What does the new government mean for solicitors and the law?

Rishi Sunak entered No 10 last week with a promise to fix the mistakes made by Liz Truss during her short tenure as PM, after her radical “mini budget” rocked financial markets and increased UK borrowing costs due to a drop in the value of the pound.

Her government was swiftly brought down, sparking a second Conservative Party leadership race in just two months.

What were the main policy pledges during the leadership election?

Sunak ran against Truss during this summer’s leadership contest, losing by 42.6% of the vote to Truss’s 57.4%, although he had received the most MP votes – perhaps a sign of the trouble to come for Truss.

During the campaign, Sunak had pledged “radical” change by cutting the basic rate of income tax by 20% by the end of the next parliament.

Downing Street has said this is still a priority for the new PM but that it could not speculate into the future on its viability and that this would need to be discussed with new chancellor, Jeremy Hunt.

He also pledged to cut VAT on energy bills and reverse the ban on fracking, although this latter pledge has now been abandoned following significant backlash from both Tory MPs and opposition parties when Truss attempted to lift the ban.

The new Cabinet

The reshuffle has seen the exodus of prominent figures including Jacob Rees-Mogg and Brandon Lewis, and the return of Sunak allies including Dominic Raab and Grant Shapps.

However, Sunak’s reshuffle was mainly seen as one of continuity, with the reappointment of existing ministers appointed by Truss, the return of previous ministers who had worked under Boris Johnson, and figures from across the party spectrum in an attempt to reunite the party and calm the markets.

Key ministers to know:

• Jeremy Hunt – chancellor of the exchequer
• Dominic Raab – lord chancellor and secretary of state for justice, and deputy PM
• Grant Shapps – business secretary
• Victoria Prentis – attorney general
• Suella Braverman – home secretary
• James Cleverly – foreign secretary
• David Davies – Welsh secretary
• Kemi Badenoch – international trade secretary
• Lord Bellamy KC – justice minister in the House of Lords. He led the Bellamy review into criminal legal aid
• Edward Argar, Damian Hinds and Mike Freer – justice ministers

What does it mean for solicitors?

Sunak’s arrival may well have implications for the solicitor profession, with several changes in policy direction from his predecessor:

• Bill of Rights
• autumn statement
• Northern Ireland Protocol
• retained EU law
• criminal legal aid

Bill of Rights

Truss had put the Bill of Rights, the flagship policy of lord chancellor Dominic Raab, on pause as one of her first acts due to drafting concerns and expected resistance from parliamentarians.

It aims to give legal supremacy to the UK Supreme Court and make it explicit that UK courts can disregard rulings from the European Court of Human Rights (ECHR).

The bill was introduced in June to replace the 1998 Human Rights Act. It would place new restrictions on how human rights can be used in claims against the government.

Now that Raab has returned to the role of lord chancellor, the bill, which remains before Parliament, may well be resurrected.

Read our guide to the Bill of Rights

Autumn statement

Sunak has planned an autumn statement for 17 November, delaying the planned fiscal statement which had been due to occur this week on 31 October.

Truss’s infamous “mini budget”, which brought down her first chancellor Kwasi Kwarteng, had already seen many of its measures reversed.

Speculation suggests that Sunak and Hunt are now looking at ‘stealth’ tax increases by freezing income tax thresholds, as well as real terms public spending cuts by capping public sector pay at 2%, well below the inflation rate, which is currently at over 10%.

As chancellor, Sunak had already introduced a number of tax rises and many of those are still in the works, minus the 1.25% cut in national insurance.

Sunak’s corporation tax rise looks set to be in place for next year, so businesses with profits over £250,000 will see an increase to 25%.

Truss’s Energy Bill Relief Scheme will continue as planned until 31 March 2023, but it is currently unclear what support there will be for consumers and businesses after that.

Northern Ireland Protocol

During his campaign, Sunak committed to securing the passage of the Northern Ireland Protocol Bill.

It grants the government powers to unilaterally rewrite large parts of the protocol agreed with the EU following Brexit.

The bill is going through its committee stage in the House of Lords and facing resistance to the ministerial powers granted by the legislation, as well as concerns over its legality in international law and the implications it will have for the UK’s ongoing negotiations with the EU.

The introduction of the bill saw the EU resume paused infringement proceedings against the UK – and start new ones – for its failure to implement the protocol.

A further deterioration in UK-EU relations could lead to suspension of elements of the Trade and Corporation Agreement (TCA) and even the beginnings of a trade war.

This would be detrimental to the profession, which is still awaiting full implementation of the legal chapter of the TCA across EU member states and would benefit from closer trade co-operation with the EU.

Retained EU law

In September, the government introduced its Retained EU Law (Revocation and Reform) Bill that aims to deliver the “benefits of Brexit”.

The bill aims to see all retained EU law repealed, reformed or replaced by the end of 2023, but contains provisions for some areas to be given until 2026 for consideration.

This timeline is potentially a recipe for bad law-making and could yield a period of uncertainty over the status of regulations – leaving major gaps in law on important issues, from employment to transport, health and social care to the environment.

However, it has been reported that Sunak is considering deprioritising the bill due to the amount of staff it would take to review the approximately 300 pieces of legislation affected, with suggestions that he will extend the sunset clause to 2026 to give officials more time.

Criminal legal aid

Following Dominic Raab’s reappointment as lord chancellor, there are fears that any progress on criminal legal aid fees will likely stall.

Raab’s predecessor, Brandon Lewis, had last month reassured MPs that solicitors would benefit from the government’s revised criminal legal aid offer and further plans would be set out as part of the government’s response to the Independent Review of Criminal Legal Aid, still expected by the end of November.

Whether Raab will uphold Lewis’s assurances is unclear.

During his previous tenure, he refused to meet with the criminal bar whilst they were on strike, and – as a Sunak ally – may well offer criminal legal aid up as an area in which to make savings as part of the upcoming autumn statement.

We are firmly pushing for solicitors to receive the full 15% recommended by the review and has taken this up urgently with minsters.