.1%—the highest level in over 40 years. We think that is of far greater concern for the country than anything in the Statement.

However, perhaps with today being the sixth anniversary of the EU referendum and the Conservative Party desperate not to lose its safe seat in Tiverton and Honiton, we can see why Jacob Rees-Mogg was deployed. The Government have long stated their intention to review retained EU law, and we await further details about the so-called Brexit freedoms Bill, which I am sure many across your Lordships’ House will take an active interest in. It was suggested that this was to be done via a default sunset clause that would delete laws unless Ministers prevented it. Has this madcap plan now been dropped?

Although there will be areas where it will make sense to amend or repeal retained EU law, we should remember that the framework in the 2018 withdrawal Act fed into negotiations on the withdrawal agreement and the TCA. We should have flexibility, yes, but we should also act in good faith.

In another place, the Minister failed to answer questions about the cost of this project, so could the Minister confirm what the costs are? Was the build of the dashboard put out to tender, for example? If so, have details of the contract been published in the usual manner?

In recent years, we have passed the Agriculture Act, the Fisheries Act, the Environment Act, the Subsidy Control Act and many other post-Brexit pieces of legislation. Each of these Acts presented the ideal opportunity to strip away retained law, but Ministers repeatedly chose not to do so. Is that not a sign that much of that body of law is actually highly technical and therefore not as contentious as the Government would like to make us believe?

The Statement speaks of identifying “supply-side reforms” to combat inflation. Have the Government calculated the likely economic benefit to be derived from this programme? If so, perhaps the Minister could share that figure with us. How does it compare to other measures the Government could take to support the economy?

Finally, could the Minister explain how the Government will balance economic and other considerations, such as animal welfare, consumer and environmental benefits? What principles would be applied? The Government lack direction, so how will Ministers know how to approach this task? This whole exercise looks like a gimmick. There is no detail about the Government’s intentions. All we have is a list—calling it a dashboard is stretching it. The best advice we can give Ministers is to focus their energy on interventions that would make a tangible difference to people who are struggling every day to make ends meet.

[Lord Wallace of Saltaire (LD)]

My Lords, I was not sure whether to laugh or cry when I read the Statement. It takes us into a surreal world of fantastical Government, in which, as the Minister for Brexit Opportunities declares,

“our country will achieve great things.”—[Official Report, Commons, 22/6/22; col. 866.]

That is like Donald Trump promising he will make America great again—just as windy and as empty of content.

There is no evidence behind this Statement. I challenge the Minister to find any. A great deal of evidence was gathered and analysed on exactly this issue between 2012 and 2015 in what was labelled the balance of competences exercise. Eurosceptic Conservatives in the coalition Government believed that an extensive survey of business, sector by sector, would produce a long list of unnecessary Euro regulations that the UK Government could then demand to be renegotiated.

Three Ministers oversaw this exercise: David Lidington, Greg Clark and myself—two Conservatives and a Liberal Democrat. Sector by sector the responses came in, saying that companies were happy with the current balance between domestic and European regulation. Several transport companies argued for greater emphasis on common European regulation rather than less of it. The Scotch Whisky Association, whose then chief executive was David Frost, now the noble Lord, Lord Frost, was particularly enthusiastic about the advantages of common regulation with the European single market. Of course, that was before the noble Lord’s damascene conversion from evidence-based argument to embittered opposition to everything European.

Can the Minister tell us what consultations the Government have conducted in the past year with large and small companies before committing themselves to diverge from EU regulations in the way Mr Rees-Mogg plans? My understanding is that UK exporters, both large and small companies, would much prefer the Government to maintain close alignment between UK regulations and those in our largest overseas market. Does the Minister have any recent evidence to the contrary? Does he understand that the Government have any recent evidence to the contrary?

The chimera of making a bonfire of regulations has appealed to the ideological right ever since Friedrich von Hayek and Milton Friedman. Belief in the superiority of unregulated markets has survived through stark evidence to the contrary, as in the loose regulations that led to the Grenfell fire. Margaret Thatcher understood that a well-regulated market is fundamental to a thriving economy, which is why she pushed for the common regulatory structures of the European single market. British Ministers and officials played a major role in creating that common single market. Many of the regulations that Mr Rees-Mogg is now denouncing were shaped by UK efforts, not imposed by foreign Governments on a powerless UK, as he is now suggesting—but Mr Rees-Mogg’s career has been entirely in finance rather than the real economy of production, marketing and exporting, and much of it offshore in Hong Kong, Singapore and other low-tax financial jurisdictions.

Mr Rees-Mogg is also the Minister for Government Efficiency. He notes in his Statement the extra work that Whitehall officials have undertaken to grasp these “Brexit freedoms”, as he puts it. He does not note that leaving the EU and setting up a range of national regulatory agencies to replace those we shared with our European partners has required a substantial increase in both the number of officials and the costs involved. Part of our contribution to the EU budget went towards funding those common agencies; some of them, such as Europol, were led by British officials. Yet at the same time as being Minister for Efficiency—that wonderfully odd phrase—Mr Rees-Mogg is pushing for a sharp reduction in Civil Service numbers, without regard to the additional tasks that it is taking on. Can the Minister explain how the Government propose to manage this additional effort while slashing the number of staff?

There are more windy comments in the Statement about restoring the sovereignty of Parliament, followed by the declaration that most of this will be pushed through under secondary, even tertiary, legislation, without effective parliamentary scrutiny. The illusion that we now stand imperially sovereign in the world, freed of the European yoke, is punctured by the letter that the noble Lord, Lord Grimstone, circulated yesterday, announcing that we are opening trade negotiations with the Gulf Cooperation Council—in which we will not mention civil or political rights so as to avoid offence. This Government are willing to negotiate and compromise with the GCC but not with our democratic neighbours. Can the Minister explain how giving concessions to the Gulf autocracies avoids limiting UK sovereignty while Mr Rees-Mogg insists that any compromise with the EU infringes on UK sovereignty?

Last night, I wondered whether the Minister might revolt as he attempted to justify this irrational ideological waffle and follow the example of the noble Lord, Lord Agnew, by walking out of the Chamber and the Government mid-Statement. However, I fear that he has not yet reached that point, despite the nonsensical Statement that he is forced to defend.

[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, there has been a rather obsessive theme from the noble Lord, Lord Wallace, today, who seems excited at the prospect that I might walk out of the Government. I can absolutely disabuse him of his expectation of that prospect. Unless the Prime Minister decides otherwise, I shall be extremely content to remain here and take the Brexit freedoms Bill through your Lordships’ House.

Having listened to the noble Lord, on the sixth anniversary of the Brexit referendum, I am inclined to say that the Liberal Democrat Party does not know whether to laugh or cry. His sneering response tells me that the Liberal Democrats, like the Bourbons of Naples, have learned nothing and forgotten nothing in their desperation to keep the United Kingdom in line with the European Union’s orders.

[Lord Wallace of Saltaire (LD)]

My Lords, I talked about what companies are saying to the Government, and that is about evidence. We are six years down the line from the Brexit referendum; by now we ought to be talking about what sort of relationship we have with the European Union.

[Lord True (Con)]

My Lords, the noble Lord has had one go, and I think I characterised his party’s position perfectly accurately. The party opposite gave a much more measured response and asked me some specific questions. He asked me one which I shall answer. Again, I am disappointed that, on this sixth anniversary, the Labour Party is still saying that it is not important, in effect, to examine these 2,400 elements of retained EU law, which have a status equal to United Kingdom Acts of Parliament. It is perfectly reasonable that those matters should be examined. My right honourable friend Mr Rees-Mogg made it very clear that it is not necessarily the expectation that all these will be swept away, as the noble Lord said. These matters will be looked at on their merits. Frankly, one of the examples that my right honourable friend gave in the other place was the power of vacuum cleaners. Perhaps if we had more powerful vacuum cleaners in this place, we would not have mice running around the place, gorging themselves on all the bits and pieces of crumbs that are left.

There is a serious issue here, despite what was said opposite. It is perfectly reasonable that departments examine the case for the continuation of this mass of regulations. This is the expectation of departments, in concert with interested parties. The noble Lord asked whether we had done consultation. We have engaged with a range of organisations with interest in retained EU law. We have worked closely with all departments, and their stakeholder groups through them across Whitehall. That engagement has included lawyers, academics, universities and other non-governmental organisations. More recently, it is well known that the Minister for Brexit Opportunities also issued a call to the British public, not I think through an organ widely read on the Benches opposite, on the regulations that they might wish to abolish—particularly focusing, as I think we should, on those that make life harder for small businesses, which shut out competition or simply increase the cost of operating. Through a large number of small changes, we can enact real economic change.

The noble Baroness asked about sunsetting, as she called it, and reports on that matter. The issue to which she referred is still subject to consideration of how the reforms will be carried forward in that respect. So far as the cost is concerned, I assure her that the dashboard was built by Cabinet Office officials using the Tableau software, and was created with no additional cost to Her Majesty’s Government.

As for the benefits, I give an undertaking to the noble Baroness on her perfectly reasonable and proper question that there will be an impact assessment published with the Brexit freedoms Bill when we bring it forward, and that will obviously be laid before your Lordships’ House.

17:23

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend for taking questions on the Statement. Of the 2,400 items of retained EU legislation, 570 come from the Department for the Environment, Food and Rural Affairs. I imagine that most of those of relate to phytosanitary, plant health, animal health, hygiene and welfare. If that is the case, does he not agree that most of those will in fact be retained as UK law after this exercise is completed?

[Lord True (Con)]

My Lords, I am not anticipating either way but as I said in my opening response, in reviewing retained EU law, Defra will obviously, as my noble friend asks, ensure that environmental law is fit for purpose and able to drive improved environmental outcomes while ensuring that regulators can deliver efficiently. It is an important piece of work that will make sure that the UK regulatory framework is appropriate and tailored to the United Kingdom. We have been very clear about our environmental goals and we do not resile from them. They are set out in the 25-year environment plan, the Environment Act 2021 and the net-zero commitment in the recently published Nature Recovery Green Paper. Any changes to environmental regulation in this context or any other will need to support those goals.

[Lord Bellingham (Con)]

My Lords, is it the intention of HMG to reform the EU Solvency II rules, which restrict investment by insurance companies to fixed-interest instruments, such as bonds? If we really do want to unlock further wealth and job creation, surely we need to allow insurance companies to invest in, for example, projects such as social housing and wind farms.

[Lord True (Con)]

My Lords, my colleagues in another department will have to answer on the specifics, but my noble friend is absolutely right to highlight that the area of financial services broadly is something of fundamental importance to the national economy, and indeed the Scottish economy. I assure him that my colleagues will continue to examine the areas of regulation to which he has referred, with a view to keeping our financial services sector dynamic and effective and a place where people from all over the world would wish to come and work.

[Viscount Stansgate (Lab)]

My Lords, I thank the Minister for the Statement. In the light of the remarks he has just made about consultation, and in advance of the Bill, can he tell the House what proportion of the measures that the Government hope to introduce will be promulgated by secondary, or indeed tertiary, legislation?

[Lord True (Con)]

My Lords, we are at the stage now where the dashboard has been published; submissions and comments will be made on it, and it will be refreshed quarterly. We will then have to consider the mechanisms. If it is decided that the regulation needs to be either repealed or substantially altered, we will have to consider the legislative mechanism, which would have to be case by case. When we publish the Brexit freedoms Bill, it will include elements that allow for the Government to implement their policies. At that stage, noble Lords will obviously be able to debate the appropriateness of the proposals that we put before them.

[Baroness Neville-Rolfe (Con)]

It is agreed by everyone that we have a productivity problem in the UK. As we have seen from history, one way of dealing with that is to sweep away anti-competitive legislation, including some that has been referred to in the debate. Does my noble friend the Minister agree that some operators benefit preferentially from their very existence and that it is essential to have the toughness needed to face them down? That can help small businesses, as my noble friend has said, and growth, and can, I hope, reduce bureaucracy. I am in danger of speaking for too long, but I mention that I have worked for most of my career in business and particularly welcome the promise to the noble Baroness, Lady Chapman, of an impact assessment on the Bill.

[Lord True (Con)]

My Lords, I am very grateful to my noble friend. It seems quite a long time ago that we were working in Downing Street on the aspiration of reducing regulation. She makes interesting points which one does have to bear in mind in consulting on and considering the way forward.

It is important that we make it easier for small businesses, and it is also true—I am not criticising anybody or any organisation in particular—that familiar regulatory environments, particularly complex ones, are not necessarily as perturbing to very large organisations which have large departments to deal with them as they are to small businesses and would-be innovators and entrants. That is a balance one has to consider across the regulatory environment, including in this exercise before us today.

[Lord Lilley (Con)]

My Lords, I recall that when I went to Brussels as a Treasury Minister or as Secretary of State for Trade and Industry, my brief to discuss forthcoming legislation and regulations invariably said, “Minister, we don’t really want this, but we can’t stop it. Could you try to seek at least one or two of the following half dozen amendments to it?” If we did achieve one or two, that was counted as a great triumph. Will my noble friend insist that departments go back to the briefs that were given to Ministers at the time the regulations went through and look for the changes that we wanted to secure but did not at the time? Will he also reflect on the irony of the Liberal Democrats complaining that secondary legislation will be used to change some of the regulations we inherited, given that they were all introduced under secondary legislation, which gave no option for Parliament to reject them at all?

Finally, since there is time for me to go on, will my noble friend reflect on the fact that the one thing we could do in the past was to gold-plate regulations, which we did? I pay tribute to my noble friend Lord Hailsham, on the privy counsellors’ Bench, who introduced a system to try to limit gold-plating of regulations when we implemented those of the EU. Will my noble friend the Minister make sure that when we modify these regulations, we do not succumb again to the temptation to gold-plate them and that we go back to the Hailsham dashboard—it was called something like that—to make sure that we do not make them more regulatory, rather than less?

[Lord True (Con)]

My Lords, a lot was wrapped up in there. I agree with what my noble friend said at the end and with his tribute to my noble friend Lord Hailsham. There is an eternal tendency, partly because of some of the factors I referred to in my previous answer, to gold-plate and overregulate, and it constantly has to be held in check. Perhaps one of the many benefits of this exercise is that it is departments that will have to make the responses, take the work forward under the supervision of the Brexit Opportunities Unit and consider the kind of points that my noble friend makes.

Finding the papers from the past is an interesting challenge. I am sure that most of those have now been publicly released. I read today that the papers of the Blair Government were being released by the National Archives, so I am sure that the briefs to my noble friend are available to all and sundry. Perhaps we should all go and have a look at them.

House adjourned at 5.33 pm.