The Retained EU Law Bill: what are the next steps?

The Retained EU Law (REUL) Bill will sunset (end) all EU-derived secondary legislation by the end of 2023 unless an active decision is taken by the government to retain or reform each affected regulation. There are around 4,000 pieces of retained EU law which govern every part of the economy, including employment rights, intellectual property, health and safety, and the environment. Each individual piece of legislation will need to be reviewed by the end of this year. It is that combination of the broad scope – but also the aggressive timetable – that is causing huge uncertainty for business.

The CBI has just completed its Q1 governance round and in doing so has discussed the impact of the REUL Bill with over 800 companies across every size, sector, and region within the UK economy. Below are the key themes that have emerged from that consultation:

1. The current process for reviewing Retained EU Law is adding to business uncertainty:  

• Awareness of the Bill and its impact is low. Whilst larger firms, particularly those with a global footprint, are aware of the Bill, most businesses, notably SMEs and mid-sized firms were either unaware of the Bill or had not reviewed its impact.  
• Those that had reviewed its impact had redeployed resource internally to support planning. One chemicals company had brought in a new employee specifically to focus on regulatory risk planning to combat the uncertainty.  
• Not knowing the regulations that companies would be required to follow in 12 months' time was universally seen as unhelpful for business confidence, particularly those with a cross-economy application around areas such as employment rights and environmental protections. 
• Uncertainty around how the consultation process will work, including what it expects from business, how business will be engaged, and timelines, is adding to the confusion.  

2. Avoiding ‘regulatory duplication’ is the overwhelming priority for any reforms to existing Retained EU Law:  

• There is recognition from firms that there are opportunities to reform existing Retained EU Law that could reduce the regulatory burden on British businesses. Focusing on streamlining existing regulations in areas such as TUPE would be beneficial.  
• A more prominent message, however, was concern about the government adopting more ‘UK versions’ of existing EU legislation.  
• Recent examples, such as the UKCA mark and UK REACH, have proved to be expensive and burdensome, with one member describing it as ‘double the cost for exactly the same outcome’. 

3. Firms operating with a pan-UK footprint stressed that divergent approaches across the devolved nations would lead to increased costs for business – and ultimately consumers:  

• The Bill gives Ministers and devolved authorities significant decision-making powers over regulations in areas of developed competency.  
• At the end of 2023, there could be a confusing mix of legislation which may apply in different ways in different parts of the UK.    
• If Westminster and devolved nations follow different regulatory paths – it will be hugely damaging for businesses operating across the UK. 
• We are already seeing this play out with the Deposit Return Scheme, which will go live this year in Scotland and will include glass. In England, it won’t go live until 2025 and will exclude it.   
• This is further exacerbated by the lack of a functioning executive in Northern Ireland.  

Recommendations: 

The government can help build business confidence in the process for reviewing Retained EU Law by:   

• Implementing a rolling timetable of reform, rather than a 12-month big-bang, to allow for the capacity to review all existing Retained EU Law effectively. Prioritising those areas for immediate retention – such as employment rights and environment protections – would send a positive signal to businesses that they can plan with confidence.   
• Providing more information about its intentions for the review process. How will it work? What are the timelines? 
• Establishing formalised engagement with business on the Retained EU Law Bill. The Business Brexit Taskforce, established previously within the Cabinet Office, offers a good template for how best to draw on industry insight – ensuring that the government has access to the best economic evidence for supporting this process.   
• Focusing the reform agenda on the sectors where the UK can lead and shape global regulatory frameworks with first mover advantage, such as robotics and AI – while avoiding becoming a global outlier.  
• Clarifying how it is managing the risk of divergence within the internal market.  

What is the CBI doing: 

1. Raising awareness amongst businesses: Hosting drop-in sessions for members etc 
2. Sharing insight with Government: Collating a list of regulations to be retained, reformed and revoked, from across the economy and for specific sectors (REUL Heatmap). This is fed into government fortnightly. To input into this process, please contact Ellie Goodchild.  
3. Engaging with policymakers: Continuing to have conversations with Ministers, officials, and key parliamentarians around the risks of the current legislative process, including highlighting an alternative process for delivering a rolling programme of reform.