Legislating for Brexit: stage 2

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Now that the EU Withdrawal Act has become law, the Government has turned its attention to the next phase of the legislative process to implement Brexit.

Overview

The Government’s attempt to formulate a vision of the UK’s future relationship with the EU has been the main focus of media attention in recent weeks. We now have a 100 page policy paper which envisages a customs arrangement with the EU which, if agreed, will be little short of a full customs union. However, the Government’s narrow Westminster majority means that its position may shift, depending on political developments in the UK and the response from the EU negotiators. 

The Government must now sell its vision to the EU in order to secure an agreement in principle on the new relationship, ideally at the next EU summit in October. This will allow the EU Withdrawal Agreement to be concluded, which will not only provide for an orderly departure from the EU, but also for a transitional period where the status quo will be preserved until the details of a new relationship can be worked out. 

In the meantime, domestic preparations continue to ensure that when we leave the EU the UK has a working statute book, and the means to collect customs and excise duties at its borders should the need arise. 

The EU Withdrawal Act was the first stage in this process (see our briefings here and here for more information). In late July the Government published a white paper explaining how it proposes to implement the Withdrawal Agreement once concluded, and how this interacts with legislation already passed. 

The mystery of the “implementation” period

One of the strange things about the EU Withdrawal Act is that it makes no mention of the possibility of a transitional or implementation period between the date the UK leaves the EU and the point at which it leaves the single market. On its face it repeals the European Communities Act at the point of Brexit, with the consequence that EU law would no longer apply in the UK from “exit day” – ie 29 March 2019. 

We now understand that the Government’s intention is to amend the EU Withdrawal Act in the event that the Withdrawal Agreement can be concluded. This will be done by introducing another piece of primary legislation, to be called the European Union (Withdrawal Agreement) Act (EUWAA). 

Assuming the Withdrawal Agreement is approved by Parliament, the EUWAA would defer the repeal of the European Communities Act, so that EU law would continue to apply (subject to some modifications) until the end of the implementation period (currently envisaged to be 31 December 2020). 

Underpinning for EU Citizens’ settlement rights

As well as adjusting the EU Withdrawal Act, the EUWAA would have another important role: providing the statutory underpinning for the rights it has agreed to confer on EU citizens already settled in the UK by the end of 2020. 
The detailed arrangements for the new settlement scheme for EU nationals (see here for more information) can be delivered by changes to the immigration rules. However the draft Withdrawal Agreement requires these rights to be directly enforceable by EU citizens against the UK Government. The EUWAA would provide the necessary statutory underpinning to meet these requirements. 

Legislating for the financial settlement

The EUWAA will also provide the statutory authority for the Government to meet its financial commitments under the Withdrawal Agreement. 

The white paper includes an accessible account of how these payments will be worked out, but less detail on what the relevant provisions in the EUWAA will look like. Like all other elements of the draft Withdrawal Agreement currently in place, these financial commitments are contingent on agreement being reached on the outstanding issues, including an outline of the future relationship between the UK and the EU. 

An explanation of the phased ratification process

The white paper clears up another mystery about the EU Withdrawal Act: how exactly the Government envisages the process for ratifying the Withdrawal Agreement will work. The sequencing would be as follows:

  • Parliament approves the final deal – as required by the EU Withdrawal Act;
  • Government introduces a bill to implement the Withdrawal Agreement – which will become the EUWAA;
  • Final scrutiny under the Constitutional Reform and Governance Act 2010, which involves the Withdrawal Agreement being laid before Parliament for 21 sitting days.

This process illustrates how tight the ratification timetable will become if agreement on the Withdrawal Agreement cannot be reached at the October summit. 

Preparations for a no deal Brexit

In the light of this latest white paper, the EU Withdrawal Act can be seen as the first stage in the legal preparations for a no deal Brexit. Indeed it confirms that work will continue on publishing the hundreds of statutory instruments required to correct technical “deficiencies” in retained EU law that will be triggered by the UK leaving the EU. While the aim is for them to be in force on the 29 March 2019, their effect can be deferred if necessary 

Likewise the Taxation (Cross Border Trade) and Trade Bills will continue their passage through Parliament. While still at the early stages of the process, the intention is that they will receive Royal Assent by Brexit Day in preparation for a no-deal Brexit. Again, their implementation can be deferred if the Withdrawal Agreement is concluded and ratified prior to 29 March next year. 

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