08 June 2022

The UK in a changing Europe: Brexit opportunities: Rees-Mogg is going the wrong way about seizing them

The aim this time is to introduce ‘sunset clauses’ for up to 1,500 pieces of retained EU legislation as part of the forthcoming ‘Brexit Freedoms’ Bill...This would impose a five-year ‘expiry date’ on said rules, by which point ministers would have to decide whether to keep, amend or remove them.

Amid the fanfare of Jubilee week, the Times reported that Jacob Rees-Mogg, the Brexit opportunities Minister, is drawing up yet another plan for a bonfire of EU regulation.

 A ‘source’ told the Times the aim is to ‘force radical thinking’ within government, by identifying EU legislation with high compliance costs for business and asking what ‘is actually necessary’.

That source is right in a couple of respects: Brexit opportunities do exist where EU regulation is overly-convoluted, and where there is a case for something fundamentally different.

Consider two existing cases. The Treasury has accepted a loss of integration with the EU financial services market and has instead developed plans to make the City a globally competitive financial centre, with lighter-touch regulation across numerous policy areas, underpinned by the City of London’s existing stature and infrastructure.

And Defra is developing a new agricultural subsidy scheme in England, which fundamentally rewrites the principles of the EU’s CAP to reward farmers financially for sustainable practices rather than total land farmed. Many creases need ironing out, but those costs are better offset because there is a clear idea of how the policy supports long-term net-zero goals.

What these plans have in common is they are tightly-focused, based on a proper consideration of risks and rewards, and conceived to fit with long-term ambitions.

Unfortunately, Rees-Mogg’s latest proposal is the exact opposite of this – a scattergun approach that prioritises breadth and speed over precision and strategy. This brings several major problems.

In policy terms, it is a recipe for chaos. The implication is that officials will be incentivised to identify and unpick sub-optimal EU regulation at pace. The five-year deadline gives little time to think properly about whether rules can be adequately replaced by UK legislation, and how different changes join together.

It will also mean a raft of looming deadlines in five years’ time, as businesses rush to adapt to new regulatory requirements for everything from chemicals, to hoovers, to packaging. Experience from the new UKCA and UK REACH regimes – for manufactured goods and chemicals respectively – shows that adaptation is a slow and laborious process as regulators must help business get swathes of goods re-authorised for the new regimes.

There is a real risk of gaps emerging in the statute book if rules lapse before they are replaced. The inevitable uncertainty about forthcoming UK rule changes will also hurt businesses trying to plan ahead and likely deter international investment (which Brexit opportunities are meant to unlock).

It also has implications for the UK’s trade. The government says it wants to simplify life for business by amending EU rules with high compliance costs. But the reality is that even simplified UK rules would lead to UK exporters to the EU having to comply with two parallel sets of UK and EU regulations, rather than one common framework....

more at UKandEU

© The UK in a changing Europe