The House of Commons European Scrutiny Committee has announced the launch of a new inquiry looking into the benefits and challenges for business and the UK economy of diverging from copied EU regulations post-Brexit, and where the Government should rewrite or repeal these laws.

In announcing the inquiry, the Committee highlighted the fact that the Government has described regulatory reform as a “unique opportunity” to update the UK’s regulatory regime to make it more competitive. On this theme, the Prime Minister previously suggested (in January 2022) that a ‘Brexit Freedoms’ Bill would be brought forward, and following this, the Queen's Speech 2022 announced forthcoming legislation in this area. What this could look like, and the effective ‘ditching’ of EU financial regulations, is something that we have recently written about in the FT Adviser (available to read here).

The inquiry has invited interested parties to submit written evidence by 22 July 2022, and is seeking to gather views on the following nine questions:

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?
   • 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?
   • Are there any specific examples of retained EU law that should be kept or revoked and/or replaced?
   • 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?
   • Should priority be given to forms of governance like legislation or should other methods like self-regulation be pursued?

This is clearly an important development, and the outcome from this inquiry could help to inform and shape the Government’s approach going forward.