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Committee launch Post-Brexit regulatory divergence inquiry

14 June 2022

The European Scrutiny Committee inquiry looks into the benefits and challenges to business and the UK economy of diverging from copied EU regulations when the UK left the block, and where the Government should rewrite or repeal these laws.

It’ll also examine the complexities of making changes to regulations in areas that had been controlled at EU-level in the context of overlapping commitments enshrined in the Withdrawal Agreement, new trade deals and the devolution settlements.

The Government has described regulatory reform as a “unique opportunity” to update the UK’s regulatory regime to make it more competitive. It is expected to publish a Brexit Freedoms Bill shortly, aiming to capitalise on the UK’s new regulatory autonomy.

Questioned by the Committee on his plans in April, Brexit Opportunities Minister Mr Rees-Mogg raised the prospect of deregulating in certain priority areas – including gene-editing in animals, data, and financial services. All of these areas will receive special attention as part of the inquiry.

Committee Chairman, Sir William Cash, said “Two and a half years on from leaving the EU, Brexit is an evolving project and important questions remain over how we’ll regulate the economy to benefit the UK. Commitments in the Withdrawal Agreement and the new UK/EU trade deal mean EU rules still impact our economy and it’s vital, in the UK’s rapidly changing regulatory environment, we understand how effective changes can be made and in what areas.

The regulatory regime that we decide on could determine our prospects decades into the future. It’s essential we get this right early and that’s why our inquiry will look into what strategies the Government should employ to decide what to change, how, and at what cost. Legislation announced in the Queen’s speech will be introduced soon – which we closely scrutinise.”

Terms of Reference

The Committee would like interested parties to submit written evidence answering any of the questions below on the Committee’s website before 22 July 2022.

  1. How was the UK’s regulatory autonomy constrained when it was an EU Member State?
  2. After Brexit, how can the UK now regulate differently?
  3. How is the Government regulating differently since EU exit and how could the process of doing so be most effectively taken?
  4. What restrictions are there on the UK’s regulatory autonomy as a result of commitments in the UK/EU Withdrawal Agreement and the UK/EU Trade and Cooperation Agreement?
    a. How might divergence in certain policy areas have practical consequences for the UK’s wider relationship with the EU?
  5. How might Common Frameworks – introduced by the Government to ensure a common UK approach is taken where powers have returned from the EU which intersect with policy areas of devolved competence – affect the Government’s ability to regulate differently after EU exit
  6. What wider obligations – flowing from new UK free trade agreements – might affect the Government’s ability to regulate differently after EU exit?
  7. In which sectors is the UK well placed to maximise the opportunities afforded by its newfound regulatory autonomy and, conversely, in which areas might diverging from the EU prove more challenging?
  8. Of the priority sectors highlighted by the Committee (agriculture, data and financial services), where and how should the UK diverge from EU rules?
    a. Are there any specific examples of retained EU law that should be kept or revoked and/or replaced?
    b. What are the likely costs and resource implications of divergence and how can these be effectively managed?
  9. Should the Government adopt a particular approach to regulating in areas previously governed by EU rules?
    a. Should priority be given to forms of governance like legislation or should other methods like self-regulation be pursued?

Further information

Image: CCO