Takeaways

UK law will need to replicate up to 19,000 EU rules and regulations and as many as 34 EU regulatory agencies.

It’s likely that the UK will seek continued participation in EU agencies, at least for a transition period, putting pressure on May to secure a negotiated withdrawal agreement rather than a hard Brexit.

Yesterday Prime Minister May gave “notice to quit” under Article 50 and started what, by any measure, will be difficult and protracted divorce proceedings. “Brexit Day” will be 29 March 2019 unless an extension is agreed by the EU27 and the European Parliament. Today, Mrs May published a White Paper setting out her government’s plans for a great repeal bill.

Although the idea of a great repeal bill (GRB), which at one strike will remove the UK from the purview of the European Court of Justice (CJEU) and restore the supremacy of domestic law, sounds tantalisingly simple, the reality is very different. The GRB will usher in a very significant, complex and challenging programme of legislation which will require some 10 to 15 new bills, not to mention the secondary legislation that will be needed before the Article 50 process is complete, across a wide range of areas such as tax, immigration, water quality and the environment.

Some sectors, such as agriculture, will be particularly affected, with George Eustice, Minister for Agriculture, Fisheries and Food, on record as saying that “Defra [the Department for Environment, Food and Rural Affairs] is the domestic department most affected by EU exit, with some 80 percent of our work framed by EU legislation”. The financial services, chemicals, pharmaceuticals, transportation and aviation sectors, which are all heavily regulated, will also face significant impact and disruption over the next few years. Other heavily regulated industries which can expect to be affected include electricity and gas trading, broadcasting and communications.

What is the Great Repeal Bill?

On 2 October last year the Prime Minister announced that Article 50 would be triggered by the end of the March and that the Queen’s Speech would include a Great Repeal Bill. Currently, the European Communities Act 1972 (ECA72) enshrines the supremacy of EU law in national law. That will come to an end on Brexit day. EU law will no longer be applicable in the UK, references from UK courts to the CJEU to answer questions of EU law will end, and decisions of the CJEU will no longer be binding. Acts of Parliament will cease to be subject to being struck down for failing to comply with EU law.

The GRB will have two other functions:

  • it will to provide “legal certainty and continuity” by transferring EU laws and regulations onto the UK statute book; and
  • it will give the government delegated powers to amend laws ‘that would not otherwise function sensibly once we have left the EU’—or which, in other words, would be ‘inoperable’.

Sounds straightforward?

Not so. There are literally thousands of EU regulations which—through the device of direct applicability—are part of UK law even though they have never been enacted here. It will be almost impossible to know how all these laws affect British businesses.

Back in November last year, the House of Commons Library published a briefing paper entitled Legislating for Brexit: the Great Repeal Bill, which suggests that up to 19,000 EU rules and regulations may need to be imported into the British statute book. More recently, the Institute for Government (IFG), a think tank, which has published a report on the GRB and the wider legislative challenge states:

Making a success of Brexit will require a large volume of legislation to be passed through Parliament against a hard deadline. Meeting that requirement while still ensuring adequate scrutiny and leaving room for the Government’s domestic policy agenda will require both government and Parliament to adapt their normal approach to making legislation, and to recognise the value and importance of the other’s objectives and role.”

And according to estimates from the Confederation of British Industry, the UK may need to set up domestic versions of as many as 34 EU regulatory agencies after Brexit Day.

With the historic Article 50 notice served, the phoney war is at an end. The UK and the EU27 have entered a key period—the outcome of which will have a huge impact on businesses and individuals alike.

Tim Wright, Pillsbury

What is required?

The IFG report lists out the key legislative tasks which will be needed before Brexit Day. In addition to repealing ECA72, the IFG suggests:

  • introducing ‘saving provisions’ so that secondary legislation made under ECA72 continues to have affected even after ECA72 is repealed;
  • transposing EU regulations (which currently have direct affect) into UK law so that they continue after ECA72 is repealed;
  • introducing clarifying provisions so that it is clear how transposed laws which rely on or refer to EU institutions and mechanisms will operate;
  • making changes to current UK law to ensure that it still operates after Brexit Day, such as replacing references to the European Commission with UK bodies or ministers;
  • enacting statutory powers (so-called Henry VIII powers) which will allow ministers to make amendments to primary and secondary legislation without needing primary legislation to be passed;
  • introducing (in time for Brexit Day) new laws to establish domestic policies in areas previously under EU competence, such as customs and immigration; and
  • clarifying what status UK courts should accord to previous and future CJEU rulings.

Hard road ahead

As the IFG report notes,

“[t]he scale of Brexit legislation will have implications for the rest of the Government’s legislative programme. Some estimates put the range of new bills required between 10 and 15. Most Queen’s Speeches announce around 20 new pieces of legislation, reflecting the drafting capacity of Parliamentary Counsel and the parliamentary time available to pass primary legislation in a normal session.  That means there will be a very significant reduction in space for non-Brexit-related legislation in both the 2017 and 2018 sessions. This will place a bigger burden on the normal prioritisation processes around the legislative programme, and should mean that departments will have to seek out non-legislative routes where possible to achieve their objective.”

With officials reportedly acknowledging that the government doesn’t “have the expertise in some areas and wouldn’t have the time to start up new agencies from scratch,” it is likely that the UK will seek continued participation in EU agencies—at the very least for a transition period. This in turn will put pressure on the Prime Minister to secure a negotiated withdrawal agreement rather than a hard Brexit.

Watching brief

As businesses are developing their Brexit plans, they need to keep a watching brief over the many changes to law and regulation which the GRB will inevitably trigger.