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The government’s climbdown on the EU Retained Law Bill has come under intense criticism from many Brexit supporters this week.
The plan to ‘sunset’ all EU laws by the end of the year — meaning that they would expire if they had not been revised or retained — has been cancelled. Sunsetting was meant to give civil servants and ministers an impetus to identify which of the thousands of pieces of EU law built up over decades are still necessary.
There is much to be liked about sunsetting. It provides protection against the tyranny of the status quo: the opportunity to reanalyse costs and benefits of existing law. There is a decent case that all regulations should have an expiry date. American founding father Thomas Jefferson suggested that even written constitutions should expire every 19 years, to prevent previous generations from binding the future: | “The earth belongs always to the living generation… Every constitution, then, and every law, naturally expires at the end of 19. years. If it be enforced longer, it is an act of force and not of right.” | In practice, however, the government’s plans to sunset were backfiring. As I wrote in a letter to the Financial Times last week: |
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“In response [to sunsetting requirements], departments have lined up to demand most laws are exempted to avoid a regulatory cliff edge. They are busily drafting hundreds of statutory instruments to maintain the status quo. This timely process has paralysed civil servants.” |
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Some have said that analysing 4,000 or so laws should have been easy enough for the civil service. But this underestimates the required effort. It takes significant time and resources to understand and interpret each law, determine whether to maintain, abolish, or amend — and then consult, propose new rules, allow scrutiny and potentially new legislation. This is no overnight task.
But, due to the end-of-year deadline, none of this reform work was happening. Sunsetting (ironically, like much regulation) had a significant unintended consequence: locking in the status quo rather than enabling reform. Indeed, the original plan was to sunset by the end of 2026, not to try to do it all by the end of 2023. A longer period to undertake this mammoth task is sensible.
Nevertheless, there is an underlying failure and genuine frustration. Ministers and civil servants have failed for many years to identify Brexit opportunities and make the case for reform. The government’s ‘Smart regulation’ package from this week is a step in the right direction. It will create an innovation and growth objective for regulators, as suggested by the IEA’s former Head of Regulatory Affairs Victoria Hewson. There will also be some minor changes to working time directive paperwork, an issue discussed by the IEA’s Editorial and Research Fellow Professor Len Shackleton for many years.
But there is much more work to be done. IEA research has been at the forefront of identifying Brexit opportunities for many years – from championing free trade to GMOs, cultivated meat and net neutrality. It is essential that this important task continues to unshackle and unleash British businesses across all sectors. |
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Matthew Lesh
Director of Public Policy and Communications
Institute of Economic Affairs |
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IEA’s Shadow Monetary Policy Committee rejects rate rise
This week the Bank of England’s Monetary Policy Committee enacted a twelfth consecutive interest rates rise — 25 basis points to 4.5 per cent. But was it necessary? The IEA’s Shadow Monetary Policy Committee (SMPC) voted that the rate should have remained at 4.25 per cent — and two members voted for a rate cut. The SMPC believe that the Bank of England is over-focusing on current inflation and not enough on the sharp reduction in the money supply, which will bring inflation under control within the next two years, as shown by the Bank’s official forecasts. In July 2021, the SMPC were among the first groups to identify the risk of inflation and call for an interest rate rise. But they now believe the easing of supply chain pressures from China’s ending of the Covid lockdown and easing of the supply side shock from the war in Ukraine, combined with weakness in the UK economy, means further tightening to reduce demand is unnecessary. You can read the SMPC press release and download the meeting minutes.
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IEA Director of Public Policy and Communications Matthew Lesh highlighted the Bank’s culpability for high inflation in The Daily Express. |
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| Matthew also interviewed IEA Economics Fellow and SMPC member Julian Jessop about the rates rise and the state of the British economy on the IEA Podcast. |
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| | Law & Economics Fellow Cento Veljanovski, IEA Blog | In defence of antitrust... Efforts to weaken competition law in the name of sustainability risk worsening consumer outcomes while not helping the environment. |
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| | Communications Officer Reem Ibrahim, Jeremy Vine on 5 | The liberal take... Reem debated NHS reform and the monarchy. |
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| | Head of Cultural Affairs Marc Glendening, The Critic | Do as I say, not as I do... An MP expresses righteous fury at a police visit, while also demanding that police have more power against their opponents. |
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| | In Conversation with Dr David D. Friedman, IEA YouTube | The conservative way to anarchy... How could law and order function in a stateless society? Should the police be privatised? Should borders be open? |
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| | Communications Officer Harrison Griffiths,
The American Spectator | Not open or free… The relentless efforts to reduce immigration are undermining our fundamental civil liberties. |
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| | Head of Lifestyle Economics Christopher Snowdon,
The Critic | Culinary crusade… The movement against so-called ‘Ultra-Processed Food’ is populated by “Status-signalling food faddists… back-to-the-land reactionaries, anti-capitalist hipsters, people who suffer from chemophobia (fear of chemicals) and those who suffer from orthorexia (a “pathological fixation associated with consuming healthy food”).” |
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| | Christopher Snowdon discusses gambling regulation and the recent white paper with an industry expert. |
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Date: Monday, 22 May | Time: 6.00pm — 8.15pm | Location: 2 Lord North Street, SW1P 3LB
Was Friedrich Hayek’s The Road to Serfdom valid when it was written or did it express an exaggerated fear? Is there a threat to our fundamental political liberties today and, if so, from where precisely does it emanate?
Panellists: James Forder, IEA Academic and Research Director (Chair) Dr Mark Pennington, Professor of Political Economy and Public Policy at Kings College London. Inaya Folarin Iman, journalist, television presenter and Director of the Equiano Project. Dr Kristian Niemietz, IEA Head of Political Economy. Sherelle Jacobs, journalist and columnist at the Daily Telegraph.
If you would like to attend, please contact Daniel Freeman: [email protected]. |
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IEA Book Club |
 | Date: Wednesday, 17 May Time: 5.30pm — 7.30pm Location: 2 Lord North Street, SW1P 3LB
The IEA Book Club will host IEA Trade and International Competition Fellow Shanker Singham and Alden Abbott on their latest book, “Trade, Competition and Domestic Regulatory Policy”. The event will be chaired IEA Director General Mark Littlewood.
There are a limited number of spaces at this Book Club event for non-members, please apply by emailing: [email protected]. |
|  | Date: Wednesday, 7 June Time: 5.30pm — 7.30pm Location: 2 Lord North Street, SW1P 3LB
The IEA Book Club will host Director of the Institute for Fiscal Studies Paul Johnson on his latest book, 'Follow the Money: How Much Does Britain Cost'. This event will be chaired by Matthew Lesh. |
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