Sunset Clauses in the Retained EU Law (Revocation and Reform) Bill – UK Constitutional Law Association

There are many points of note for those interested in Constitutional law in the recently published Retained EU Law (Revocation and Reform) Bill 2022 (“the Bill”).  This post focuses on the proposal to bind the Government to accomplishing the complex process of assimilating desirable retained EU law into domestic legislation before a stated deadline using the sunsetting provisions in clauses 1 and 3 of the Bill.  It asks why sunsetting is needed, suggesting the motivation lies, at least in part, in the Government’s desire to reap the so-called “Brexit dividend” by reducing the burden of regulation from EU-derived measures as quickly as possible.  It goes on to question whether the sunset clauses will ultimately assist in that aim.

A Gargantuan Task

Sifting through retained EU law and deciding what worthwhile parts should be assimilated into domestic legislation in the UK post Brexit is a gargantuan task.  The version of the Cabinet Office’s Retained EU Law Dashboard (“the Dashboard”) current at the time the Bill was published reported 2,417 pieces of legislation to consider.  For context, www.legislation.gov.uk records that 35 Public General Acts and 1,467 Statutory Instruments were made in 2021.  It is important to remember that the UK was a Member State with a seat at the table at the various EU institutions when the supervening measures were introduced.  No doubt the Government of the day supported action in at least some areas, and it would be foolish to assume that all retained EU law is egregious.  Indeed, of the measures already considered, the Dashboard reports that whilst 196 have been repealed, 182 have been amended and 33 have been replaced. The painstaking task of comprehensively identifying EU-derived measures, evaluating their worth and making recommendations as to their future place in domestic law should not be under-estimated.  Akin to a post-implementation review of legislation, the process to be followed should be familiar to many civil servants and the Government’s “Magenta Book” contains some sound advice.  Reading its suggestions to ensure useful, credible, robust and proportionate evaluations that advance the aims of learning and accountability, one is struck by the time and resources needed to consider each intervention even in the normal course of the policymaking cycle. 

Given the magnitude of performing such an exercise for the entire corpus of retained EU law, it is difficult to comprehend how a suitably thorough evaluation can be undertaken and acted on for all measures before the sunset date of 31 December 2023, even with the short-cuts that are being proposed in the Bill to curtail the traditional legislative processes and their associated opportunities for debate and scrutiny by democratically elected representatives.  They include the modifications to the European Union (Withdrawal) Act 2018 that would be effected by clauses 10 and 11 of the Bill, the broad framework powers to revoke or replace certain types of retained EU law to be bestowed by clause 15 and the increased possibility of using Legislative Reform Orders (“LROs”) to be introduced by clause 17.  Without the sunset clauses, the imperative for these measures is diminished.  For that reason alone, the case for sunsetting must be fully made out.  But there are other factors that make a robust rationale for its inclusion vital, such as the risk of creating loopholes by inadvertently repealing necessary measures and the risk of impeding legal certainty by implementing a morass of restatements, revocations and reforms pushed through in haste for the sake of culling retained EU law by an arbitrary deadline. 

Motivated by Burden Reduction?

So, why risk not giving the process as much time as it needs or deserves?  The answer would seem to be connected to the Government’s determination to harvest the “benefits” from Brexit as quickly as possible.  As well as “taking back control”, the motivation appears linked to a desire for decisive action to demonstrably cut the burden on businesses from EU-derived regulation.  Burden reduction as an incentive is suggested in the Queen’s speech announcing what was then called the Brexit Freedoms Bill, which stated that the Government would “continue to seize the opportunities of the United Kingdom’s departure from the European Union to support economic growth”.  The Explanatory Notes attached to the Bill echo this, reporting that the sunset clauses will “benefit businesses and consumers sooner”. 

There are further hints that a policy of burden reduction is associated with the Bill.  Some of the legislative mechanisms in the Bill are predicated on burden reduction.  The powers to revoke or replace “secondary retained EU law” in clause 15 only apply so long as the overall effect of the changes does not increase the regulatory burden, which is defined as including financial cost, administrative inconvenience, obstacles to trade or innovation, obstacles to efficiency, productivity or profitability, or sanctions that affect the carrying on of any lawful activity, wording which tracks the equivalent definition in Section 1 of the Legislative and Regulatory Reform Act 2006 as the trigger for an LRO.  In addition, clause 17 widens the scope of LROs to allow their use to remove or reduce burden from “retained direct EU legislation”.

Ironically, clause 18 of the Bill also proposes the revocation of the Business Impact Target (“BIT”), a legislative target that has formed part of the Government’s burden reduction initiatives since 2016 and which followed on from a system of regulatory off-setting or One IN, X OUT that had been in effect since 2011. However, it seems that repeal of the BIT does not mark the end of the pursuit of measured burden reduction.  The Bill does not give any indication of what mechanisms with what metrics will replace the BIT, but the accompanying press release notes that the detail of the BIT’s replacement will emerge in due course.  This links to the stated objective for the Bill in the Explanatory Notes that it will give effect to the commitments in the “Benefits of Brexit” report, which included a Government target to “cut £1bn of business costs from retained EU red tape” and a commitment to reform the impact assessment process and develop new metrics to assess the impact of measures more holistically.

Lessons from Previous Burden Reduction Initiatives

If a desire for burden reduction is behind the sunset clauses, earlier initiatives to cut burden by making use of sunsetting provisions may be informative.  In March 2011, the Government announced that any secondary legislation that introduced a burden on business should include a sunset clause, the rationale, as stated in the 2015 version of the Better Regulation Framework Manual, being that: “In cases where a measure is no longer needed, or where it imposes disproportionate burdens on business, the inclusion of such clauses helps ensure that it is removed. In other cases, they can help keep effective measures up to date, and support improvements.”  When the system was later put on a legislative footing via Section 28 of the Small Business, Enterprise and Employment Act 2015, all secondary legislation that “regulates business” was required to include a review clause (unless the Government makes a statement that one is not appropriate), and, as the 2020 version of the Better Regulation Framework: Interim Guidance document states, the sunsetting provisions were retained as an optional administrative measure only.  However, the Government’s own “Sunsetting Regulations: Guidance”, applicable when sunsetting was mandatory, is worth revisiting, particularly the advice around timing.  That advice was to publish the results of the review no later than 5 years after the regulation came into force, though in complex areas an earlier review process was advised.  The sunset provision was then advised to be set 2 years after the date for publication of the results of the review, the rationale being not only to allow sufficient time for new regulations to be made, but importantly also to allow those affected by the regulation an adequate period to plan for and implement changes required for compliance purposes.

Lord Frost announced the review of retained EU law in September 2021, and the Dashboard, which is a dynamic document updated on a quarterly basis, was first published in June 2022.  Given a previously suggested period of 2 years from publication of final review to sunset, a sunset date of 31 December 2023 seems to create unrealistic pressure.  But it is the second point that is particularly worth bearing in mind.  If the sunset clauses in the Bill are linked to a desire to reduce burden, the Government needs to recall that, at least on the previously applicable metrics, burden can be adversely affected by uncertainty over what measures are relevant to a business, by complexity and lack of clarity as to the meaning of the applicable measures, by the need for familiarisation with a new regime and by the necessity of adapting a business’s compliance processes.  All these consume time and resources when a single piece of applicable legislation is amended or replaced; the potential burden from a deluge of amended or restated legislative requirements as the deadline for assimilation caused by sunsetting approaches may be significant and scupper the Government’s original rationale for its inclusion. 

Conclusion

The sunset clauses will allow for politically attractive soundbites that may seem appealing to a Government keen to foster growth, but they may not achieve all the ends they seem intended to meet.  Instead, they introduce extra risk into what is already a complex process, risk that is not entirely mitigated by the possibility of extending the sunset deadline for certain measures under clause 2.  Indeed, the extension provisions perhaps underscore the concerns identified above.  The fact that the Government already perceives the need for some wriggle room may indicate awareness of the tightness of the timescales being imposed, and yet for an extension to be applicable, specific instruments or descriptions of legislation must be identified, leaving the unknown unknowns subject to revocation by the original deadline.  In the “Benefits of Brexit” report, the Government promised guidance to departments on the use of sunset clauses in regulations.  The guidance is to include not only when they should be used but also “the kinds of regulation for which sunset clauses … are unlikely to be appropriate”.  The sunset clauses in the Bill would seem to fall into the latter category.

Thank you to Professor Alison Young and Professor Mike Gordon for their helpful comments on an earlier draft.

Kate Ollerenshaw is a Graduate Teaching Assistant and PhD candidate at the University of Cambridge and a Bye-fellow of Jesus College, Cambridge.

(Suggested citation: K. Ollerenshaw, ‘More Haste, Less Speed: Sunset Clauses in the Retained EU Law (Revocation and Reform) Bill’, U.K. Const. L. Blog (10th October 2022) (available at https://ukconstitutionallaw.org/))