36: Great Repeal Bill – They call it stormy Monday

David Mundy Partner & Parliamentary Agent

Aaron Nelson Legal Director

After a few (relatively) quiet weeks, Brexit has blown back on to the front pages.

The UK and the EU27 have moved to the Phase 2 of the Brexit negotiations, setting out what the ‘transition period’ will look like – and that got a chilly reception from hard Brexiteers. At Westminster, the Bill’s Second reading took place in the Lords (30 and 31 January), preceded by a flurry of new reports. And, of course, some (rather downbeat) forecasts of the economic effects of Brexit have been leaked from the Cabinet Office.

Backbench disquiet

Last weekend saw a marked increase in ‘Brexit turbulence’ on the Tory backbenches, prompted (in part) by the open letter to business leaders published by HM Treasury, DExEU and BEIS on 26 January.

That letter set out that, during the implementation period (which the PM requested in her Florence speech),

‘the UK’s and the EU’s access to one another’s markets should continue on current terms, meaning there will only be one set of changes at the end of the implementation period, as we move into our future partnership’.

The letter emphasises three key aspects of the implementation period:

the UK will remain subject to the EU’s existing rules and regulations (including, although the letter does not expressly say so, the jurisdiction of the Court of Justice);
across the full breadth of existing arrangements (all sectors) and all international agreements, including free trade agreements, to which the UK is currently a party by virtue of our EU membership; and
EU citizens will continue to be able to come and live and work in the UK, with no new barriers to taking up employment.

The Government’s policy was immediately attacked by Brexiteers, chiefly Jacob Rees-Mogg (head of the hard-Brexit favouring European Research Group of Tory backbenchers). Grilling David Davis during his appearance at the Brexit select committee, he suggested the UK would be a ‘vassal state’ during the two-year implementation phase.

Rees-Mogg has positioned himself, and the ERG, as the protectors of the PM and the official Tory policy on Brexit, ie leaving the EU means leaving the customs union and the single market, from suggestions of a softer Brexit, emanating from within Cabinet (chiefly Philip Hammond) such as that the UK could enter a (new) customs union with the EU27 or seek ‘ongoing regulatory alignment’.

UK says implementation, EU says transition

On Monday (29 January), the EU27 Council adopted the negotiating directives for what the Commission prefers to call the ‘transition’ period. The headlines are:

transitional arrangements must be clearly defined and precisely limited in time. The proposed end date is 31 December 2020;
all EU rules and regulations – as well as EU rule changes adopted after March 2019 – should apply in the UK during the transition phase (subject to the UK’s existing opt out re freedom, security and justice);
there can be no ‘cherry picking’ on the single market – so free movement into the UK should continue;
the UK will not be involved in the decision-making of EU bodies but, exceptionally, may be invited to attend without voting rights;
the UK can negotiate, but cannot implement, its own international agreements; and
work should continue on finding a solution to the Northern Ireland border question, one of the main sticking points in the first round of negotiations.

The main points of difference are over free movement and new EU laws introduced during this period. On the former, the PM said (while on her way to China):

‘People who had come to the UK when we were a member of the EU had set up certain expectations – they made a life choice and set up certain expectation. I‘m clear there’s a difference between those people who came prior to us leaving and those who will come when they know the UK is no longer a member of the EU.’

It is hard to see how that is consistent with the open letter to business published just days earlier.

On the latter, the SSExEU wants the UK to have a ‘right to object’ to new laws:

‘It’s not particularly democratic practice to just have the country accept without any say-so, anything – particularly if… the European Union takes it on itself to do something which is actively disadvantageous to a major British industry or something like that… So that’s why we’ve raised the matter, and let’s see how it goes.’

But note, too, the brevity of the implementation/transition period: EU officials have long suggested that less than two years is insufficient to agree the ‘bespoke deep and special relationship’ which the UK wants (but can’t define, at least publicly), and that the implementation/transition period will, inevitably, be extended past 31 December 2020.

That has led some Brexiteers to accuse UK Remainers of colluding with the EU to try to morph the ‘transition state’ into a more permanent ‘holding pattern’ – and the template for the UK’s new, long-term position.

It’s stormy weather on all fronts, then, for the Government…