Explanatory Notes

Clause 7: Dealing with deficiencies arising from withdrawal

110 Clause 7 gives ministers of the Crown a power to make secondary legislation to deal with problems that would arise on exit in retained EU law. This includes the law which is preserved and converted by clauses 2 to 5 (i.e. both domestic law and directly applicable EU law). These problems, or deficiencies, must arise from the UK’s withdrawal from the EU (which includes the consequence that the UK will cease to participate in the EEA Agreement). The law is not deficient merely because a minister considers that EU law was flawed prior to exit. A minister is able to take action before exit in order to prevent the deficiency from arising. For the purposes of clause 7, a failure of retained EU law is a type of deficiency: a failure means the law doesn’t operate effectively whereas deficiency covers a wider range of cases where it does not function appropriately or sensibly.

111 Subsection (2) explains the sorts of deficiencies that the power might need to deal with. These may include:

provisions that have no practical application after the UK has left the EU;

provisions on functions that are currently being carried out in the EU on the UK’s behalf, for example by an EU agency;

provisions on reciprocal arrangements or rights between the UK and other EU member states that are no longer in place or are no longer appropriate;

any other arrangements or rights, including through EU treaties, that are no longer in place or no longer appropriate;

EU references that are no longer appropriate.

There are illustrative examples of possible deficiencies and corrections in the Government White Paper Legislating for the United Kingdom’s Withdrawal from the European Union (pages 20 - 21) and a further example in the policy background section of these notes.

112 Subsection (2) also provides that if a function or restriction is contained in a directive and therefore not retained, and has not been transposed into domestic law, this can be a deficiency. For example, if the UK has implemented a directive but has not implemented the provisions in the directive which provide for the Commission or EU agency to carry out a function, the absence of this function in retained EU law could be a deficiency in the implementing legislation after the UK leaves the EU. The power could be used to recreate the function. The list in subsection (2) is not exhaustive.

113 Subsection (3) provides that the retained EU law in the UK is not deficient just because the EU subsequently makes changes to the law in the EU after the UK has left, or planned changes come into effect after exit. The law is being preserved and converted as it was immediately before exit day. The EU might go on to make changes to its law but those subsequent changes and the consequent divergence between UK and EU law do not by themselves automatically make the UK law deficient.

114 Subsection (4) provides that secondary legislation made under the power in this clause can do anything an Act of Parliament might to deal with deficiencies. This could include altering Acts of Parliament where appropriate and sub-delegating the power to a public authority where they are best placed to deal with the deficiencies. However, the power is subject to the restrictions set out in subsection (6). For example, the power cannot be used to impose or increase taxation, to make retrospective provision, or for the purposes of implementing the withdrawal agreement (separate provision is made for implementation of the withdrawal agreement in clause 9).

115 Subsection (5) provides, non-exhaustively, for what the secondary legislation made under this power can do. For example, it can transfer the functions of EU authorities to UK public authorities or create new UK public authorities to take on those functions. These functions might include the ability to set rules or create standards, which are currently made by the EU as non-legislative acts (delegated and implementing acts). The power can be used to repeal, amend or replace parts of the retained law. There will be other uses of the power necessary to correct deficiencies. The power could be used to amend law which is not retained EU law where that is an appropriate way of dealing with a deficiency in retained EU law.

116 Subsection (7) makes clear that the temporary power in this clause can only be used for up to two years after exit day, as it expires at that point. Paragraph 28 of Schedule 8 provides that it is the power and not the regulations which expires.

117 Subsection (8) provides that the meaning of deficiency can cover a deficiency that arises out of withdrawal taken together with the operation of, or interaction between, provisions of the Bill or provisions made under the Bill.

118 The parliamentary scrutiny procedures for this power are set out in Part 1 of Schedule 7.


Prepared 13th July 2017