Tale of Two Cities - Part XII

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24 July 2017

by Brexit task force - Cambre Associates/Newington

The view from London

A complex double down on hard Brexit

The laying of the Great Repeal Bill or to call it by its proper title, the European Union (Withdrawal) Bill, before the House of Commons on 13 July caused another wave of headlines across the UK and beyond. However, there is still relatively little understanding of what the 66-page Bill will do.

There is much chatter about the ‘so-called Henry VIII powers’ but it is hard to grasp the scale of what is being put forward by the Government by only looking at a portion of the Bill. The Bill repeals the 1972 European Communities Act, which means that on Brexit Day (the date, no later than 31 March 2019 that the UK formally leaves the EU), EU law will no longer take precedence over laws passed in the UK Parliament and the Court of Justice of the EU (CJEU) will no longer have jurisdiction.

To qualify what that means, besides the EU Treaties, about 12,000 EU regulations have been incorporated directly into the UK’s domestic law by the European Communities Act, as well as 7,900 statutory instruments in force in the UK, which transpose the EU’s into domestic law. More than 700 new EU laws have been introduced into the UK since the Brexit referendum and another 1,260 will have become applicable in the UK by when Britain leaves.

Henry VIII disunites the Kingdom

The Great Repeal Bill proposes to essentially transfer all EU law onto the UK’s statute book in one wholesale move – with the notable exception of the EU Charter of Fundamental Rights. While this is being done, the Government will have delegated powers to start ‘correcting’ EU law because some of it cannot simply be copy-pasted, such as where a regulation gives recourse to the CJEU. Under the Bill, the Government will have this power to amend and adapt EU laws for up to two years after Brexit, and it is this ‘Henry VIII’ power that is causing so much concern. 

This concern about the lack of parliamentary scrutiny has been amplified by the proposal within the Bill for delegated powers to be used in giving effect to the outcome of Brexit negotiations, and confusion as to whether the powers will be used through a negative or affirmative procedure. A negative procedure will see the Government’s proposal to correct EU law become domestic law without debate unless there is an objection from either House of Parliament. An affirmative procedure, in contrast, requires approval from both the Lords and Commons. A subtle but important difference due to the amount of time Parliament will have to review legislation. The Lords Select Committee on the Constitution says a special procedure should be put in place for scrutinising more controversial statutory instruments in order to reassure Parliament.

The Government estimates that between 800 and 1,000 statutory instruments will be required, and says ‘it is not a power to change laws merely because the Government did not like them before Brexit’. Opposition parties publically argue that the Bill places far too much power in the hands of ministers outside of proper parliamentary oversight.

Meanwhile, the nationalists in Westminster and the devolved administrations in Scotland and Wales have also said that the Government is on a ‘naked power grab’ as the Great Repeal Bill covers territory that is considered a devolved competency, such as agriculture. The argument put forward by ministers that it will be necessary to take EU law under a common UK umbrella to provide certainty to businesses before consulting on whether there are areas which can be devolved is not cutting any mustard.

Little time and the other Bill

What does this all mean for the timing of a Bill that the Government wants passed before Brexit Day in order to make sure there is no ‘black hole’ in UK law when London waves good bye to Brussels? A massive headache, which, as the House of Commons Library points out is ‘further complicated’ by the overlap with the withdrawal negotiations, which ‘could very much narrow the parliamentary window available to the Government to pass many of these instruments.’

As we look ahead to Parliament’s return after summer recess, a rebellion by some of Prime Minister Theresa May’s backbenchers, who have remained publically quiet so far on the Great Repeal Bill, is a possibility.

This leads to another Bill that could have far reaching consequences – the EU (Referendum on the Withdrawal Agreement) Bill which was laid before the House of Lords the day before the Great Repeal Bill. Seen as a largely futile attempt by Baroness Ludford, the leader of the Liberal Democrats in the Lords, to keep the debate on Brexit going, could it be that Theresa May would consider giving the Government’s backing to the ‘Second Referendum Bill’ if a rebellion ensued and on the proviso that she gets the numbers to push the Great Repeal Bill through?

The likelihood of this is exceptionally slim, but if the last few months have taught us anything it is that you can never say never in politics.

The view from Brussels

Good omens and bad deeds

A month ago the UK marked the first day of Brexit talks by agreeing to the EU’s negotiating timetable. European Commission Chief Negotiator, Michel Barnier, welcomed this as a start on the right foot towards his priorities: reducing uncertainty and an orderly withdrawal. In the quest for the best possible EU-UK partnership. However, with substance came conflict. A single financial settlement, citizens’ rights, and other divorce issues spurred irritation on both sides.

The UK's admission that it has to pay what it owes to the EU did not solve the disagreement on the exit bill, which remains in the order of the dozens of billions. Compensation claims by foreign investors for change of circumstances in UK law or policy loom. And the EU is already debating how to cover the hole that Britain will leave in its budget.

The European Council spurned Theresa May's offer to EU citizens in the UK (a 15-page document on how to receive ‘settled status’ in post-Brexit Britain and easily expel ‘serious and persistent’ criminals from it), later affirming it was simply not enough. The exclusion of the EU Charter of Fundamental Rights from the bundle of EU law that the UK will transpose into its legal order did not help calming the Brussels mood.

The EU further responded with its own papers. These said that after withdrawal the UK should comply with EU law and CJEU judgments to avoid penalties, whilst the CJEU would retain jurisdiction over cases in the UK that originated before the exit date. These proceedings could last more than a decade.

In the second round of talks last week the mood swing was complete. After Michel Barnier had reminded that EU-UK ‘frictionless trade’ was not possible and met UK Government opponents (such as Labour leader Jeremy Corbyn, Scottish First Minister Nicola Sturgeon and Welsh First Minister Carwyn Jones) the EU complained that the UK was unprepared for the task. Its chief negotiator even threatened to pause the talks until his British counterparts could make clear and realistic proposals on what they wanted and could show the UK was serious about the negotiations and the Union's needs.

Glimmer of hope

But below the political surface, there was progress and actual communication on substance. Talks about how to trade in the future within the WTO, as well as debate on solutions for the Irish Border and goods in trade between the two markets sparked hope that that some technical pragmatism and resolve could filter up from the working groups to the political spheres.

Hopes went as far as wishing to reverse Brexit. First, it was EU Council President Donald Tusk, who evoked John Lennon's Imagine as he flirted with the possibility that the UK could come back. Then came signals from London that not even the ruling party wants to leave the European Atomic Energy Community (Euratom), the EU-governed organisation responsible of European nuclear safety. With the general transitional clause of the Brexit Bill spelling possible continuation of post-Brexit situations and with voices in Brussels still arguing for a 'remain’ outcome, you can never know.

No time for division

Many considered Brexit as a unifying, cathartic event for the EU. After facing off populism in the first half of the year, the EU sealed a political deal on the trade agreement with Japan, made progress with Mexico and other Latin American countries, and positioned itself as a key global actor in the G7 and G20, notably in light of US President Trump's withdrawal from the Paris agreement on climate change. Nevertheless, prominent British think tank Chatham House reports division among the European public and élite on the EU’s way forward. Amidst rivalry among member states, EU ministers postponed to November the decision on the relocation of the European Banking Authority and the European Medicines Agency, both currently based in London.

The next round of Brexit talks is in August, and in October the EU should decide whether there has been sufficient progress to proceed to the next phase of negotiation. Meanwhile, the current frenzy over Brexit may die down. With German elections in September, the threat of a deepening migration crisis over the summer, and the imminent application of CETA (in defiance of French President Emmanuel Macron's electoral pledge), Brexit might become just another issue on the troubled EU agenda.

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