BRIEFING PAPER Number 8079, 1 September 2017 European Union By Jack Simson Caird Vaughne Miller (Withdrawal) Bill Arabella Lang Contents: 1. Introduction 2. Repealing the European Communities Act 1972: clause 1 3. Retained EU law: preserving and converting EU-derived law 4. Which EU laws will not be converted by the Bill? 5. Retained EU law: supremacy and the courts 6. Delegated powers: clause 7 – the correcting power 7. Delegated powers: clause 9 - implementing the withdrawal agreement 8. Delegated powers: other powers 9. Delegated powers: scrutiny in the UK Parliament 10. Devolution 11. Financial implications www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | [email protected] | @commonslibrary 2 European Union (Withdrawal) Bill Contents Summary 4 1. Introduction 7 1.1 When is exit day? 8 1.2 How much law would this Bill convert? 9 1.3 The constitutional status of converted retained EU law 10 1.4 The constitutional status of the Bill if enacted 11 1.5 Delegated powers and delegated legislation 12 1.6 What will be the impact of subsequent Brexit bills? 18 1.7 Extent 19 1.8 Financial implications 21 2. Repealing the European Communities Act 1972: clause 1 22 2.1 Summary 22 2.2 Overview of the European Communities Act 1972 22 2.3 Section 2(1) of the ECA – empowering directly applicable EU law 23 2.4 Section 2(2) of the ECA – implementing directives 26 3. Retained EU law: preserving and converting EU-derived law 28 3.1 Summary 28 3.2 Clause 2: preserving EU-derived domestic legislation 29 3.3 Clause 3: converting direct EU legislation 33 3.4 Clause 4: saving EU law rights 35 4. Which EU laws will not be converted by the Bill? 38 4.1 Summary 38 4.2 Introduction 39 4.3 Clauses 5(4) and 5(5): the EU Charter of Fundamental Rights 39 4.4 Schedule 1: supremacy, general principles and ‘Francovich’ damages 45 4.5 Schedule 6 49 4.6 EU ‘soft law’ measures 50 5. Retained EU law: supremacy and the courts 52 5.1 Clause 5: the supremacy of EU law 53 5.2 Clause 6: the jurisprudence of the CJEU 55 6. Delegated powers: clause 7 – the correcting power 59 6.1 Summary 59 6.2 Breadth and scope of clause 7 60 6.3 How might clause 7 be used? 67 7. Delegated powers: clause 9 - implementing the withdrawal agreement 71 7.1 Summary 71 7.2 The purpose and scope of clause 9 72 7.3 Why is legislation needed? 73 7.4 Power to amend Acts – including this one 74 7.5 Limits on the use of clause 9 75 7.6 Status of regulations under clause 9 76 3 Commons Library Briefing, 1 September 2017 7.7 Timeframe 77 7.8 Sunset clause 77 7.9 Parliament’s role in the content of a withdrawal agreement 78 8. Delegated powers: other powers 81 8.1 Summary 81 8.2 Clause 8: complying with international obligations 81 8.3 Clause 17(1) 84 8.4 Clause 17(5) 85 8.5 Clause 19 85 8.6 Schedule 1 Paragraph 1(2)(b) and 3 86 8.7 Schedule 5 part 2 86 9. Delegated powers: scrutiny in the UK Parliament 87 9.1 Summary 87 9.2 Schedule 7: provisions for scrutiny of regulations made under the Bill 89 9.3 Parliament’s scrutiny of secondary legislation 92 10. Devolution 100 10.1 Summary 100 10.2 Clause 11: legislative competence 101 10.3 Clause 10 & Schedule 2: executive competence 104 10.4 Analysis and reaction 108 10.5 Legislative consent 113 11. Financial implications 118 11.1 Spending 118 11.2 Taxes and other revenues 119 11.3 Resolutions 120 Contributing Authors: Paul Bowers, Devolution, Section 10 Matthew Keep, Financial Implications, Section 11 Emma Downing, Agriculture Tim Edmonds, Financial Services Sara Priestley, Environmental law Doug Pyper, Employment law Dominic Webb, Customs and Trade 4 European Union (Withdrawal) Bill Summary The European Union (Withdrawal) Bill (the EUW Bill) was published on 13 July 2017. The Bill cuts off the source of European Union law in the UK by repealing the European Communities Act 1972 and removing the competence of European Union institutions to legislate for the UK. As such, the EUW Bill has been referred to as “the Great Repeal Bill”. The Bill provides for a complex mixture of constitutional change and legal continuity. The EUW Bill follows the referendum result in June 2016, and the triggering of Article 50 on 29 March 2017 pursuant to the European Union (notification of Withdrawal) Act 2017. It is the most significant constitutional bill which has been introduced by the Government since the Bill for the European Communities Act itself in 1972. The second reading debate on the EUW Bill will be held on 7 and 11 September 2017 in the House of Commons. The EUW Bill extends to England and Wales, Scotland and Northern Ireland. Regulations under clause 7 and 17 can also extend to Gibraltar. Taking back control The Bill is a response to the decision taken by the electorate of the United Kingdom on 23 June 2016 to leave the EU. One of the stated aims of the successful campaign to leave the EU was to enable domestic political institutions to “take back control” of the laws that applied in the UK. Clause 1 of this Bill repeals the European Communities Act 1972 on the day that the UK leaves the EU. It returns to Parliament sole competence to legislate over policy areas where such competence is currently ceded to or shared with the EU. The Bill provides that after exit day EU law no longer has supremacy over legislation passed by the UK Parliament and rulings made by UK courts. Laws made by Parliament post-Brexit will no longer be subject to the principle of the supremacy of EU law. It provides for legal certainty by establishing a mechanism to retain, for the time being, the corpus of EU law which presently applies to the UK, but domestic courts will, when interpreting retained EU law, no longer be bound to follow the judgments of the Court of Justice of the European Union handed down after exit day (clauses 5 and 6). Legal continuity The Bill is designed to provide legal continuity during Brexit by copying over the entire body of EU law onto the UK’s post-exit statute book. Without the legislation, huge holes would open up within the statute book on exit day. In order to provide such stability, the Bill knits together a new post-Brexit constitutional and legal framework to replace that which has governed the status of EU law in the UK for the last 45 years. The Bill creates a new category of domestic law for the United Kingdom: retained EU law. Retained EU law will consist of all of the converted EU law and preserved EU-related domestic law which was in force on the day before the UK left the EU. Some elements of EU law are expressly not to be retained, for example, the rights under the Charter of Fundamental Rights (clauses 2, 3, 4 and 5). Retained EU law may subsequently be amended, replaced or repealed by the UK Parliament. The scheme’s approach to continuity relies on the creation of novel legal concepts that will become major new features of the post-exit day legal landscape. These novel 5 Commons Library Briefing, 1 September 2017 concepts, such as retained EU law, EU-derived domestic legislation, direct EU legislation, the supremacy of EU law are familiar in the sense that they are based on elements of our current arrangements, but will operate in ways that are fundamentally different from the concepts they will replace. The courts will eventually have to interpret these concepts and to decide how they fit within the exiting constitutional framework Uncertainty and complexity Secondary legislation, under powers delegated to Ministers by the Bill, is central to the scheme of the Bill. Both the correction of retained EU law, to the extent that it functions effectively after exit day, and the implementation of any agreement to withdraw from the EU will be achieved through secondary legislation to be enacted under powers in the Bill. Seven further bills, each intended to implement substantive policy changes in UK law following withdrawal from the EU, were announced in the Queen’s Speech in June 2017: it is anticipated that these and other “Brexit Bills” will also amend or replace retained EU law and implement the withdrawal agreement (assuming there is one) in specific policy areas. Secondary legislation, also known as delegated legislation, can be used by the Government to make changes to the law using powers delegated by an act of Parliament. The use of secondary legislation provides flexibility in content and in timing. It also provides for some confidentiality in the exit negotiations. Under the provisions of the Bill, the Government will have the capacity to use secondary legislation to enact some aspects of the withdrawal agreement quickly, rather than having to use the more lengthy primary legislation procedures. The Bill provides the legislative mechanisms to create the post-Brexit constitution and statute book rather than the substantive answers to questions as to what these will look like. These questions can only be answered as and when: • the content of the withdrawal agreement (currently being negotiated) is known, • any transitional arrangements are agreed, • the Brexit Bills are published, and • the statutory instruments that change retained EU law are produced.