Lords will delay Rishi Sunak’s bonfire of EU laws

Rishi Sunak has told the cabinet that interest rates are expected to increase to 2.5 per cent over the next year as he warned ministers against borrowing more to fund public spending.

Rishi Sunak will be forced by the House of Lords to abandon plans for a bonfire of European Union laws by the end of the year.

The government has committed itself to removing about 4,000 pieces of EU-derived laws from the British statute book by December. Ministers will have to decide which they want to retain, which to scrap and which to change.

However, the scale of the task means that it is increasingly seen in Whitehall as an impossible deadline, with internal estimates that thousands of officials will have to be diverted to review legislation full time.

A senior government source told media that it was “inevitable” that the government would have to abandon its plans when the legislation reaches the Lords, which is expected to be next month. Peers have raised significant concerns about them.

“I can’t see it [the deadline] surviving,” the source said. “We’ll have to compromise when it gets to the Lords. If the object is to review all these regulations properly rather than just cut and paste them into UK law then we’ll need more time. It’s an entirely arbitrary deadline. We’re going to have to make a concession to get it through.”

Three departments are expected to extend the deadline — the Department for Business, Energy and Industrial Strategy (BEIS), the Department for Transport and the Department for Environment, Food and Rural Affairs — until 2026. There have been claims that Grant Shapps, the business secretary, is sympathetic to a delay.

However, the move is likely to anger Eurosceptic Tory MPs, who believe that the legislation is critical in showing that the government is delivering on the benefits of Brexit. Jacob Rees-Mogg, a former business secretary, said: “There is no reason to give in to the unelected remainers in the House of Lords who have consistently wanted to thwart Brexit.

“Repealing EU law and replacing it with domestic law seven years after we voted to leave is not especially ambitious and departments ought to be ready to do it. It was not going to be hard for BEIS when I was there but there was a bit of whingeing from life’s eternal hand-wringers.”

Any delay would be particularly challenging for Sunak, who said during the leadership campaign during the summer that he would “review or repeal” EU laws in his first 100 days as prime minister.

However, there is likely to be strong opposition in the Lords, where one Liberal Democrat peer referred to the plans as a product of the “ideological right”.

Officials say that the task of reviewing the 4,000 EU-derived laws is onerous, with each regulation subject to 25 detailed questions and multiple sub-questions.

The plans are being opposed by business groups, trade unions and environmental groups. An alliance of more than a dozen organisations, including the Trades Union Congress, the Institute of Directors (IoD) and the Chartered Institute of Personnel and Development, said the proposed changes would cause difficulties for several sectors.

In a letter to Shapps the alliance said the plans would create further uncertainty for businesses. Roger Barker, the director of policy and governance at the IoD, said: “Getting to grips with any resulting regulatory changes will impose a major new burden on business which it could well do without.”

Concerns have been raised that the policy could be detrimental to workers’ rights and environmental protections. The letter says the proposal would overturn “decades of case law” and make the “interpretation of the law highly uncertain”. This could affect holiday pay, safe working hours and laws governing the labelling of meat and eggs.

Ministers are understood to be keen to apply the new clauses to: chemical regulations, which ministers claim impose high compliance costs on small businesses; rules on wine labelling, packaging and bottle sizes, including minimum alcohol requirements; and regulations governing high-powered vacuum cleaners and some planning regulations.

A BEIS spokesman said: “The programme to review, revoke and reform retained EU law is under way and there are no plans to change the sunset deadline for any government departments.”