03 July 2017

In March the UK government published its white paper titled ‘Legislating for the United Kingdom’s withdrawal from the European Union’ (the “White Paper”). The White Paper outlines the government’s proposals in respect of the “Great Repeal Bill” and how it plans to transpose EU law into UK law.

Looking beyond the recent general election and the political uncertainty regarding the Brexit debate, the current proposals are significant as the UK’s departure from the jurisdiction of EU law will have wide-ranging consequences for almost every sector of British business.

The three main objectives of the Bill are as follows:

1. to repeal the European Communities Act 1972 (the “ECA”);
2. to convert EU law as it stands at the moment of exit into UK law before the UK leaves the EU; and
3. to create powers to make secondary legislation.

Repeal of ECA

The ECA authorises the process by which EU law becomes a source of UK law and takes precedence over all sources of UK law. The constitutional effect of the ECA was described in the recent article 50 case (Miller v Secretary of State for Exiting the European Union) as “unprecedented”. Its repeal is largely seen as symbolic, as it is considered that it would be possible for the government to convert EU law into UK law by making minor amendments to the ECA. However the government states that the Great Repeal Bill “allows the UK to take control of its own laws” and will end the general supremacy of EU law.

Conversion of EU law

In the White Paper the government states that the conversion of EU law into UK law will allow businesses to continue operating knowing that rules have not changed significantly overnight, and will provide fairness to individuals, whose rights and obligations will not be subject to sudden change. It will also ensure that it will be up to the UK Parliament (and, where appropriate, the devolved legislatures) to amend, repeal or improve any piece of EU law at the appropriate time once the UK has left the EU.

This may be easier said than done. There are thousands of EU legislative acts in force in the UK. Questions remain as to how the government intends to deal with the decisions of the Court of Justice of the European Union (“CJEU”). The White Paper suggests that previous decisions of the CJEU will continue to be binding despite the fact that section 3 of the ECA (which gives CJEU decisions this effect) will have been repealed, the rationale being to provide certainty and continuity at the point of departure from the EU. The government cites the calculation of holiday pay entitlements for UK workers as an example of the need to provide stability, whilst at the same time stating that it does not wish to “fossilise” past CJEU decisions. It proposes that upon departure of the EU, UK courts will no longer be bound by future CJEU decisions. The White Paper does not consider the status of CJEU decisions post-Brexit on EU law which was applicable to the UK pre-Brexit.

Secondary legislation

According to the government, the creation of powers to create secondary legislation will enable corrections to be made to the laws that would otherwise no longer operate or make sense after Brexit. It will also enable domestic law post-Brexit to reflect the content of any withdrawal agreement under Article 50. These powers have been nicknamed the “Henry VIII powers” as there are concerns that they will allow the government sweeping powers to legislate without parliamentary scrutiny.

Devolution

It seems likely that complexities will arise regarding the repatriation of powers from the EU in relation to those areas of EU law where the Scottish, Welsh and Northern Irish governments have competence, for example agriculture, environment and transport. The UK government has made no guarantee that such powers will be transferred to the devolved governments post-Brexit and it appears that the UK government intends to replicate the current frameworks provided by EU rules through UK legislation.

Consequences for businesses

In the White Paper the government strives to emphasise that there will be no sudden changes and that as Brexit unfolds the Great Repeal Bill will provide clarity and continuity. However it is clear that there remains a large degree of uncertainty, particularly in relation to the current political climate. Businesses should ensure that they are aware of all developments as negotiations evolve so that they are well placed to make appropriate decisions as the UK leaves the EU.

Contact: Jeremy Glen, Partner jsg@bto.co.uk T: 0141 221 8012.