News focus: Brexit Freedoms Bill - freedom from what?

Despite all the political and media coverage the Brexit Freedoms Bill has generated, at the time of writing it does not exist. A British parliamentary draftsman’s schedules and clauses are unavailable – there is just a government press release.

In place of a draft bill is a game of charades in which we have to deduce its likely content and intended effect from government gestures.

Attorney general Suella Braverman says: ‘Setting up a mechanism to deal with these legacy EU rules is essential… It means we can move away from outdated EU laws that were the result of unsatisfactory compromises within the EU, some of which the UK voted and lobbied against – but had to adopt without question.’

And like a commemorative coin, the bill will ‘mark the two-year anniversary of Getting Brexit Done [sic]’. Businesses will save £1bn in ‘red tape’ costs, the government claims.  

Pressed for examples of such laws, government ministers have remained tight-lipped. But attention has focused on the bill’s declared intention of allowing secondary legislation to be used to amend laws that would normally require primary legislation to be changed.

‘Powers to amend by secondary legislation are not novel,’ says Charles Brasted, partner in Hogan Lovells’ global regulatory practice. ‘But inevitably [they] raise concerns about the level of scrutiny they receive – and the impact that can have on the effectiveness, and potential unintended consequences, of these sorts of changes.’ Getting the right balance ‘between legislative efficiency and scrutiny, both parliamentary and judicial, is important – and difficult’.  

It is notable, Brasted says, that the government ‘has highlighted the disproportionality of requiring primary legislation for “minor or technical” amendments, but goes on to say that it is looking for “a more sustainable way to deliver the UK’s regulatory, economic and environmental priorities”.’  The latter, he adds, ‘suggests significantly more wide-ranging powers than the former’.

Shantha David, head of legal services at Unison, says: ‘The plans for a “fast-track” procedure to remove retained EU law is worrying.’

The fear, for David’s members, is that the ‘red tape’ referenced by the government could include employee rights. ‘We were assured that Brexit would not mean a watering down of EU rights,’ she says. ‘Such a removal will result in the removal of hard-won rights in the appeal courts under the Working Time Directive, TUPE and Equal Pay for ordinary working people, and limiting access to justice.’

'The move towards a greater role for regulators, coupled with increased powers of policy direction by central government, raises questions about the balance between nimbleness, predictability and transparency'

Charles Brasted, Hogan Lovells

There are also fears that the Brexit Freedoms Bill is intended to operate in concert with other government reforms. David notes: ‘The government is consulting on the means of reducing the ability of the courts to challenge secondary legislation that is contrary to convention rights… and indeed limit the ability to challenge by means of judicial review.’

But perhaps the ‘beef’ of the government’s post-Brexit agenda is to be found elsewhere. While much has been made of the argument that the City needs ‘equivalence’ with EU rules on financial regulation to thrive outside the EU, some lawyers question this.

Speaking on a webcast, Shearman & Sterling partner Barney Reynolds told the Centre for the Study of Financial Innovation’s audience: ‘It is possible to come up with our own rules.’ It was wrong, he argued, to think of the EU and UK as two ‘codified’ systems in conflict. Instead, their market interactions were more ‘subtle’, allowing for differences. The UK could design a system of financial regulation with ‘high standards, but fewer rules’, he added.

On this, Brasted identifies a process around which the rhetoric, and politics, is much less shrill. ‘A considered review of regulations is welcome and there are no doubt opportunities for improvement,’ he says. ‘But there is no reason to assume that that opportunity is limited to regulation derived from EU law.’  

This is already happening, Brasted points out: ‘For example, the Future Regulatory Framework being developed. The move towards a greater role for regulators, coupled with increased powers of policy direction by central government, raises important questions about the balance between nimbleness, predictability and transparency.’

A key talking point is consumer rights. Principles-based regulation, which Reynolds supports, can conflict with the EU’s closer focus on consumer rights protected by ‘outcomes-focused’ regulation. The latter drives an approach closely focused on compliance with specific rules – for which read ‘red tape’.  

In our common law system, it is not always straightforward to identify, wholesale, retained EU law. Where EU law and courts provided persuasive, useful reasoning in an area where UK precedents do not help, judges may have used it, even though they did not have to.

On the status of retained EU law and directly effective EU rights, Brasted concludes: ‘This is an area for legitimate consideration but care will be required given the need for legal certainty and protection of existing rights.’