A Customs Union Without a Single Market : Is Corbyn’s Position Credible?

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.

Does the Validity of the Article 50 Letter Depend Upon the Existence of a Formal ‘Decision’?

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.

Litigating Brexit – Law and its Limits

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.

 

Time For a Re-Think?

The new year has begun with a heightened sense of the magnitude of the UK’s decision to leave the EU and the imminence of the departure date. The fuse was lit in the dying days of 2017 when Lord Andrew Adonis resigned from his position as Chair of the National Infrastructure Commission. In itself that would be unremarkable were it not for the fact that Adonis used his resignation letter to lambast the government for failing to keep the UK in the EU and instead acting complicitly in the ‘populist and nationalist spasm’ of Brexit.

This was soon followed at the very beginning of the year by an intervention by former UK Prime Minister Tony Blair. Blair made clear that 2018 would be the defining year for Brexit and for the UK. While claiming to accept the outcome of the 2016 referendum, nonetheless, he argued that the will of the people was not ‘immutable’ and could change as the facts of Brexit became clear. He went on:

Once we know the alternative, we should be entitled to think again, either through Parliament or an election or through a fresh referendum, which will, of course, not be a re-run of the first because it will involve this time a choice based on knowledge of the alternative to existing EU membership.

And now an unlikely voice has floated the idea of another Brexit referendum. Nigel Farage has tweeted that:

Maybe, just maybe, we should have a second referendum on EU membership. It would kill off the issue for a generation once and for all.

Aside from the opportunity to have one last dance in the limelight, Farage’s interest in a second referendum speaks to a certain confidence that even as the facts do emerge about the consequences for the UK of its decision to leave the EU, voters would still not be persuaded that they had made the wrong choice. The very fact that they were being asked again would be seized upon by Farage as evidence that the liberal élite never listened and so the anti-establishment and pro-Brexit rhetoric would just be louder. During the referendum the Remain campaign failed to articulate a different narrative of the benefits of international cooperation in the face of common global challenges. It is not evident that another referendum could or would do so.

But aside from all that, it’s just not obvious that there is any time for a re-think.

Referendums don’t just happen overnight. They take time. And the experience of the 2016 referendum is instructive. The referendum was held on 23 June 2016. That was almost exactly 13 months on from the Bill that would give legislative authority for the referendum – the European Referendum Bill – from being introduced into the Commons. We are now just fourteen months away from the UK’s departure from the EU. The Bill itself took nearly seven months to become law (admittedly the summer recess may have played a part in that).

The Electoral Commission’s best practice for the conduct of referendums also stipulates that referendum legislation should be clear at least six months before it is required to be implemented or complied with by campaigners and those responsible for the conduct of the referendum. Note, this is not six months before the referendum is held but rather six months before campaigning gets underway. That would also entail giving sufficient time for lead campaigners to put together their bids and for them to be evaluated. Thereafter, the Commission also recommends a 10-week referendum period during which campaigning and campaign-funding is regulated.

So even if there is enthusiasm for another referendum, once you add up the time it will take to legislate and implement, it is hard to see how it could be done in the time that is left for the UK to remain in the EU.

Holding another referendum on the EU at the same time as the clock ticks down on the Article 50 process that will see the UK leave the EU by the end of March 2019 would also profoundly shape the nature of the debate. For example, how could a Remain campaign credibly try to persuade UK voters of the capacity of the UK to lead and engage with other European governments at the very moment that their leaders are making a public display of their unity as an EU27 and their preparedness even for a ‘no deal’ Brexit? How could a UK government seek to extract promises of change and reform from an entity that it is actively organizing to leave?  And how could that entity countenance making promises  to try and keep the UK in the EU without creating exactly the type of ‘moral hazard’ that leads Cormac Mac Amhlaigh to wonder whether Brexit can be stopped under EU law.

As I argued in Brexit Time: leaving the EU – why, how and when?, time shapes Brexit. It does so in terms of the quantum of time, and in terms of timing. The idea of another EU referendum looks like it would fail on both counts. There may not be enough time left and the timing of a referendum as negotiations continued on departure would be horrible.

All of which leaves Remainers with a choice.

Either they accept that the UK is leaving the EU and put their energies into trying to make it work. Or they need to find an alternative political means of reversing the 2016 referendum outcome. With both main political parties locked into Brexit, it is hard to see what would change to keep the UK in the EU.

Parliament Takes Back Control … or Does It?

On Wednesday evening, UK MPs voted by 309 votes to 305 to approve amendment 7 to the European Union (Withdrawal) Bill with a view to giving the House of Commons a meaningful vote on the terms of the ‘withdrawal agreement’ currently being negotiated between the EU and the UK under the Article 50 exit process. This defeat for the Government a has been hailed by Conservative rebel MPs and the Labour and other MPs who supported the amendment as the moment that Parliament took back control over the Brexit process.

So what exactly does the amendment do? After this amendment, clause 9 of the Bill will read as follows:

A Minister of the Crown may by regulations make such provision as the Minister considers appropriate for the purposes of implementing the withdrawal agreement if the Minister considers that such provision should be in force on or before exit day, subject to the prior enactment of a statute by Parliament approving the final terms of withdrawal of the United Kingdom from the European Union.

It should be apparent that this new statute will only be required if two conditions are met.

Firstly, and obviously, the new statute is only needed if there is a withdrawal agreement. If the EU and UK fail to agree terms on a withdrawal agreement, then there is nothing for Parliament to approve. In which case the UK would simply leave the EU consequent to the triggering of Article 50, which Parliament authorised when it passed the European Union (Notification of Withdrawal) Act 2017.

Secondly, as an amendment to clause 9, the need for a new statute only arises if a Minister intends to use delegated powers to implement a withdrawal agreement. Yet there is reason to think that this clause may be superseded by moves to put any withdrawal agreement on a statutory footing.

The Institute for Government has previously noted its concerns about the use of a statutory instrument to implement the withdrawal agreement. Particularly given the importance of ensuring that the Citizens’ Rights aspects of the withdrawal agreement have a sound legal footing both in EU and domestic law, primary domestic legislation would always have seemed like a better idea. So back in November the Government announced that a new Withdrawal Agreement and Implementation Bill would be presented to Parliament to legislate for the terms of withdrawal and for any transitional arrangements. More recently, and following the conclusion of Phase One of the withdrawal negotiations, the joint text agreed by the EU and UK reiterated that this new Bill will implement the agreement and fully incorporate the Citizens’ Right part.

All of which does leave one to wonder what is now left to be done by way of statutory instrument under clause 9. And if the answer is nothing, then there is no basis for Parliament to approve by way of statute the terms of the withdrawal agreement.

Parliament would still have it says on the Withdrawal Agreement and Implementation Bill. And the provisions of the Constitutional Reform and Governance Act would be triggered to give both Houses of Parliament oversight of the final deal. But there would be no specific statutory approval of the terms of the final agreement.

The loss of the vote on the amendment does remind us of the weakness of the current government. But that does not necessarily mean that it signals that Parliament has taken back control over Brexit.

Do They Know its Brexit Time? (Christmas Remix)

It’s Brexit Time

You really need to be afraid

At Brexit Time

We let no one in and we banish trade

And in our world of madness

Our eyes roll in despair

Throw your hands up in the air

At Brexit Time.

But say a prayer

Pray for the younger ones

At Brexit Time it’s hard

But if you’re lacking fun

There’s a world outside your window

And it’s a world of dread and fear

Where the only people crowing

Are the bitter Brexiteers

And the Brexit clock is ticking

Like the clanging chimes of doom

Dear God can’t we Remain

Instead of Leave?

And there won’t be dough for the NHS this Christmas time

The greatest lie we got last year from Leave (uh oh)

Where no one really knows

No truth or candour flows

Now we know its Brexit Time for all.

 

The Brexit Time blog is taking a break over the holiday season and will resume in the new year. Thanks to everyone for reading the blog and the book. And remember there is just time to give someone you love (or hate) a copy of Brexit Time this Christmas.

Exit Day! What Does it Mean for a ‘Transitional’ Deal?

 

The UK Government has announced that it intends to propose an amendment to its own European Union (Withdrawal) Bill to specify the day and the time of the UK’s exit from the European Union. ‘Exit day’ is to be 29 March 2019 at 11.00pm.

Under the original Bill, ‘exit day’ would have been decided upon by ministers. This left open the possibility that the UK and the EU might agree to defer the UK’s withdrawal in order to give the UK more time to prepare for life outside the EU. This option to defer departure as a means of transitioning to a new UK-EU relationship has now apparently been closed off. So what might this new amendment tell us about the possibilities for transition and the domestic legal instruments to implement transition.

With colleagues at the University of Cambridge, we have been thinking a lot about how a transitional framework might be constructed, and we wrote a briefing paper in October setting out some options. There are two levels to consider. First we need to think about what is legally possible under the Article 50 process in terms of a transitional framework. Second, it is important then to work out how domestic legislation might interact with an EU transitional framework. Clearly, of particular importance would be how the European Union (Withdrawal) Bill might relate to an agreed transitional arrangement.

In a paper published this week, I set out the four main options for an EU-level transitional deal:

  • An Article 50 withdrawal agreement that would contain a time-limited derogation to maintain certain ‘saved’ provisions of EU law. This body of ‘saved EU law’ would continue to impose reciprocal obligations as if the UK were still a Member State.
  • A provisional trade or provisional association agreement.
  • A transitional membership of EFTA and access to the Single Market via the European Economic Area Agreement.
  • A deferred departure from the European Union to give the UK more time to prepare for non-membership.

Given the announcement of an exit day that would scupper a deferred departure – unless of course the Bill retains a power for ministers to change that day – and given the political and legal obstacles to either a provisional agreement on the future relationship, or an EFTA/EEA approach, the front runner for a transitional framework would seem to be some sort of continuation of a limited set of current obligations on a strictly time-limited basis.

In other words, the Article 50 agreement would seek to achieve something similar to the domestic Withdrawal Bill by trying to preserve key aspects of EU law. Whereas the Withdrawal Bill domesticates EU law lock, stock and barrel, an Article 50 transitional agreement would be limited to saving those key provisions that domestic law alone cannot put into operation, namely reciprocal obligations such as those ensuring trade that is free from tariff and non-tariff barriers.

The UK would likely have to concede that any such arrangement would entail acceptance of the institutional arrangements that go hand in hand with these obligations including the jurisdiction of the Court in interpreting and applying those provisions.

The problem of this option is that it potentially muddies the waters for the operation of the domestic Withdrawal Bill, whose working assumption even before today’s announced amendment was that there would be a single ‘exit day’. If a transitional arrangement were to save certain EU obligations on existing terms, that would then need to be reflected in domestic law.

Today’s announcement might then be a much more important signal that is apparent at first sight. It is possible that the Withdrawal Bill will not seek to manage an EU transitional framework at all. Rather, it’s possible that a new Bill will be proposed that will give domestic legal effect to a transitional agreement. The Withdrawal Bill will domesticate EU law up until 29 March 2019, whereas a new Bill will allow for the continued application of certain ‘saved’ provisions of EU law for the period of transition. The new Bill might look and feel much like the European Communities Act 1972 which is set to be repealed. Indeed, keeping the same sort of constitutional architecture in place may be key to the EU’s willingness to accept any sort of transition on these terms.

Politically, replicating aspects of the 1972 Act in a new Bill that would continue to impose EU obligations for a time-limited period would likely encounter strong headwinds from those keen to ensure that the UK leaves the EU by March 2019. The announcement of a specific ‘exit day’ and the removal of an option to defer departure might well be the political bone that the Government is willing to throw in order to make a transitional arrangement more palatable.