Policy background

3 On 1 January 1973 the UK joined the European Economic Community, which has since evolved to become today’s European Union. A condition of EU membership is that community law, which is now EU law, be given effect in domestic law. The ECA is the principal piece of domestic legislation passed by the UK Parliament that gives effect to EU law in the UK, and gives EU law supremacy over UK domestic law.

4 On 23 January 2013 the then Prime Minister announced his intention to negotiate a new settlement on the terms of the UK’s membership of the EU, followed by a pledge to subsequently hold an in-out referendum on the UK’s membership of the EU.

5 On 17 December 2015 the European Union Referendum Act 2015 received Royal Assent. The Act made provision for holding a referendum in the UK and Gibraltar on whether the UK should remain a member of the EU. The referendum was then held on 23 June 2016 and resulted in a 52% vote to leave the European Union.

6 The European Union (Notification of Withdrawal) Act 2017 was passed into law on 16 March. This gave the Prime Minister the power to notify the European Council of the UK’s intention to withdraw from the European Union under Article 50(2) of the Treaty on European Union. This notification was then given on 29 March 2017. At the same time, the UK notified its withdrawal from the European Atomic Energy Community (‘Euratom’), in accordance with the same Article 50(2) as applied by Article 106a of the Treaty Establishing the European Atomic Energy Community.

7 Withdrawing from the EU means the UK will also cease to participate in the European Economic Area (EEA) Agreement as the UK will fall outside the geographic scope of the Agreement and will therefore no longer be a member of the EEA.

8 On 2 February 2017 the Government published a White Paper entitled The United Kingdom’s exit from and new partnership with the European Union White Paper (Cm 9417) which set out the Government’s vision of what it is seeking to achieve in negotiating the exit from, and new partnership with, the European Union. It set out the twelve principles guiding how the Government will approach the negotiations on the UK’s withdrawal from the EU.

9 The Government then published a White Paper on the 30 March 2017 entitled Legislating for the United Kingdom’s withdrawal from the European Union (Cm 9446). The White Paper set out the approach to the European Union (Withdrawal) Bill and how the domestic legal system will work once the UK leaves the EU.

Approach of the European Union (Withdrawal) Bill

10 The principal purpose of the Bill is to provide a functioning statute book on the day the UK leaves the EU. As a general rule, the same rules and laws will apply on the day after exit as on the day before. It will then be for Parliament and, where appropriate, the devolved legislatures to make any future changes.

11 The Bill performs four main functions. It:

○ repeals the ECA;

○ converts EU law as it stands at the moment of exit into domestic law before the UK leaves the EU;

○ creates powers to make secondary legislation, including temporary powers to enable corrections to be made to the laws that would otherwise no longer operate appropriately once the UK has left the EU and to implement a withdrawal agreement; and

○ maintains the current scope of devolved decision making powers in areas currently governed by EU law.

12 In determining this approach, the Government considered whether there were alternative viable legislative models available to deliver the changes required to ensure a functioning statute book on exit from the EU. These included using a single Bill to repeal the ECA and setting out in schedules the necessary consequential changes required to ensure a functioning statute book. However, given that the two year time period to conclude negotiations provided for by Article 50 will be running in parallel with this legislation, there may not be time to make all the necessary legislative changes in a single piece of legislation (as in some cases the content of that legislation could not be known until after the negotiations had concluded).

13 For that reason, the approach of taking delegated powers to make the necessary changes by secondary legislation was agreed by the Government as being the only appropriate solution. This was acknowledged by the Lords Constitution Committee in its report into The ‘Great Repeal Bill’ and delegated powers :

"The degree of uncertainty as to what exactly the process of converting EU law into UK law will involve-and, in particular, the need to take account of
the UK’s ongoing Article 50 negotiations with the EU-will almost certainly
necessitate granting the Government relatively wide delegated powers under the
‘Great Repeal Bill’, both to amend existing EU law in preparation for the day of
Brexit and to legislate for new arrangements following Brexit where necessary."1

14 The Bill does not aim to make major changes to policy or establish new legal frameworks in the UK beyond those which are necessary to ensure the law continues to function properly from day one. The Government will introduce separate primary legislation to make such policy changes which will establish new legal frameworks.

Repeal of the European Communities Act 1972

15 The UK is a 'dualist' state, meaning that a treaty ratified by the Government does not alter the laws of the state unless and until it is incorporated into domestic law by legislation. This means that the UK Parliament has to pass legislation before the rights and obligations in the treaty can have effect domestically.2

16 The ECA effectively confirmed the UK’s membership of the European Economic Community (as then was) and gave EU law supremacy over UK domestic law. Without it, EU law could not become part of national law. The legal background section of these notes provides a detailed explanation of how EU law currently operates in the UK legal system.

17 The two main provisions in the ECA are:

○ Section 2(1), which ensures that rights and obligations in some types of EU law, such as the EU treaties and regulations, are directly applicable in the UK legal system. This means that they apply directly without the need for the UK Parliament to pass specific domestic implementing legislation.

○ By contrast, section 2(2) provides a delegated power to allow for the implementation of EU obligations, for example obligations in directives, by way of secondary legislation (through statutory instrument).3

(The relationship between EU law and UK law is subject to the principle of supremacy - see paragraph 53)

18 The European Union (Withdrawal) Bill repeals the ECA on the day the UK leaves the EU. This will have the effect of removing the mechanism for the automatic flow of EU law into UK law (through section 2(1) of the ECA) and removing the power to implement EU obligations (under section 2(2) ECA). This reflects the fact that the UK will no longer be a member of the EU and will therefore cease to have obligations under EU law.

Preserving and converting EU law

19 By only repealing the ECA, some EU law that currently applies in UK law by virtue of the ECA would cease to have effect. As outlined by the Supreme Court in Miller 4, the ECA is not itself an originating source of EU law, but is rather the ‘conduit pipe’ through which EU law flows into UK domestic law.

20 As set out in paragraph 17 of these notes, section 2(1) ECA provides that directly applicable law (such as EU regulations) has effect in UK law without the need to pass specific UK implementing legislation. If the ECA were repealed and no further action was taken, this directly applicable EU law would cease to apply in UK law, leaving gaps on the statute book.

21 Other types of EU law (such as EU directives) have to be given effect in the UK through domestic laws. As set out above, this has frequently been done using section 2(2) of the ECA, which provides ministers, including in the devolved administrations, with powers to make secondary legislation to implement EU obligations. If the ECA were repealed and no further action was taken, all of the secondary legislation which has been made under it would fall away and cease to be part of the UK statute book, leaving significant gaps.

22 To avoid such gaps, the Bill converts the body of existing EU law into domestic law and preserves5 the laws we have made in the UK to implement our EU obligations. After this, because the supremacy of EU law will have ended, Parliament (and, where appropriate, the devolved legislatures) will be able to decide which elements of that law to keep, amend or repeal once the UK has left the EU. This body of converted EU law and preserved domestic law is referred to in the Bill and these notes collectively as ‘retained EU law’.

23 This approach means that, as a general rule, the same rules and laws will apply on the day after the UK leaves the EU as before:

○ the Bill converts directly applicable EU law (e.g. EU regulations) into UK law;

○ it preserves all the laws which have been made in the UK to implement EU
obligations (e.g. in EU directives);

○ it incorporates any other rights which are available in domestic law by virtue of section 2(1) of the ECA, including the rights contained in the EU treaties, that can currently be relied on directly in national law without the need for specific implementing measures; and

○ the Bill provides that pre-exit case law of the Court of Justice of the European Union (CJEU) be given the same binding, or precedent, status in UK courts as decisions of the Supreme Court or the High Court of Justiciary in Scotland.

Delegated powers

24 A large amount of EU law currently applies in the UK by virtue of the ECA. A proportion of this will continue to operate properly once the UK leaves the EU simply by converting it into UK law. However, a significant proportion of retained EU law for which Government departments and devolved administrations are responsible contains some provisions that will not function effectively once the UK leaves the EU.

25 There are a variety of reasons why some areas of retained EU law will be unable to operate because the UK is no longer a member of the EU. There will also be cases where retained EU law will cease to operate as intended or will be redundant once the UK leaves the EU. For this reason, the Bill includes a power to enable ministers to correct problems arising from withdrawal by way of making regulations by statutory instruments. Some examples are in the text box below, while further examples can be found in the delegated powers memorandum which is published alongside the Bill. The memorandum sets out that UK ministers will need to publish explanatory memoranda alongside statutory instruments.

26 Similar issues also exist in legislation that is the responsibility of the devolved administrations, such as that made under the ECA. The Bill therefore also, where appropriate, gives devolved ministers a power to amend devolved legislation to correct any problems in their law, in line with the power held by UK ministers.

27 The power to correct problems arising from withdrawal is capable of transferring the functions of EU authorities to UK public authorities and of creating new UK public authorities to take on those functions. These powers will be available from Royal Assent for two years after exit day.

28 To enable UK public authorities to exercise inherited EU functions effectively, the Bill also contains powers enabling the UK authority to charge fees for services that have been transferred from the EU to an authority in the UK or otherwise created as a result of the UK leaving the EU. This could include a fee for issuing a licence or approving a product. The Bill also provides for modification of existing fees or charges which were created pre-exit using powers in the ECA or the Finance Act 1973 .

29 The Bill enables the UK to continue to comply with its international obligations by giving a power to make regulations that remedy any unintended breaches of international obligations arising from withdrawal from the EU.

30 Finally, the Bill provides the Government with a limited power to implement the contents of a withdrawal agreement reached with the EU into UK law in preparation for that agreement coming into force on the day the UK leaves the EU. This is a separate process from that by which the Government will bring forward a motion on the final agreement to be voted on by both Houses of Parliament before it is concluded. This power will expire on exit day and is therefore restricted to implementation of things required for day one. For example, if there was relevant provision in the withdrawal agreement, the power could be used to clarify the situation in relation to UK cases at the CJEU that started before exit but were not yet concluded by exit day, or regulatory approvals for UK products that were pending at the point of exit.

31 The powers outlined in paragraphs 28 to 30 of these notes are also available to the devolved administrations, subject to the detailed provisions set out in the commentary below. The Government can use these powers to amend domestic legislation in devolved areas, as well as retained directly applicable EU law which relates to areas that are otherwise devolved. The Government will not use these powers to amend such legislation without first consulting the relevant devolved administration(s).

32 Further delegated powers contained in the Bill are set out in the commentary on provisions of the Bill section of these notes.

Devolution

33 The current devolution settlements were agreed after the UK became a member of what is now the EU and reflect that context. In areas where powers have been devolved, each of the current settlements specifies that the relevant devolved institution cannot legislate or otherwise act in a way that is incompatible with EU law.

34 The Bill amends each of the devolution statutes (the Scotland Act 1998 , the Northern Ireland Act 1998 , and the Government of Wales Act 2006 ) so as to maintain the current parameters of devolved competence as regards retained EU law. This is intended to be a transitional arrangement while decisions are taken on where common policy approaches are or are not needed. It provides that the devolved legislatures or administrations may only modify retained EU law to the extent that they had the competence to do so immediately before exit. This means that devolved institutions will still be able to act after exit as they could prior to exit in relation to retained EU law. For example, where they currently have discretion over how to implement an EU directive, after exit they will have the ability to modify retained EU law in ways that remain consistent with the underlying directive, rather than being constrained by their existing implementing legislation. By contrast, for example, devolved legislation which would amend or otherwise be incompatible with retained direct EU legislation (such as EU regulations) would, as now, remain outside competence.

35 The Bill provides exceptions to the limit on modifying retained EU law in order to allow the devolved administrations, where appropriate, to use the power to correct problems in domestic legislation within their devolved competence.

36 The Bill further provides a power to release areas from the limit on modifying retained EU law where it is agreed that a common approach established by EU law does not need to be maintained and can be changed. This power is exercisable by Order in Council and the Order must be approved by both Houses of Parliament and the relevant devolved legislature (i.e. the Scottish Parliament, the National Assembly for Wales, or the Northern Ireland Assembly). The UK Government hopes to rapidly identify, working closely with devolved administrations, areas that do not need a common framework and which could therefore be released from the transitional arrangement by this power. This process will be led by the First Secretary of State and supported by the relevant territorial Secretary of State and will begin immediately following the Bill’s introduction.

37 The procedure for lifting the limit adopts broadly the same approach taken by the powers for devolving responsibilities in the devolution statutes, for example, section 30 of the Scotland Act 1998. Although the power in this Bill operates in areas that are already otherwise devolved, it achieves a similar effect to the powers in those Acts. It is important that when providing for decision making responsibilities that were previously held at an EU level to now be held at a devolved level, this should be agreed by both the UK Parliament and the devolved legislature, which is reflected in this procedure.

38 The approach in the Bill allows for the UK Government to hold discussions with the devolved administrations to establish areas where a common approach is or is not required, to help determine where UK frameworks might need to be kept after exit.