"As long as I gaze on, Waterloo sunset, I am in paradise…" The Kinks, 1967
Few will suggest the post-Brexit world is quite the paradise envisaged by the song. But there are opportunities following the United Kingdom's departure from the European Union and indeed the government created a Ministerial role to consider Brexit opportunities and government efficiency. A possible opportunity is the ongoing role of European law in the UK and a project is underway within government to review this. The project has significant implications for railway businesses as a lot of the law underpinning our railway operating model originated from Europe.
The Williams-Shapps Plan for Rail envisages bringing track and train closer together. Whilst there are ways of structuring the future railway so that it remains compliant with the existing legal framework, revisiting retained EU law may well be a way to make the job of creating Great British Railways (GBR) easier. With the legislation to create GBR being paused in 2022, could a review of retained EU law help the industry take steps towards achieving the future model?
When Brexit happened, to ensure no gaps in the law were created, existing European Union law applicable in the UK was automatically incorporated into our domestic law. This is known as "retained EU law". Under new government proposals progressing through Parliament, all of that retained EU law will expire and will be removed from our domestic law – also known as "sunsetting" – from the end of this year. This now risks creating the gaps the government had previously sought to avoid.
In many respects, the railway in Great Britain was an early pioneer of the operating model and legal framework later adopted throughout Europe. The principle of separation of track and train was adopted in the mid-1990s in GB. In Europe, a series of "railway packages" over the course of the past 30-odd years has increasingly sought to define what separation means in the real world. The intention being to have independent infrastructure managers incentivised to maximise use of their rail infrastructure without discrimination and promoting on-railway competition for passenger and freight users.
The proposals
The Retained EU Law (Revocation and Reform) Bill (the Bill) is currently at the committee stage in the House of Lords. If passed as currently drafted, the Bill will abolish the principle that EU law has supremacy over domestic law and will give powers to ministers to revoke, restate or update existing retained EU law. One of the more controversial proposals in the Bill that readers may have heard about is the "sunsetting" provision – perhaps not quite as visual as a Waterloo sunset. If passed, most retained EU law will automatically expire and no longer form part of our law from 31 December 2023 – less than a year. This is unless active steps are taken either to:
- preserve that retained EU law; or
- postpone the sunset until 23 June 2026.
Either of those options requires a specific statutory instrument to be passed by the relevant part of government – for the railway, the Department for Transport (DfT). The real difficulty with this approach is that if the DfT does nothing, retained EU law will automatically disappear. This potentially leaves big gaps underpinning how the railway is operated. Preserving the status quo in the absence of action would seem to be the better option, but is not the current plan.
Whilst there might be some cases where existing legislation – such as the Railways Act 1993 (the 1993 Act) – can plug the gap, in other areas there could simply be nothing. The government considers it "unlikely" that this will happen. That said, it remains a possibility. It also places significant powers in the hands of ministers, rather than giving them to Parliament.
What needs to be done
What really needs to be done is for the DfT to go through all retained EU law, clause by clause, and consider one of the following options:
- It should continue to be retained as is: this will be important where it underpins a key part of the industry which isn't otherwise replicated in domestic law – safety authorisations and certificates is an example of this.
- It should be retained with amendments: for example, this could include the power to directly award rail operations contracts, such as National Rail Contracts, in a broader range of situations. In Europe, the option to directly award rail operations contracts will considerably narrow later this year when the deadline to change European law passes on Christmas day.
- It should be allowed to lapse, which could include transitional arrangements: for example, the European/railway undertaking licensing regime which overlaps a Railways Act equivalent, although steps would need to be taken to ensure those entities holding "European" licences can convert those into domestic ones.
We strongly recommend that everyone in the industry undertakes their own review of the potential impacts of retained EU law lapsing at the end of 2023, so that they are ready to input to any requests for input from the DfT or otherwise lobby. Our view is that the starting point should be that EU retained law is retained beyond the end of 2023 unless a case is made to remove it. This will avoid that separate law of unintended consequences for rail businesses.
What unintended consequences might there be?
The potential consequences will vary between rail businesses: losing a wealth of law underpinning the industry is potentially very significant. Whilst by no means a comprehensive list, possible areas to consider include:
All of the above goes to show that there is plenty of thinking that needs to be done when it comes to retained EU law. Whilst we hope that it is the intention, a close review of existing retained EU law is needed to make sure there are no gaps in the industry framework which could create difficulties for railway businesses. Whilst we might enjoy a Waterloo sunset, it's unlikely we would enjoy a sunsetting of retained EU law without clarity on what fills the gap left behind.