On 15 November 2022, I condemned the Department for Business, Energy and Industrial Strategy (BEIS) for failing to produce an impact assessment on the Retained EU Law Bill. One week later, BEIS published its impact assessment (IA). Its IA document looks like a blank form with notes for someone else to fill in the blanks. No actual figures are provided for changes or deletions of any affected laws. So it is no surprise that the Regulatory Policy Committee (RPC), an advisory Non-Departmental Public Body of BEIS, has described the IA as “not fit for purpose”.
The RPC says that “The Department has not sufficiently considered, or sought to quantify, the full impacts of the Bill. In addition, the IA does not include a consideration of the impact on small and micro businesses (SMBs) consistent with Better Regulation.”. The RPC says that each piece of sunset legislation could have a significant impact on many businesses. BEIS does not provide or promise to provide any impact assessments on changed or sunset REUL as decisions are made. Net costs to businesses cannot be calculated or understood without them.
RPC rates the rationale and options for the Bill as weak. BEIS has failed to make the case for regulatory intervention by sunsetting REUL or explain why it is necessary.
RPC rates the cost-benefit analysis in the IA as very weak. On this point, the RPC says “The Department has not undertaken any substantive analysis to support the Bill. In addition, the IA is missing any reference to analysis undertaken for REUL previously amended or removed. The IA does include some discussion of the risks and uncertainty of the Bill, but this discussion is limited.”.
The IA fails to consider the wider impacts on other stakeholders. RPC rates monitoring and evaluation as very weak, saying “The Department does not commit to a post-implementation review of the impacts of the Bill. The IA needs to consider what monitoring and evaluation (M&E) could be put in place to assess the impact of the measures that will be retained, amended or sunset.”.
The first page of the IA has the words “RPC Opinion: Red Rated” in big bold letters. The RPC rating for the IA is “not fit for purpose”. The RPC Equivalent annual net direct cost to business (EANDCB) and Small and micro business assessment (SaMBA) categories are red-rated. BEIS has done little to rectify these red-rateable concerns.
The IA describes the Bill as a facilitator of change and enable departments “to update, restate, repeal, revoke or replace REUL with a view to ensuring that regulations are tailor made for the UK to deliver maximum benefit to citizens and business”. And how will departments judge what changes will deliver maximum benefit without an IA of options for change? There is no list of candidate REUL for retention, amendment or sunset. Departments will have full discretion to make any changes they like but there is nothing to guide them to determine what changes to make. An IA will be needed for every single piece of legislation that will be changed or deleted. As departments have a deadline of the end of this year to evaluate the effects unless they extend the deadline, rushed changes are bound to produce poorly drafted laws with little consideration of their impact on stakeholders.
The IA document states “Since departments have mostly not yet taken decisions regarding how they will use the powers in the Bill to reform REUL it is not at this stage feasible to quantify and monetise the associated economic costs.”. In the box headed “Description and scale of key monetised benefits by ‘main affected groups’”, the IA document states “Similarly to costs, it is not at this point feasible to quantify and monetise the economic benefits of much of this Bill.”. That’s a cop-out. This is what we expect to find in an IA.
The REUL Bill has been sold by its supporters as a benefit of Brexit and is erroneously based on the assumption that all regulations are bad. The Bill’s supporters tell us that deregulation will boost the UK economy and get rid of unnecessary burdens on businesses and consumers. Yet they cannot tell us what these unnecessary burdens are or what benefits this Bill provides. The document claims that consumers and businesses “will benefit from faster regulatory reform aimed at reducing existing burdens and boosting economic growth” but cannot explain how and provides no evidence for this claim.
The IA failed to produce any lists of candidate REUL for change or deletion and failed to provide a reasonable number of different scenarios for changing and deleting REUL. BEIS did not even bother trying. Given the vast potential impact of the Bill, this is really disappointing. The IA describes this vast potential impact:
“The task of assessing impacts is made more difficult because of the broad nature of the Bill. It is not just the amount of REUL, currently over 2,400 pieces, but also how wide the impact that REUL has. REUL legislation is spread out over 16 different departments and approximately 300 policy areas. It thus has the potential to impact a vast array of industries and groups. To fully assess the possible impacts on all these groups of all possible changes would be mere guesswork at this stage.”
“EU law provided the basis for the regulation of many issues such as vehicle standards, transport emissions, health and safety, aviation, environmental and product safety standards, intellectual property, private pensions, food and feed imports, gas and electricity markets, social security coordination, rail interoperability, road transport, climate change, food hygiene, rail safety, aircraft operators, access to benefits, seafarer health and safety, telecoms, animal feed, employment rights, food additives, auctions, carbon capture and storage, contaminants in food and corporate reporting.”
All this is now at risk. Remember, all REUL will be deleted by default at the end of this year if nothing is done to save it. It is shocking that BEIS has made no attempt to assess the potential impact of the deletion of any REUL.
In short, there are no financial figures, no described benefits or effects on stakeholders from any changes or deletions of any REUL in the BEIS IA. The document acknowledges that future IAs need to provide this information for specific changes to REUL because this document makes no attempt to do so.