Rishi Sunak has admitted the deadline was unrealistic

Rishi Sunak has abandoned plans to scrap nearly 4,000 EU laws to the relief of businesses but amid a backlash from Brexit hardliners.

The government will no longer “sunset” all EU laws by the end of the year, Kemi Badenoch, the Business and Trade Secretary, announced.

About 550 laws will now be targeted in an admission that the December deadline was too ambitious and a growing acceptance that scrapping all EU legislation without proper scrutiny could see the loss of important protections for workers and the environment.

However, Brexit supporters saw the Retained EU Law Bill as a key plank in removing Brussels bureaucracy, one of the drivers of the campaign to leave the bloc.

Jacob Rees-Mogg, who spearheaded the so-called bonfire of EU red tape, criticised the Prime Minister for dumping a key pledge.

In a statement, the right wing European Research Group of MPs said: “We are very disappointed that the REUL Bill, which passed through the Commons with the overwhelming support of the parliamentary party, is being watered down. There is still time to avert this decision and we very much hope the government will reconsider.”

As an attempt to deflate the anger, Ms Badenoch said she would reform the controversial EU working time directive that would stop companies having to record the number of hours some staff work, which she claimed would save firms £1 billion.

There are also new measures to improve competitiveness, including a three month limit on so-called non-compete clauses that can prevent workers from taking jobs with rival companies.

However, there will be no scaling back of workers’ rights to holiday pay and maternity leave or other protection derived from EU legislation, a move that will also ease tensions with the opposition and trade unions.

Ms Badenoch insisted she wanted to “remove any unnecessary regulations we inherited from Brussels”. However, she said that it had become clear during the process of identifying which UK laws derived from the EU that there was a risk that important legislation could be scrapped inadvertently.

“With the growing volume of EU law being identified, and the risks of legal uncertainty posed by sunsetting instruments made under EU law, it has become clear that the programme was becoming more about reducing legal risk by preserving EU laws than prioritising meaningful reform,” she told MPs.

She added: “Getting rid of EU law in the UK should be about more than a deadline. It should be about making sure our laws work for the people who use them.”

Writing in The Daily Telegraph she said: “We will not abolish any law for the sake of it. The laws we will retain are essential to the effective functioning of business and industry.

“We will not reduce workers’ rights and protections, nor will we repeal maternity rights, or threaten the high environmental standards currently in place, and we will ensure that we do not revoke legislation required to uphold our international obligations.”

The Financial Services and Markets Bill and the Procurement Bill will repeal or reform a further 500 pieces of retained EU law.

The British Chambers of Commerce expressed relief at the climbdown. It said that firms had been worried about the “headlong rush” towards the sudden removal of vast swathes of legislation.

Jane Gratton, a senior policy official, added: “It is welcome that the government has listened, and the bill will no longer apply a blanket sunset clause in this way, with the real risk of unintended but negative consequences”.

Labour’s Cabinet Office minister Jenny Chapman described it as a “humiliating U-turn from a weak and divided government”.

Institute of Economic Affairs Director of Communications and Public Policy Matthew Lesh, said: “The sunsetting of EU law by the end of the year has backfired for regulatory reform advocates. It led to busy work just to maintain the status quo and created substantial uncertainty.”

Commenting on the changes to the working time directive and simplification of employment regulation for business transfers, the institute’s labour market expert Professor Len Shackleton, said: “It is good to see the government taking some action to roll back employment regulation, which has increased dramatically in the last thirteen years despite occasional rhetorical criticism.

“Some of this was down to EU meddling, but more was down to domestic policies and it is good to see some reversal, however limited.

“Most economists agree that the cost of employment regulation does not ultimately fall on profits, but is passed on to consumers through higher prices and to workers in terms of lower pay than might otherwise be the case. 

“So, it follows that the estimated savings of £1 billion from regulatory reform will ultimately benefit a wider constituency than business owners. More of the same please.”

Errol Taylor, CEO at the Royal Society for the Prevention of Accidents, said: “Since its inception, the REUL Bill has been shrouded in confusion and mystery, and has left business owners and the public in limbo.

“We therefore welcome the Government’s announcement that it intends to make it clear which laws it intends to remove from the statue book.

“We intend to scrutinise the Government’s amendment carefully to ensure that no lifesaving legislation is repealed, and that any future changes are made only when due consultation and a proper parliamentary process has taken place.”