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Playing for high stakes

14 August 17

Fundamental constitutional issues are raised in the European Union (Withdrawal) Bill. The Journal offers an introduction to its key provisions, and some of the main issues highlighted by analysts

by Peter Nicholson

As dangerous and far reaching a piece of legislation as we have seen in our lifetimes”; “far from resolving any uncertainties, [it] merely serves to highlight and emphasise the vast scale of the uncertainty that lies ahead”. These are typical of the initial reactions from legal commentators to the European Union (Withdrawal) Bill, due to receive its House of Commons second reading on 7 September.
This article attempts to set out the main effects of the bill, and to distil the published analyses, set against the official explanatory notes. It is hoped that this will give readers some introduction to one of the most significant constitutional developments of our time.
 
Retained, and converted
Not surprisingly, the bill begins by proclaiming: “The European Communities Act 1972 is repealed on exit day.” Arguably this is unnecessary, since by withdrawing from the EU the treaties to which that Act gives force would cease to have effect, but as a political statement it is only to be expected. “Exit day”, as matters stand, will be 29 March 2019, the two year anniversary of the article 50 notice given by the Prime Minister, but by clause 14(1) of the bill it is for ministers to prescribe, the actual timetable being still uncertain.
Clauses 2-4 then perform the necessary task of ensuring that EU law, and EU-derived domestic legislation (such as that made under the 1972 Act), continue to have effect on and after exit day, until it is replaced through our legislative processes. They cover, respectively, delegated legislation made by virtue of s 2(2) of the 1972 Act; EU legislation having direct effect; and rights, obligations and remedies recognised and available in domestic law by virtue of s 2(1) of the Act, including those under directly effective provisions of the treaties.
As Professor Mark Elliot, author of the “publiclawforeveryone” blog, observes, the effect of this last provision is unclear: how will retained treaty rights (such as free movement) have substantive legal effect if there is no longer any obligation to recognise them by, or by other member states in relation to, the UK?
The status of such “retained EU law”, as this whole body of law is labelled, is clarified to an extent in clause 5. It will continue to have primacy over other UK legislation made pre-exit day, but not that made thereafter. Thus pre-exit legislation will remain open to challenge on the ground that it is inconsistent with retained EU law – even if an enactment under consideration has been amended after exit day, “if the application of the principle is consistent with the intention of the modification”.
The effect on human rights is unclear. While the ECHR is unaffected, clause 5(4) states, simply, “The Charter of Fundamental Rights is not part of UK law on or after exit day.” Although the UK purported to opt out from the Charter, and it applies in terms only in areas to which EU law applies, the EU Court of Justice ruling in the asylum case NS (C-411/10 and C-493/10, 21 December 2011) made it clear that the Charter does have effects in the UK. Further, under clause 5(5), this exclusion of the Charter does not affect fundamental rights or principles forming part of EU law independently of the Charter – a provision qualified in turn by sched 1, para 3, which precludes any legal action based on failure to comply with such general principles.
Directions to the courts are given in clause 6. Decisions of the CJEU are no longer binding on UK courts and tribunals after exit day, nor can references be made to the court – though regard may be had to its future decisions if a UK court “considers it appropriate to do so”. Retained EU law can be considered “in accordance with any retained case law and any retained general principles of EU law”, and the UK Supreme Court, and the High Court of Justiciary when sitting as a court of final appeal, may depart from retained EU case law by applying “the same test as it would apply in deciding whether to depart from its own case law”.
 
Devolution showdown
As far as the devolved legislatures are concerned, some of the most contentious provisions are found in clause 11 and sched 3. Whereas the prospect was held out during the referendum campaign of additional powers accruing due to the EU no longer regulating otherwise devolved matters such as agriculture and the environment, that will not automatically happen. Retained EU law will remain beyond the competence of Holyrood to modify, unless it can already do so now. Powers will only be extended by Order in Council – to be approved by both Houses of Parliament and the relevant devolved legislature.
“This is intended to be a transitional arrangement while decisions are taken on where common policy approaches are or are not needed,” the explanatory notes state. “The UK Government hopes to rapidly identify, working closely with devolved administrations, areas that do not need a common framework and which could therefore be released from the transitional arrangement by this power.” Taking the notes at face value, talks on this should already have begun.
Legislative consent (or Sewel convention) motions to these provisions will be required of the devolved parliaments. Here we are also in new territory. The Scottish and Welsh First Ministers came out jointly against what they termed the bill’s “naked power grab” of diverting powers to Westminster in this way, stating that they would not recommend consent to the bill in its present form. What if consent is refused? The UK Supreme Court in the Miller appeal [2017] UKSC 5 considered that its recent statutory expression has given the convention no additional force. Elliot, however, quoted with approval by Kenneth Campbell QC, comments that to call legislating in the absence of consent in this context “political folly” would be “a gross understatement”. Yet he also observes that it is in no one’s interests ultimately for the Withdrawal Bill not to be enacted: “Leaving without a ‘withdrawal agreement has so far been considered to be the hardest of ‘hard’ Brexits; leaving without a withdrawal agreement and without a Withdrawal Bill would result in chaos on an almost unimaginable scale.”
If so, we are in for a political poker game with very high stakes, but in which the UK Government holds the strongest cards.
 
Echoes of Tudor times
Most parliamentary time, at Westminster at least, may however be spent on clauses 7-9 of the bill and their related schedules. These contain the popularly-dubbed “Henry VIII” powers to adapt retained EU law to serve post-EU purposes – so nicknamed after the Statute of Proclamations 1539, under which any proclamation of the King had effect as if passed by Parliament.
Taking the explanatory notes at face value, these provisions confer on ministers “a power to make secondary legislation to deal with problems that would arise on exit in retained EU law” (clause 7), along with power to ensure continued compliance with the UK’s international obligations (clause 8) and power to implement any withdrawal agreement concluded with the EU (clause 9), anticipating that this may occur very shortly before exit day. Clause 7 speaks of making provision “to prevent, remedy or mitigate – (a) any failure of retained EU law to operate effectively, or (b) any other deficiency in retained EU law”. The notes further tell us that “a failure means the law doesn’t operate effectively whereas deficiency covers a wider range of cases where it does not function appropriately or sensibly”.
Certain limits are also put on the powers. They expire two years after exit day (clause 9 expires on that day); and they cannot be used to impose taxes, operate retrospectively, create offences punishable with more than two years’ imprisonment, or affect the operation of the Human Rights Act.
While these restrictions have been welcomed so far as they go, commentators are united in expressing the view that the powers remain “astonishingly vast” (Ian Dunt), “alarmingly vague” (Daniel Greenberg) or “extraordinarily substantial” (Mark Elliott). For one thing, “Regulations under [each] section may make any provision that could be made by an Act of Parliament” – including, in the case of clause 9, modifying the Withdrawal Act itself (could that include removing the stated restrictions on these powers?). Further, if exit day turns out to be delayed, the delegated powers are correspondingly extended.
Elliott takes the possible scenarios further: “And since the clause 7(1) power can be used to do anything that could be done by Act of Parliament, that means that it can be used to create Henry VIII powers. Thus the prospect arises of ministers using a Henry VIII power to confer further Henry VIII powers upon themselves or others – a form of delegated legislation on stilts.”
Dunt envisages further possibilities. Suppose, he writes, the article 50 period is close to expiring and the House of Commons is still to be given its promised vote on the final deal. “A minister could use this power to start making changes on the ground – tinkering with law and regulators in a way that makes it all but impossible for Parliament to vote against the deal, because of the chaos it would trigger.”
 
No concessions
What about parliamentary scrutiny? Few have a good word to say here. The Government has studiously ignored the recommendation of the House of Lords Constitution Committee (report of 7 March 2017) that special processes be devised for such exceptional powers, such as additional ministerial declarations, enhanced explanatory information, and a triage process under which a parliamentary committee would decide the scrutiny level for each instrument.
“In our view, the only essential element of whatever strengthened procedure is selected is that it should provide an opportunity for a statutory instrument to be revised in the light of parliamentary debate,” the committee recommended. No such possibility exists under the bill as it stands. Most Henry VIII regulations will be subject only to negative resolution procedure, meaning that they take effect unless either House passes a resolution to annul – a rare event, especially in the Commons. 
The only exceptions, in terms of the bill, are regulations that establish or relate to powers of public authorities, create or enlarge criminal offences, or create or amend a power to legislate. And while these will require to be approved by resolution of each House (affirmative procedure), the only options are to agree or reject them.
 
Interesting times
As for judicial scrutiny, one might think that given the breadth of the powers conferred, there will be little scope for vires-related court proceedings. Elliot, however, cites the UK Supreme Court decision in R (Public Law Project) v Lord Chancellor [2016] UKSC 39 and the dicta: “When a court is considering the validity of a statutory instrument made under a Henry VIII power, its role in upholding parliamentary supremacy is particularly striking, as the statutory instrument will be purporting to vary primary legislation passed into law by Parliament...
“Although Henry VIII powers are often cast in very wide terms, the more general the words used by Parliament to delegate a power, the more likely it is that an exercise within the literal meaning of the words will nevertheless be outside the legislature’s contemplation.”
He adds, with studied understatement: “The application of these principles to clause 7(1) is likely to make for some interesting litigation.” That may be especially so if the Supreme Court flexes the muscle of constitutional principle as it has most recently done in the employment tribunal fees case, R (UNISON) v Lord Chancellor [2017] UKSC 51.
To the extent that retained EU law covers devolved areas, clause 10 and sched 2 give the Scottish ministers and other devolved executives corresponding powers to correct any “failure” or “deficiency” in those areas, disapplying for this purpose the normal restriction which prevents the Scottish Parliament from legislating in a way incompatible with EU law. Correcting deficiencies in retained EU law will inevitably require some changes that would be incompatible with EU law.
 
Uncertain outcomes
Space only permits highlighting of some of the many issues arising from the Withdrawal Bill. Daniel Greenberg observes: “Businesses and others seeking to understand what the immediate Brexit-day impact will be on legislation in their areas of commercial or other interest will find that key provisions... depend on concepts which are inherently imprecise, and this makes it impossible to determine the practical result of the structure as a whole with clarity or certainty.”
If we add to the mix that the parliamentary debates are certain to be lengthy and contentious, and that the shape of the UK’s legal arrangements with the EU post-March 2019 remains more or less speculative, the journey ahead, for businesses and their advisers, remains one into the unknown. In the end of the day, it is likely to be ministerial action that provides any clarity, welcome or otherwise. 

 

To end where we began, it was Ian Dunt’s commentary that concluded: “Brexit was supposed to be about taking back control. If this bill is anything to go by, it is ministers – not the public – who are doing so. This is as dangerous and far-reaching a piece of legislation as we have seen in our lifetimes.” 
 
 
References
Mark Elliott, “The EU (Withdrawal) Bill: Initial Thoughts”: publiclawforeveryone.com
(and see the author’s collected resources at publiclawforeveryone.com)
 
Ian Dunt: “Why you can’t trust ministers with wide delegated powers”: politics.co.uk
 
Schona Jolly, “Scared about your human rights after Brexit? You should be”: theguardian.com
 
Daniel Greenberg, “European Union (Withdrawal) Bill: complexity without clarity?”: publicsectorblog.practicallaw.com
 
Kenneth Campbell QC, “Henry VIII Comes to Scotland, Wales and Northern Ireland, and Other Devolution Questions in the EU (Withdrawal) Bill”: ukconstitutionallaw.org

 

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