This blog was launched at the end of 2016 as a companion to my book Brexit Time and in order to provide a ‘running commentary’ on the issues surrounding the UK’s decision to withdraw from the European Union. It is time for the blog to take a new direction and to begin to think about life after Brexit. For the next three years I will be working on issues of regulatory alignment and divergence after Brexit as part of a Leverhulme Trust Major Research Fellowship. it makes sense to develop the blog to showcase that research as it emerges and to provide a forum for discussion about the impact of Brexit on the future direction of UK regulatory policy in key sectors. I hope you will continue to find the blog to be of interest and to continue to engage with the views and opinions expressed here.
Following her visit to the European Council meeting in Brussels, the Prime Minister Theresa May indicated that the UK might seek to extend the Brexit transition period ‘for a matter of months’. A recent European Policy Centre discussion paper has proposed a one-off mechanism to extend the transition period for a year. However, this week newspapers reported that the Cabinet had been warned that the UK could end up in a long-running transition following its departure from the EU. In a new Faculty of Law Research Paper, I explore three options open to the UK to extend the transition period and conclude that creating an extended transition and implementation facility would allow transition to end early as new agreements between the UK and EU enter into force.
For some time now, both the United Kingdom and the European Union have been agreed that once the UK ceases to be a Member State of the EU on 29 March 2019, it will enter into a ‘stand-still’ period during which the UK will continue to be bound by its existing EU obligations (alternatives to this approach were explored in an earlier blog). The rationale behind this is to avoid a ‘cliff-edge’ departure which would otherwise see tariffs and regulatory controls imposed on cross-border trade between the UK and the EU.
To the extent there has been disagreement between the two sides it has been on terminology – the EU refers to this as a ‘transition period’ while the UK insists on calling it an ‘implementation period’ – and duration – the UK sought a two-year period whereas the EU was only willing to agree a transition that would end on 31 December 2020 (coinciding with the end of the current budgetary ‘multi-annual framework’). The UK agreed to the EU’s offer of a transitionending in December 2020.
However, the duration of the transition period has come back to the fore of the negotiations for two reasons.
The UK believes that the issue of how to avoid a hard border on the island of Ireland can only properly be resolved in the context of the negotiations on the future economic relationship. The UK had hoped that this might be negotiated in parallel with the withdrawal arrangements. However, the EU has insisted that it is only the framework for future cooperation that can be discussed in the context of the withdrawal negotiations meaning that the terms of a future economic relationship can only be agreed once the UK leaves. As long as the UK is in transition, the issue of frontier controls on the island of Ireland does not arise. But with the transitional period ending at the end of 2020, EU negotiators have insisted on the need for a ‘backstop’ to ensure that if transition ends without a deal on a future relationship that meets the commitments made in the 2017 Joint Report, a ‘hard border’ in Ireland will be avoided. It is the failure to reach agreement on a backstop which is making negotiators on both sides reconsider a time-limited transition period.
The second reason for revisiting the duration of the transition period is that the pace of negotiations thus far, coupled with deep disagreement over the UK Government’s ‘Chequers Plan’ for a new UK-EU relationship, suggest that the transition period as currently conceived will be too short to allow for negotiations on a future relationship to be concluded. Taken together with the backstop issue, minds have turned to whether it would be prudent to extend transition,
In a recent European Policy Centre paper, Tobias Lock and Fabian Zuleeg make a strong case for the extension of transition, suggesting that a one-time one-year option to extend transition would be a workable solution.
In a new Research Paper, I explore three potential models for an extended transition:
- A one-off option to extend transition for a year following the end of the initial transition period (the Lock and Zuleeg model)
- A rolling or open-ended transition with an exit mechanism
- An extended transition and implementation facility.
The Research Paper suggests that while Lock and Zuleeg make a good case, their proposal still risks a ‘second cliff-edge’ at the end of an extended transitional period if there is no agreement on a future relationship. A one-year optional extension may not give negotiators sufficient time to reach an agreement and might not create sufficient confidence to avoid the need to negotiate a backstop.
The most obvious way to avoid a backstop would be to keep the UK in transition unless and until a new economic partnership between the UK and the EU was agreed (provided also that this met the commitments on the Irish border agreed in the 2017 Joint Report). However, a perpetual transition would be politically unacceptable, be difficult to manage in budgetary terms and would conflict with EU law. It would, therefore, need an exit mechanism. This could be modelled on Article 50 itself and allow either the UK or the EU to notify the other of their intention to end the transition period. After a defined period, the transition period would come to an end with or without a deal on a future relationship.
A compromise solution draws on the existing draft Agreement and would allow transition to end once new agreements on customs and trade, foreign, security and defence policy are agreed and became applicable. Unlike an open transition, this facility would have to have a defined endpoint and a proposed deadline of 31 December 2022 is suggested. This is beyond the next General Election which is scheduled for 5 May 2022. The aim would be to give negotiators the flexibility to agree new partnership arrangements but with incentives to reach agreements early to avoid the need to continue to use the transition and implementation facility. The UK and EU could depart transition well before the facility expired. This does not ‘solve’ the Irish border issue. The Withdrawal Agreement must contain commitments which have already been made to avoid a hard border. The pressure remains on the UK to define how a future relationship with the EU would meet those commitments. But by expanding the time available to continue negotiations, at least some of the current pressure on negotiators may be released. The alternative is that no deal is done on withdrawal and the UK departs the EU without a Withdrawal Agreement. In which case the issue of frontier controls comes quickly back onto the agenda. Extending transition in the hope of finding solutions may be the least worst outcome.
As Brexit negotiations between the UK and the EU move towards an endgame series of summits among the leaders of the EU27, little new has emerged about whether Prime Minister May’s ‘Chequers Plan’ – or a variation of it – will be acceptable to the EU.
Although reports were circulating that the EU’s Chief Negotiator, Michel Barnier, had described the plan as ‘dead’, European Commission President Jean-Claude Juncker – in his annual State of the Union speech– appeared to offer some hope to the UK that an ‘ambitious new partnership’ could be forged on the basis of a free trade agreement as envisaged in the Chequers Plan. Nonetheless, he also warned that a state that left the EU and its Single Market could not enjoy the same privileges as an EU Member State. Prime Minister May also knows that even if her Government can reach an agreement with the EU, there is no guarantee that MPs will endorse it.
Noticeably, the UK Government has been talking up its arrangements for a ‘No Deal’ Brexit. In August, the Brexit Secretary Dominic Raab outlined the UK’s preparations for a disorderly departure from the EU. An initial series of technical papers were issued by his Department, indicating the likely effects of leaving the EU without a legal framework to govern future trade and cooperation between the UK and the EU. With 80% of the Withdrawal Agreement in place – including settlements of the UK’s financial liabilities – Raab noted that the scenarios identified were not what the Government expected or wanted, and instead presented the publications of the papers as a government planning ‘for every eventuality’.
With the UK publishing a further round of No Deal technical papers on 13 September, the volume of No Deal chatter seems to have gone up considerably. The Prime Minister even hosted a special meeting of the Cabinet apparently to discuss contingency planning should the UK leave the EU without a deal. The Governor of the Bank of England, Mark Carney, also attended for part of the meeting and was reported to have told the Cabinet that a major property market crash would be a likely outcome of a No Deal Brexit.
Meanwhile the Brexit Secretary amplified remarks he made earlier in that week that ‘nothing is agreed until everything is agreed’ and that included the settlement of the UK’s financial liabilities as agreed in the first phase of Brexit talks. While repeating that the UK would honour its obligations, Raab made clear that should a No Deal Brexit occur, the agreement reached at the end of 2017 would lapse. At her weekly Prime Minister’s Questions session in the Commons, Theresa May had similarly noted that in respect of the accepted so-called ‘Divorce Bill’, in the event of a No Deal Brexit, ‘the position changes’. To be clear, the Government accepts it has financial liabilities and it is not suggesting it will not meet those liabilities. Nonetheless, the threat to take that settlement off the table is a further instance of the consequences of a No Deal Breit.
All this talking up of a No Deal Brexit appears aimed at a range of audiences.
The technical papers are supposed to give guidance to stakeholders about how the Government intends to implement regulatory arrangements governing goods like medicines and services like mobile phone use and data roaming. Yet much of this guidance does not get beyond telling businesses that the UK will legislate to allow EU-based manufacturers and service-providers to continue to access the UK while leaving enormous uncertainty as to what degree of reciprocal arrangements – if any – UK companies will experience in 27 other countries. The same goes for citizens’ rights after Brexit. If the deal done on those rights in 2017 disappears, the UK could legislate to replicate the terms of the deal for citizens of the EU27: a point that Raab has also made in interviews. But again, this does nothing to provide reassurance for UK nationals resident in any of the EU27 Member States with the potential for those states to take divergent approaches, subject to any common EU legislative rules.
Given that real certainty and clarity can only come from a Withdrawal Agreement that includes a clear transitional framework, and from some sense of what the future relationship between the UK and EU will entail, the No Deal chatter is really aimed at different political audiences.
In seeking to sell her plan to the public, discussion of a No Deal Brexit helps to prepare people for the reality that things will be different outside of the EU. For those ideologically committed to Brexit, the risks and downsides of EU withdrawal have often been dismissed as ‘Project Fear’: the Brexiteer equivalent of ‘Fake News’. The release of technical papers describing some of the potential fall-out from life outside the EU, allows the PM to worry the public just enough to make her plan seem like a less bad outcome.
At a domestic political level, talking up the risk of a No Deal Brexit is no doubt an attempt by Prime Minister May to focus the minds of MPs – as well as members of her own Cabinet – that her Chequers Plan is the only basis for an orderly exit from the EU. In her Panorama television interview, Mrs May repeated that the choice was between a deal based on the Chequers Plan or a No Deal departure from the EU. Were her own MPs and colleagues to reject a deal negotiated by her and to remove her as PM, the risk of falling out the EU without a deal increases. Avoiding that eventuality also means keeping her in No 10. The PM is using her own weakness and the threat of the UK crashing out of the EU to garner political traction for her Chequers Plan and to keep her in office (for the time being).
But another audience for all of this is the leaders of the EU27. The UK has been asking Barnier and his team to show flexibility and not to stick to the models of how they have done deals in the past. Raising the threat of a No Deal Brexit may be intended to appeal directly to the EU leaders to redefine or reinterpret the negotiation mandate of the European Commission to allow for talks to reach a positive conclusion. An upcoming informal summit of those leaders may be an opportunity to do just that although it is not clear that the Member States would actually change the mandate rather than clarify the EU’s endgame position. Again, it is the weakness of the UK that turns out to be its strength. Like a major bank during the financial crisis, the Brexit talks are too big to fail and the UK is probably pinning its hope on the EU27 to avert a failure given the terrible consequences of failure.
We do need to keep in mind that the current talks cannot and will not define the future relationship between the UK and the EU; it can only settle the ‘framework’ for that relationship. And so there is always the potential to kick the can down the road by agreeing a thinner rather than a thicker version of that framework. Indeed, the value of Sterling recently rose on the back of a Bloomberg report that Germany might accept a more minimal framework agreement.
Paradoxically, then, the current preoccupation with a No Deal Brexit is an indicator that some serious political thought is now being given to how to ensure that the Brexit endgame produces a Withdrawal Agreement. It is the political and economic consequences of failure that is driving the parties towards an agreement. The question is whether the concept of ‘too big to fail’ will be enough to ensure that any political agreement reached will also be endorsed either by MPs or by the public should a ‘People’s Vote’ transpire.
With the European Union (Withdrawal) Act 2018 gaining Royal Assent on 26 June 2018, the focus in the UK Parliament has turned to the scrutiny and amendment of the Government’s Taxation (Cross-Border Trade) Bill (aka the ‘Customs Bill’) and its Trade Bill. In votes on amendments to the Trade Bill in the House of Commons on 17 July, the Government managed to block attempts to amend the Bill to require the Government to negotiate participation in a customs union with the EU. The Government’s position has remained unchanged since the Prime Minister’s Lancaster House speech in January 2017 that the UK is leaving the EU customs union. Following Cabinet agreement at a meeting at Chequers, the Government’s White Paper on the framework of the future partnership with the EU identifies that the UK will only seek a free trade agreement with the EU, meaning that the UK and EU will form distinct customs territories.
But in a surprise result, the Government failed to block an amendment which requires it to be ‘an objective of an appropriate authority to take all necessary steps to implement an international trade agreement, which enables the UK to fully participate after exit day in the European medicines regulatory network partnership between the European Union, European Economic Area and the European Medicines Agency’ (new clause 6 of the Bill). The amendment was backed by prominent Conservative Brexit rebels including Ken Clarke, Dominic Grieve, Nicky Morgan and Anna Soubry. But what is the real significance of this?
Since the 2016 referendum there has been anxiety about what Brexit will mean for the approval and marketing of medicines, with the UK pulling out of the Single Market and withdrawing from EU institutions and agencies including the European Medicines Agency (EMA). As the Commons’ Health Select Committee Report on Brexit made clear, almost all the evidence it received suggested that after Brexit, ‘the UK should continue to align with the EU regulatory regime on medicines …’.
The Government’s desire for a future economic partnership with the EU includes a willingness by the UK to continue to abide by a ‘common rulebook’ for goods, including medicines. But in order for a rulebook to work and for there to be alignment with the regulatory regime on medicines, the UK will also need to participate in an institutional, administrative and regulatory infrastructure that make that rulebook work in practice.
The EMA – set to move from its UK base in London to Amsterdam following Brexit – plays an important role in the risk assessment of new drugs and in the system of ‘centralised’ authorisation of certain new drugs – including those to fight cancer and neurodegenerative diseases like Alzheimer’s. The Government has made clear its desire to continue to participate in the work of the EMA following the UK’s withdrawal; a position it reiterates in its July 2018 White Paper on the framework of the future partnership with the EU.
But what is significant about the amendment to the Trade Bill is that it looks beyond the EMA to the system for ‘decentralised’ authorisation of medicines coordinated by a network of national regulators and by which the majority of medicines are placed on the European market.
Nonetheless, the first thing to be clear about is that domestic legislation does not an international agreement make. Whatever the appropriateness or not of Parliament instructing Government on its objectives for international negotiations, in the end it is for the EU and the UK Government to agree any arrangements for participation in the medicines network and work of the EMA.
From the EU’s side, the balance of rights and responsibilities which will be achieved in any future relationship depends on the wider context of the overall relationship and here the EU has, to date, had a rather fixed view of the kinds of models it is prepared to work with. The European Commission Task Force 50slides on ‘Regulatory Issues’ from February 2018 offers a contrast between a free movement/Single Market model of cooperation, and a free trade model. According to the Commission, the regulatory tools and structures of the EU’s Single Market are not available under a free trade agreement. The idea of a sectoral approach to market access and regulatory issues is also rejected by the European Commission. Accordingly, whether or not the UK does get to participate in the European medicines regulatory network and the work of the EMA is not an issue that can be negotiated separately from that of the future relationship, and any future participation is dependent on whether the EU can accept that the UK may benefit from regulatory aspects of the Single Market without being in the EU or a party to the European Economic Area (EEA) Agreement like other non-EU states, Norway, Iceland and Liechtenstein who do participate in the medicines network and aspects of the work of EMA.
There is also an important issue of time.
The future relationship will follow a period of transition during which time the UK will continue to be bound by, and apply EU law, in terms of the Withdrawal Agreement that the UK hopes to finalise with the EU by October 2018. Nonetheless, the draft Withdrawal Agreement makes clear that although the UK will continue to have obligations as if it still were a Member State, in terms of appointment of members of EU agencies and participation in the decision-making and the governance of EU agencies the UK will not be considered to be a Member State after 29 March 2019. Now, it should be recalled that even for those non-EU states that participate in the EEA Agreement there is no direct participation in the management boards of EU agencies but there is participation in working and expert groups. Importantly, the three non-EU states that participate in the EEA are represented in the Coordination Group for Mutual Recognition and Decentralised Procedures that manages this system for mutual recognition that is at the heart of the medicines regulatory network.
However, the draft Withdrawal Agreement states in Article 6 that during the transitional period, attendance at meetings of committees, expert groups or similar entities of EU agencies is in principle excluded unless the Agreement provides otherwise. Indeed, Article 123(5) of the draft Agreement only envisages the representation of UK experts in the work of EU agencies where an act is to be addressed to a company established in the UK. More significantly, Article 123(6) states that the UK will not act as a lead authority or ‘reference Member State’ in the risk assessment, examination, approval or authorisation of certain products including medicines (Annex ‘y+6’). The implications of this are set out in a Q&A document of June 2018 produced by the Heads of Medicines Agencies. After 29 March 2019 – the beginning of transition – pharmaceutical companies that use the UK as a Reference Member State for obtaining authorisations for their medicines will not be able to make any new regulatory submissions until they appoint a new Reference Member State. All of which is on top of the problem that any market authorisation holder must be established in an EU/EEA state and that in order to hold a valid medicines authorisation, the holder must also be established in an EU/EEA state.
The limitations of the amendment to the Trade Bill now become clear. Even assuming that the UK Government could persuade the EU to conclude a future international trade agreement that will allow UK medicines’ regulators to participate in the EU regulatory regime – and the White Paper is clear that the Government does want UK regulators to be able to act as a ‘leading authority’ for medicines assessment (paragraph 30 c.) – there is an evident gap during the transitional period where – according to current texts – the existing system for decentralised medicines authorisation will not work as it has worked during the UK’s EU membership. The UK will not be a Reference Member State and authorization applicants and holders will not be based in an EU/EEA state.
It seems inconceivable that the UK will arrive at a future relationship with the EU that allows full participation in the European medicines regulatory regime after a transitional arrangement which would essentially exclude the UK from core aspects of the system of decentralised authorisation of medicines and mutual recognition of such authorizations.
There is clearly some way for negotiations between the UK and the EU to go and the amendment to the Trade Bill on medicines certainly reminds Government of the importance politicians and the public attach to this issue. However, UK parliamentarians cannot make this system for the regulation of medicines work by legislative fiat and in focusing on the future trade relationship with the EU it misses the target in terms of the need to protect this system during the transitional period. That may be a bitter pill to swallow.
There are 340 days to go until the UK leaves the EU.
The time remaining for the UK and EU to negotiate a withdrawal agreement is even less than that.
Domestic legislation still needs to be passed to retain EU law in national law. Time will also be needed to give domestic legal effect to any withdrawal agreement.
Time is short even to do what the UK Government wants to do, namely to leave the EU, its Single Market and Customs Union, and instead negotiate with the EU a new relationship based on a free trade agreement.
And yet we still seem to be talking about alternative options. Indeed, the term “least worst Brexit” seems to be gaining some currency as politicians and others wake up to the reality of what the UK intends to give up from its EU membership as well as all the difficulties and limitations associated with what the UK Government aspires to achieve.
A prime example of these attempts to temper the effects of Brexit is the idea of remaining in a customs union. The focal point for this debate is Parliament, with both the Lords and the Commons seeking to steer the Government towards a customs union.
For the Commons, a debate will be held on Thursday on a motionthat calls on the Government ‘to include as an objective in negotiations on the future relationship between the UK and the EU the establishment of an effective customs union’ between the UK and the EU. It will be a debate with no immediate legal consequences and the reference to a ‘future relationship’ may look beyond the immediacy of current negotiations. The Lords, however, have gone further in amending the European Union (Withdrawal) Billto make the repeal of the European Communities Act 1972 conditional on Ministers laying before both Houses of Parliament a statement concerning the steps taken in negotiations under Article 50(2) to negotiate an arrangement to continue participating in a customs union with the EU.
In response to these moves, the UK Government has today repeated its position that the UK will be leaving the customs union. So what should we make of attempts by Parliament to push for a least worst Brexit?
The first thing to be clear about is that the UK Government is not negotiating in Brussels according to a mandate that Parliament has set for the UK Government in advance of negotiations. Our constitutional set up is instead one in which Parliament’s role is to legislate to implement international agreements and, in more recent times, to signal its approval of such agreements prior to ratification so as not to lead to the circumstance in which a Government is confronted with a Parliament unwilling to legislate for a deal that it does not like. We are now 15 months on from the Lancaster House speech in which the UK Government set out what sort of Brexit it wanted. We are also more than a year into the negotiations that will lead to the UK’s withdrawal from the EU with likely less than half a year left to finalise the deal. This hardly seems the moment for Parliament to decide it wants to instruct the UK Government on what it should be negotiating.
Secondly, Parliament cannot simply legislate for a customs union. The UK is leaving the EU and any future relationship can only be negotiated between the UK Government and the EU. The Lords amendment to the Withdrawal Bill does recognise that in the sense that it only demands that Parliament is informed about those negotiations. As such it is also an amendment whose condition is easily satisfied. After all, ministers may simply state to Parliament that ministers have taken no steps to negotiate a customs union as it is not government policy to have one with the EU.
Given that the Government is clear about what it wants, the only real option for Parliament is to bring the Government down one way or another. And if this Government is gone, are we really talking about forging a least worst Brexit or something else all together?
Because if there is a strong enough political momentum to reject the Government’s Brexit strategy and to argue instead for a customs union and likely also the Single Market, then perhaps there is political momentum to push for retention of EU membership itself.
As I argued in Brexit Timeand as I have been suggesting here, Brexit is a choice in time and of time. In the time that remains before the UK leaves the EU, I think the choice is not between the UK Government’s form of Brexit and a least worse version. It is between what the Government is seeking or the UK remaining in the EU.
So I have come to a conclusion. There should be a referendum on the question whether the UK leaves the EU on the terms that the UK Government negotiates, or the UK remains a Member State of the European Union. There is no time for a third way option and all the chatter that suggests that such an option might be viable is, to my mind, a distraction.
I fully understand those that believe another referendum could be divisive. But to be clear this would be a referendum on a different proposition. And it seems to me that people on both sides of this argument need to have the courage of their convictions. Either the Government is right to push for an end to EU membership on the terms it negotiates, or it is wrong and the status quo should prevail. As I have also argued on this blog, if there is to be another referendum, time is limited.
This is not the time for Parliament to try and find a middle ground. It is time for Parliament to allow the electorate to make a decisive choice. If Parliament wants to legislate for anything it should be to for a referendum.
In speeches this week, the Leader of the Opposition and the Prime Minister are setting out their visions for the UK’s future relationship with the EU. Things got underway today with Labour’s Jeremy Corbyn announcing that Labour would press for the UK to remain in the Single Market and a Customs Union with the EU through a transitional period, with the possibility of concluding a permanent Customs Union a “viable option”, provided the UK could have an “appropriate say” in future EU trade deals with non-Member States.
The political intention is to create clear water between a Labour Brexit and a Conservative Brexit. Under a Conservative Government, the UK will leave the EU, its Single Market and its Customs Union at the end of any transitional period. The Conservatives see this as vital to deliver on its promise to regain control over regulatory policy and trade policy once the UK leaves the EU. As part of its “Global Britain” strategy, the Government wants to be free to enter into free trade arrangements not just with the EU but with other non-EU states. Labour, by contrast, has decided that the pursuit of an independent trade policy is not something that makes the electorate vote one way rather than another. Instead, it is content for the UK to have tariff-free trade with the EU through a Customs Union. Crucially, and despite the insistence of some parts of the Labour Party, the Labour leader has not committed to keeping the UK in the Single Market after the end of the transitional period. This is for two reasons. Firstly, and despite contrary analysis even from Labour supporters, the Labour Leader continues to believe that EU competition and state aid rules would prevent a future Labour Government carrying out its economic programme. Secondly, and despite the warm words in his speech about EU nationals, the Labour Leader is not willing to accept free movement of people in return for free movement of goods and services.
So what might a post-Brexit Customs Union between the UK and the EU look like?
In certain respects, the Labour Party’s proposal would take the UK back to its early membership of the EEC. When the UK joined the EEC in 1973 it became part of the Customs Union which had been completed among the six founding states in July 1968. Under transitional arrangements, the UK, Ireland and Denmark adopted the EEC’s Common Customs Tariff and progressively eliminated any remaining customs duties. The Single Market as we know it now was still in its early development. While rulings of the Court of Justice were being used to remove non-tariff barriers on a case by case basis, it wasn’t until the Internal Market programme of the mid-1980s – a programme backed by the UK – that major steps were taken to advance EU harmonization efforts to converge the regulatory policies of EU Member States. But the “1992” programme was largely focused on trade in goods, with non-tariff barriers in services being slow to change. Labour mobility was also relatively low. In other words, a Customs Union without a Single Market would turn the clock back to the 1970s with the limits on cross-border market access arising not from customs but from pervasive non-tariff barriers in both goods and services markets.
Of course, the crucial difference between then and now is that the progress which has been achieved in eliminating non-tariff barriers does not automatically disappear as soon as the UK leaves the EU. Indeed, from a domestic regulatory perspective, the European Union (Withdrawal) Bill aims to domesticate all existing EU regulatory requirements as a matter of UK law. But two things are not clear from Labour’s proposals today. Firstly, how will the current system of rules be made to operate if the UK is not part of the wider European administrative and judicial landscape which makes existing Single Market rules actually work in practice? Secondly, to what extent can or will UK regulatory policy diverge under a Labour Government?
In his speech, Jeremy Corbyn referred to “staying close” to the EU and to continue to support EU agencies with regulatory tasks including the European Food Safety Authority and the European Chemicals Agency. But even the three European Free Trade Association (EFTA) states that join in the Single Market through the European Economic Area agreement have limited direct participation in the work of European agencies. Their representatives do not form part of the management boards of the agencies. The UK could hardly get a better deal on EU agencies while staying outside the Single Market than Norway which participates in the Single Market.
The Labour leader was also keen to assert that his proposals on a Customs Union would not see a hard border on the island of Ireland. However, it is regulatory alignment that is as much an issue for the border in Ireland as the elimination of tariffs. Arguably there is more reason to have a frontier control to ensure the physical security of the European market than there is to ensure the collection of tariffs on the import of goods onto the island of Ireland. Again, it is unclear why Labour is focusing on a Customs Union at the expense of the continued elimination of non-tariff barriers to trade through the Single Market.
If we step back from the specifics of Brexit and look at the wider international landscape, the vast majority of regional trade agreements that are notified to the World Trade Organization are regional Free Trade deals rather than Customs Unions. These Free Trade arrangements do the same work in eliminating tariffs in trade in goods between participating members but leave those states free to control their trade policies with non-members. As tariffs are reduced, it becomes more and more obvious that the big issues are around regulatory alignment and regulatory cooperation. Pursuit of a Customs Union on its own is simply not a strategy pursued by the world’s major trading nations.
In the end it is difficult to see how a Labour Government can credibly pursue a UK-EU Customs Union without at the same time having an arrangement with the EU on alignment of UK regulatory policy. After all, there is little point giving non-UK/EU goods the benefit of free circulation in a UK/EU market if in practice, non-tariff barriers impede their cross-border movement. Indeed, the success of the EU’s external trade policy – the free trade agreements with which a Labour Government would be aligned in a UK-EU Customs Union – is wholly predicated on the capacity of those goods to move freely in the market once they comply with common EU regulatory norms.
Today’s speech is more about trying to define a Labour Brexit that is different from a Conservative Brexit. In that respect there is a clear divide between a UK in a Customs Union and a UK that pursues a Free Trade model. But neither approach solves the border issues on the island of Ireland. And a Customs Union without barrier-free movements of goods and services is just a description of what a Labour Government under Harold Wilson inherited in 1974. If Labour is to avoid accusations that it is trying to turn back time while lip-syncing its way through difficult discussions about the Single Market it is going to have to do more than pin its hopes on a UK-EU Customs Union.
Back in June 2017, I wrote something for the UK Constitutional Law Association Blog addressing the argument that the Article 50(2) TEU notification was invalid due to the lack of a ‘decision’ to withdraw in terms of Article 50(1). For the reasons I gave then, I found the argument misguided. But it is an argument that has continued online and is the subject of possible judicial review proceedings. As I set out in an earlier post this week, Brexit litigation has had a mixed reception in the courts. While the Miller case is a clear example of a case getting into court and producing a result for the complainants, others have not fared quite so well. Given the strength of feeling in some quarters that there is an arguable legal point to be addressed, I am taking the opportunity to clarify my own position. I won’t repeat the earlier argument but rather try to spell out the key dimensions of the argument.
If we were reading Article 50 not as a provision of EU treaties but instead as a domestic statute, the idea of a single chronological shift from ‘decision’, to ‘notification’ and ultimately to ‘withdrawal’ would have a self-evident logic to it. According to that logic, the notification and consequential withdrawal would seem to depend on a prior decision being made in accordance with the UK’s constitutional requirements. If such a decision was absent, there might seem to be grounds for thinking that notification and withdrawal were resting on a false legal premise.
Article 50 is not a UK statute. It is a provision of an international treaty. Its purpose is clear. Article 50(1) TEU acknowledges a right in international law for a state to withdraw from a treaty. It also acknowledges that the domestic circumstances giving rise to the exercise of that right are a matter for that Member State and attract whatever constitutional requirements are laid down in domestic law. EU law neither demands nor dictates those constitutional requirements.
Instead the work of Article 50 is procedural and is laid down in Articles 50(2) and 50(3). These procedures are consequential not upon the domestic process giving rise to withdrawal but instead to an EU-level notification made under Article 50(2) TEU.
In this way it should be clear that Articles 50(1) and 50(2) are not stages in a process within a single constitutional order. They are spatially displaced in constitutional terms meaning that there is no automaticity in terms of what happens at EU level in response to what happens at the domestic level.
I say there is no ‘automaticity’ but that doesn’t necessarily mean that EU law would be blind to the circumstances giving rise to notification. If a Member State’s government was acting in a manner that was manifestly unconstitutional and had been declared as such by a competent body – this would principally be the Member State’s own institutions but could conceivably be the EU itself inasmuch as the unconstitutional behaviour was also a breach of the EU’s own values justifying the triggering of the Article 7 suspension process – then there would be grounds for suggesting that the Member State was not legally competent to notify under Article 50(2) TEU.
In the context of the UK’s notification, the assertion is typically not that an unconstitutional decision has been made, but rather that no decision has formally been taken. The problem then for those asserting that the Article 50 notification is not valid would be to show that the absence of a formal decision is itself unconstitutional.
As I made clear earlier, the issue of what is or is not a constitutional requirement in the UK does not derive and cannot derive from Article 50(1). In that sense Article 50(1) does not impose any EU law obligations but rather merely re-describes that any legal obligations can only be those of the Member State’s own constitution. In an unwritten and uncodified constitutional order like the UK, determining what those requirements might be is not without its difficulties.
The UK Supreme Court in Miller was clear that as a matter of domestic constitutional law, the loss of a source of rights that would arise consequential to notification could only occur if Parliament gave statutory authorisation for notification. In that way, the Court may be seen to have understood that the domestic legal effects flowed from notification and so constitutional procedures had to attach to notification. It is true that the Court does at para 131 refer to statutory authorisation for the ‘decision to withdraw from the European Union’. Nonetheless, reading the judgment as a whole reinforces that it is the effects of notification that are at the core of the Court’s concern.
Aside from Miller the question is simply whether UK law imposes any specific requirements on the making of a decision pursuant to Article 50(1) and if so, what sort of procedural or substantive standards need to be met.
Firstly, there was no constitutional requirement to hold a referendum. It was not constitutionally mandated and nor was it a referendum that was required to be held consequential to the European Union Act 2011. Secondly, the referendum was advisory; it was for government to take whatever steps it wished following the referendum. In that respect it was made clear that the government would respect the outcome of the referendum. Thirdly, following the referendum, the government immediately took steps to put in motion the UK’s withdrawal from the EU. But there was no legal framework that dictated how this should occur or when. The European Union Referendum Act 2015 laid down no obligations on ministers as to what they should do in the event of a ‘Leave’ vote and and did not seek to demand that the government formally adopt any kind of decision following the referendum.
In this way, if there is no legal requirement for the government to adopt a ‘decision’ it is simply the case that the UK has no constitutional requirements in respect of a ‘decision’. Inasmuch as there is a decision it is – much like the constitution itself – to be found in a range of documents, practices and institutional changes that are an expression of the government’s policy that the UK is leaving the EU. It might also be said that inasmuch as there is any specific text that embodies the decision it could be the Lancaster House speech in January 2017 or the notification letter itself which embodies the decision. But the point remains that from a domestic perspective, the absence of a formal ‘decision’ is not itself unconstitutional.
The UK constitution operates on the basis that the Government is politically accountable to Parliament for its policy decisions and Parliament legislates to give them legal effect. The Government is accountable to the electorate at a General Election and it is through elections that a new Parliament is elected and Government formed. The UK’s constitution – notwithstanding the rise of judicial review – remains primarily political. Cases like Miller are important, but they should not lead us into a false sense of what the UK constitution demands in legal terms.
All of which leads me back to my earlier blog post this week. We ought not to expect that courts will be in a hurry to give permission for legal challenges to be brought to the Brexit process. If permission is given to allow a new Article 50 challenge to go ahead, I remain of the view that the validity of notification under Article 50(2) is not dependent on a formal decision having been made under Article 50(1). The UK’s constitution does not impose obligations such that the absence of a formal decision under Article 50(1) could be considered to be contrary to the UK’s constitutional requirements. Certainly there are no grounds whatsoever for considering that as a matter of EU law, the Article 50 process that is now underway is vitiated by an error of law.
A year ago, we were all digesting the Miller judgment of the UK Supreme Court. The Court ruled that an Act of Parliament was needed to authorise the triggering of Article 50. Today, the Irish Supreme Court has been considering what questions to refer to the European Court of Justice following its earlier O’Connor ruling concerning the effects of Brexit on the operation of the European Arrest Warrant system. Brexit has generated some interesting litigation but with mixed results. Test cases that simply float abstract legal propositions have often failed to land their punches, whereas claims that focus on concrete losses of rights or changes in legal status have had greater traction.
The case brought by Gina Miller is a useful starting point. Although the litigants were trying to test a legal proposition – indeed, it was originally a post on the UK Constitutional Law Association blog that floated the idea that an Act of Parliament was necessary before Article 50 could be triggered – the claimants’ lawyers skilfully categorised the loss of rights that would occur once the UK left the EU in a way that made it clear to the judges hearing the case that their complaints were real.
What the Miller case left open was the question of whether an Article 50 notice was revocable. It is a point that has been discussed in a recent European Parliament report and on blogs and other legal writings. It wasn’t necessary for the UK courts to rule on the point in the Miller case and the arguments proceeded on an assumption that the notice was not revocable simply to allow the complainants argument to be tested. Other subsequent litigation, however, has attempted to raise this question more directly, often with a view to eliciting a definitive view on the issue from the Court of Justice in Luxembourg. Nonetheless, getting these cases into court has proved rather difficult.
One reason these cases prove difficult is when they seek to test a legal proposition without it being completely clear that there is an underlying dispute or legal problem that requires an answer to the legal proposition being tested. Back in January 2017 – and before the triggering of Article 50 – the barrister Jolyon Maugham QC and the Good Law Project crowd-funded a legal challenge to be brought in the name of a group of politicians before the Irish courts naming Ireland and various EU institutions as defendants in a complaint that the Article 50 process had in fact already been triggered. It was claimed that as the EU was then refusing to formally begin negotiations there was a breach of the Article 50 procedure. In that light, the issue of the revocation of an Article 50 notice was raised. Maugham himself described the case in the following way: ‘Strip away the complexity and it looks to find an answer to a simple question: do we have the option of changing our minds about the wisdom of Brexit?’ Of course, an answer to this question is only necessary if you think the referendum got it wrong in the first place. By the end of May, the complainants had decided to discontinue the case. One important factor was timing, with any reference to the Court of Justice unlikely to occur until a case got to the Irish Supreme Court. But even if the case had got to court it is not entirely evident that the Irish courts would have considered that they had jurisdiction to hear the case or that a reference to Luxembourg on the revocation issue was necessary.
More recently, a mix of Scottish MPs, MSPs and MEPs sought to bring judicial review proceedings in the Scottish courts. The case was again supported by Jolyon Maugham and the Good Law Project and was also crowd funded. The case was brought with a view to obtaining a reference to the Court of Justice on the revocability of the Article 50 notice. The Government, however, argued that there was no justiciable issue as it had no intention to revoke the Article 50 notice. In a short and pithy ruling on 6 February 2018, Lord Doherty in the Court of Session agreed with the UK Government that the issues raised were hypothetical and academic. As the claimants had no real prospect of success, permission to proceed with an application for judicial review was refused. However, an appeal to the Inner House of the Court of Session is being sought, with counsel for the petitioners contesting Lord Doherty’s evaluation of the claim as hypothetical and academic.
Other attempts to bring judicial review proceedings have also run into problems. The Single Market Justice campaign fronted by a Leave campaigner (Adrian Yalland) and a Remain campaigner (Peter Wilding) attempted to bring judicial review proceedings on the question of whether an Act of Parliament was necessary to authorise the UK’s triggering of its withdrawal from the European Economic Area (EEA) Agreement under Article 127 of that agreement. Absent a formal withdrawal from the EEA, the claimants hoped to keep the UK in the Single Market. However, the application was dismissed as being premature given that the UK Government had not, at the time, set out its position on whether it wished to stay in the Single Market.
But if these public interest test cases brought by politicians and advocacy groups have failed to build on the momentum of the Miller case in order to gain legal leverage over the mechanics and procedures of Brexit, it is the impact of Brexit on the real lives of individuals that has fuelled a more recent bout of litigation.
Whereas the Miller case proceeded on the assumption that Article 50 would not be revoked with the consequence that the loss of rights – including EU citizenship rights – was apparently inevitable – the bullet hits the target as lawyers for Miller argued – the Dutch District Court has this month considered whether that loss of rights is actually inevitable. There has been some discussion of the issue of whether EU citizenship rights are ‘acquired rights’ on legal blogs and in a report from the House of Lords European Union Committee. The Dutch court has referred two questions to the Court of Justice on this question. In essence, the Dutch court wants to know if the loss of rights is automatic, and if not, what restrictions there might be on such rights. The case is being brought by British citizens and is supported by the group Brexpats – Hear Our Voice which is being assisted by Jolyon Maugham.
As a result of today’s activities in the Irish Supreme Court, the Court of Justice will also shortly receive a reference on whether a national court can refuse to implement a European Arrest Warrant if that entails surrendering an individual to the jurisdiction of UK courts where that might lead the individual to serve a term of imprisonment in the UK after the UK leaves the EU. The Irish High Court had granted an order to execute the arrest warrant, but an appeal was sought to the Irish Supreme Court on the basis that it raised an issue of EU law that required an interpretation from the Court of Justice. In its judgment on 1 February 2018, the Supreme Court accepted that the issues raised were not hypothetical and that it was appropriate to give leave to appeal in order for a reference to be made to the Court of Justice.
Amidst these litigation successes and failures there is a wider point to make. As the response to the Miller case from certain quarters of the British tabloid press serves to highlight, litigation can be seen as an attempt to subvert the outcome of the June 2016 referendum. Although the case had nothing to do with the legality of the referendum itself or its outcome, one perception of the move to give parliament the decisive say on the triggering of Article 50 was that the litigation was designed to alter the political course that had been set by the referendum. If that was the intention behind the litigation, it failed. But it drew attention to a sense that a certain section of society might seek to use law and litigation to direct, if not trump, politics. As I argue in Brexit Time, if the public was concerned about the power of political elites, it might equally have been wary about legal elites using law and litigation to change politics.
All that said, the failure of cases that sought to raise the revocation issue may suggest that abstract ‘public interest’ litigation has its limits. Indeed, the cases from the Dutch and Irish courts may instead point to a more traditional role for courts, namely as a mechanism for the concrete protection of the rights of individuals. The boundary between these types of cases is far from clear as the Dutch case vividly illustrates. Nonetheless, success may depend on making a broader public interest bite on the particular circumstances of individuals and changes in their rights or legal status.