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The European Union (Withdrawal) Bill is published: a focus on delegated powers

Andrew Sheftel
July 14, 2017

Posted in UK and EU legal framework

The Government has published its widely-publicised Repeal Bill, now titled the European Union (Withdrawal) Bill,  to address the impact of Brexit EU-derived laws in the UK. 

As had been trailed in the Government’s earlier White Paper, the Bill’s aims are:

  • to repeal the European Communities Act 1972 (ECA);
  • to preserve EU law where it stands at the moment before the UK leaves the EU; and
  • enable changes to be made by secondary legislation to those laws that would otherwise not function sensibly after Brexit.

Assuming it eventually becomes law, the Bill, which runs to some 66 pages, makes explicit that the ECA will be repealed on the date the UK leaves the EU (section 2). It also makes clear that on that date all EU-derived law will be converted to UK domestic law. According to section 3 of the Bill, all direct EU legislation so far as operative immediately before the UK’s exit from the EU, forms part of domestic law on and after exit day.

In our previous blog post following the publication of the White Paper, several areas of uncertainty were identified which businesses would be keen to see resolved. 

We will be examining these and others in a series of blog posts over the coming days, starting below with the issue concerning the proposed use of delegated powers to amend or repeal EU-derived legislation.

Use of delegated powers to amend EU-derived legislation

One of the key concerns raised in advance of publication of the Bill was the Government’s proposal to use secondary legislation to make changes to EU-derived laws which would not function sensibly after Brexit. 

In particular, fears were raised as to the extent to which Henry VIII powers (i.e. powers which enable primary legislation to be amended by statutory instruments without full parliamentary process) could be used to make substantive changes to EU-derived laws which have been incorporated into domestic law.

The crucial provision in the Bill is section 7. This would give Ministers wide powers to make regulations to prevent, remedy or mitigate (a) any failure of retained EU law to operate effectively, or (b) any other deficiency in retained EU law, arising from the UK’s withdrawal from the EU.

Pursuant to section 7(2), ‘deficiencies’ are defined as when the Minister considers that the retained EU law:

(a) contains anything which has no practical application in relation to the UK or any part of it or is otherwise redundant or substantially redundant;

(b) confers functions on, or in relation to, EU entities which no longer have functions in that respect under EU law in relation to the UK;

(c) makes provision for, or in connection with, reciprocal arrangements  between the UK and the EU which no longer exist or are no longer appropriate;

(d) makes provision for, or in connection with, other arrangements which involve the EU or member state, or are dependent on the UK’s membership of the EU;

(e) makes provision for, or in connection with, any reciprocal or other arrangements not falling within paragraph (c) or (d) which no longer exist, or are no longer appropriate, as a result of the United Kingdom ceasing to be a party to any of the EU Treaties;

(f) does not contain any functions or restrictions which were in an EU directive and in force immediately before exit day and it is appropriate to retain; or

(g) contains EU references which are no longer appropriate.

The provisions above relating to reciprocal arrangements are significant. There  are numerous EU laws which rely on reciprocity as noted in our earlier blog post. Section 7(4) of the Bill as drafted provides that Regulations under this section may make any provision that could be made by an Act of Parliament. This suggests that the Bill would give power for provisions relating to reciprocal arrangements to be repealed by the Minister if the Government is unable to reach agreement with the EU on their continued application or if he determines that they are no longer appropriate. Such provisions potentially cover a wide range of EU-derived laws.

More generally, critics of the Government’s proposals may be alarmed that the framework for when the powers may be used as set out in section 7(2)  contains a subjective element –  it is the Minster’s view as to whether EU-derived legislation is deficient which is determinative. 

However, this is mitigated by Schedule 7 of the Bill which provides for procedures for scrutiny of the exercise of the delegated powers contained in section 7. Schedule 7 provides that regulations made by ministers under the powers contained in the Bill will require approval by resolution of each House of Parliament in certain limited circumstances, such as where the new laws: establish a public authority in the UK; create or widen the scope of a criminal offence; or create the power to make further (delegated) legislation. 

In all other cases, regulations may be made without prior parliamentary approval, albeit  they could later be annulled by resolution of either House 

Additional provisions in Schedule 7 provide for scrutiny in instances where Ministers are acting jointly with devolved authorities. There are also provisions to relax scrutiny requirements in cases of urgency.

Further, section 7(6) provides that Ministers acting under the powers conferred by section 7 may not make regulations which:

  • impose or increase taxation;
  • make retrospective provision;
  • create a relevant criminal offences – although having regard to the definition of ‘relevant criminal offence’ in section 14 of the Bill, Ministers will be able to pass delegated legislation to create a criminal offence with a maximum prison term of up to two years, albeit only with Parliamentary approval in accordance with Schedule 7;
  • amend the Human Rights Act 1998 or Northern Ireland Act 1998.

There is also a sunset provision whereby regulations under the delegated powers cannot be made after a period of two years from the date of the UK’s departure from the EU.

Under section 8 of the Bill, Ministers will have powers to make regulations to prevent any breach of the UK’s international obligations – although again with certain restrictions including a two-year sunset clause.

The Bill is not due to be debated until the autumn.

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