56: Brexit progress: More heat than light?

Aaron Nelson Legal Director

It has been difficult, in recent weeks, to ascertain just how much progress is being made on Brexit. There’s been a lot of heat but, at times, not much light.

Politics, politics

The UK and the EU continue to negotiate the withdrawal agreement, but it is difficult to ascertain from the media headlines whether we are any closer to a deal. The Northern Ireland border continues to be a problem, with the EU apparently now suggesting that a compromise can be found in the sort of ‘away from the border’ checks which it had previously rejected as inadequate – the Prime Minister (with the DUP providing her working majority) rejects that as an unacceptable dilution of the constitutional integrity of the UK.

The withdrawal agreement needs to be concluded to enable the EU to move on to discuss the UK’s proposal for a future relationship and, on that, the divisions within the Tory party over Brexit have dominated the news. The Prime Minister, SSExEu Dominic Raab and the rest of the cabinet have, more or less, stayed on message that the Chequers plan (discussed here) is the best way forward – notwithstanding indications that the EU regard it as ‘unworkable’. The ERG, now bolstered by ex-SSExEU David Davis and ex-Foreign Secretary Boris Johnson, have rejected it, and put forward an alternative plan – although that was perhaps not as comprehensive an alternative as they were planning.

Meanwhile, Labour’s leadership is at odds with itself and with the membership over its handing of Brexit and whether to support a ‘People’s Vote’.

The divisions within the political parties could make for an interesting conference season, but may well prevent the government from making any meaningful compromises (and so breakthroughs) in the negotiations with the EU until after conference season.

More Brexit legislation

More substantive progress can be seen in Parliament, as Brexit legislation continues to appear and progress.

First, the Customs Bill received Royal Assent on 13 September, and is now the Taxation (Cross-border Trade) Act 2018.

As we explained here, the Customs Bill is required to provide the UK with a coherent customs regime after Brexit, whatever the outcome of negotiations with the EU. It provides a framework of powers to enable Ministers to establish a new regime including:

customs duties: It replicates the EU’s common external tariffs and declaration procedures registered with the World Trade Organisation, and provides a codified customs law (the Union Customs Code) – this element could be dropped/amended as part of any UK/EU trade agreement;
trade defence measures, to be administered by a new Trade Remedies Authority;
excise duties, ie the power to impose tariffs on certain categories of goods being exported from the UK (eg alcohol and tobacco); and
establishing a new VAT regime.

It also gives the government considerable powers to use secondary legislation (including a number of ‘Henry VIII powers’). As a money bill, the Bill could not be amended by the Lords, and so its Parliamentary passage was less troubled than that of other Brexit legislation.

Second, the Trade Bill, meanwhile, has passed its Commons stages and moved to the House of Lords. It had its Second Reading on 11 September and is now at the Committee stage from a date to be announced (but after conference season).

Third, the Agriculture Bill was introduced in the Commons on 12 September. This would provide the legal framework for the UK to leave the Common Agricultural Policy and establish a new system for the next generation of farmers and land managers. The Bill includes:

powers to give financial assistance and move towards a new system based on paying public money for public goods, including environmental protection, public access to the countryside and measures to reduce flooding;
the ability to establish an enforcement and inspection regime; and
powers for the Secretary of State to make regulations imposing obligations on first purchasers of agricultural products in relation to contracts with producers, aimed at protecting producers and consumers from unfair trading practices.

Fourth, SIs made under EUWA have started to appear, and the European Statutory Instruments Committee has published its first two reports. You will recall that the Committee was established because of concerns (much discussed in this blog) that the powers to make SIs granted by EUWA to Ministers (often referred to as ‘Henry VIII powers’) were too wide ranging and would enable ministers to change the law without effective Parliamentary scrutiny. The Committee has been appointed by the House of Commons (under EUWA) to examine the SIs and report whether they may proceed by the negative procedure, or if the affirmative procedure is required.

At its meetings on 5 and 12 September 2018, the Committee considered 28 proposed negative instruments laid by the Government and recommended that, for 5 of them, the affirmative procedure should be used instead. These were:

The European Research Infrastructure Consortium (Amendment) (EU Exit) Regulations 2018 – because ‘further explanation is necessary on how the ERIC Regulation, as it forms part of retained EU law, will facilitate UK membership as a non-EU Member State in these consortia after the UK has left the EU … [and] future UK participation as a third country will inevitably mean that the policy functions in a different context’ and ‘there is a continued, albeit limited, role for the European Court of Justice in adjudicating on the granting of ERIC status and assessing compliance with the rules of ERIC itself … [which] is an area the House may wish to explore further.’
The Flags (Northern Ireland) (Amendment) (EU Exit) Regulations 2018 – because while ‘as a matter of policy there is nothing contentious in the amendments proposed by this instrument, [which] … make only the obvious and necessary consequential changes to reflect Brexit… given the political sensitivity, the House would wish to have the opportunity of satisfying itself of that fact through affirmative resolution scrutiny and debate.’
The Postal and Parcel Services (Amendment etc.) (EU Exit) Regulations 2018 – because ‘the Government should provide further information on the effect of the UK’s non-participation in [European Regulators Group for Postal Services], and possible alternatives for future arrangements, recognising that the UK will maintain an interest in an effective postal and parcel service between the UK and the EU after it ceases to be a Member State …’
The Trade Barriers (Revocation) (EU Exit) Regulations 2018 – because ‘Members will want to scrutinise the transition to resolution of trade barriers through non-statutory provisions further and that the issues raised are of sufficient political sensitivity and commercial and economic importance to warrant debate.’
The Cat and Dog Fur (Control of Import, Export and Placing on the Market) (EU Exit) Regulations 2018 – because the effect of ‘transferring power to make regulations in this area, from the Commission to the Secretary of State, constitutes the creation or amendment of a power to legislate, which would make it mandatory for these Regulations to be subject to the draft affirmative resolution procedure as set out in Paragraph 1(2) of Schedule 7 to the European Union (Withdrawal) Act 2018.’

If the Committee continues at its current rate of recommending affirmative resolutions for approximately 18% of the estimated 800 to 1000 SIs to come forward under EUWA, then Parliament would have to find time to debate 140 to 180 SIs.