Future of Retail — The CFO Issue

issue 04

Another complicating factor is devolution in the UK. Some areas of EU regulation, such as food standards, are already the responsibility of devolved administrations.

in general terms it will repeal the European Communities Act 1972 on the one hand, and transfer into UK law a snapshot of the substantive rules and regulations of the EU on the other.


is also anticipated that numerous additional Bills will be required before the date on which the UK leaves the EU to give effect to its departure (aside from any “deal” done with the EU). Unfortunately, transferring this law is not

likely to be just a case of searching for “EU” and replacing it with “UK”. Some EU laws, in their current form, will simply not work in the UK on this basis when we leave. They are what the civil servants call “inoperable”. Take for example REACH, the main piece of EU legislation governing the production, marketing, sale and use of chemicals. REACH requires all chemicals to be registered, assessed and approved by the European Chemicals Agency before they can be placed on the market. But what relationship shall we have with the European Chemicals Agency after Brexit? If the answer is none, then the UK’s REACH legislation is meaningless, inoperable. In many cases dealing with inoperability

will involve a choice for the government between negotiating continued access to the relevant existing EU regulatory framework (for example the European Chemicals Agency in the case of REACH) or breaking entirely with the EU and replicating the EU’s regulatory functions through new bodies in the UK (for example by creating a UK Chemicals Agency). Currently, the European Chemicals Agency is made up of no fewer than 560 staff from a

variety of technical backgrounds. The choice for the government is not easy or particularly attractive — either stick with EU systems that many people thought they had voted to leave (although query to the extent anyone’s vote was infl uenced by a violent rejection of the UK’s membership of the European Chemicals Agency) or spend the next two years setting up national replicas of those systems. Another complicating factor is devolution in

the UK. Some areas of EU regulation, such as food standards, are already the responsibility of devolved administrations. Currently, differences in approach to regulating food standards throughout the UK, indeed throughout the whole EU, are constrained by the fact that all authorities must regulate in conformity with EU rules. Through this, retailers with operations throughout the UK enjoy at least a degree of regulatory consistency. The risk is that outside the constraint of EU rules, regulation which is devolved will take divergent paths in different UK jurisdictions after Brexit as the various administrations each plough their own furrow. Some may even wish to make a point of doing so, notwithstanding its objective undesirability. The government is ostensibly presenting

the Great Repeal process as purely a technical exercise, but that disguises the fact that some fundamental choices will be made about how business operations will be regulated in the future and who regulates them.

views on these issues, now is the time to be making them known to the government. It is all ears. It needs to be.

If retailers have

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