Explanatory Notes

Financial implications of the Bill

288 The only provisions of the European Union (Withdrawal) Bill that have immediate financial implications are clause 13 and Schedule 5. However, exercise of the delegated powers contained in the Bill are likely to result in associated expenditure being incurred. Indeed, the powers in clauses 7 to 9 and Schedule 2 all contain the power to make any provision that can be made by an Act of Parliament, so the potential for provision to be made that involves expenditure is significant.

289 For example, the power in clause 7 enables the transfer of functions from an EU body to a UK body. In order for that UK body to be sufficiently prepared to assume these functions on exit day, preparatory spending could be necessary. There could then be significant ongoing expenditure connected with the exercise of the functions.

290 The way in which these powers in the Bill will be used will depend on the outcome of negotiations with the European Union and on policy decisions yet to be taken, meaning it is not possible at this stage to provide an estimate of the amount which may need to be issued out of either the Consolidated Fund or the National Loans Fund. However, the explanatory memorandum accompanying each statutory instrument made by a minister of the Crown under a power in this Bill will include details of the financial implications of the instrument, providing ongoing transparency of the financial implications of the use of the powers in the Bill.

291 Typically, it is entirely proper for persons and bodies affected by an Act to incur all expenditure necessary to prepare for the coming into force of the Act from Royal Assent. However, in certain limited cases, for example, where a body will be established by secondary legislation made under an Act, it may not be proper for departments to incur certain types of expenditure before the making of the relevant secondary legislation. To ensure that preparatory expenditure can be properly incurred in cases such as these, clause 12 states that a minister of the Crown, government department or relevant devolved authority may incur expenditure for the purposes of, or in connection with, preparing for anything that may be done under exercise of the delegated powers in the Bill, before such provision is made. This ensures that all necessary preparatory expenditure can be properly incurred from Royal Assent.

292 Expenditure incurred by ministers of the Crown, government departments and other public authorities will be funded out of money provided by Parliament. The Bill also provides that where provisions in the Bill result in an increase in the sums payable under other legislation out of money provided by Parliament, those sums will also be funded by Parliament. Spending on the part of the devolved authorities will require budget from their respective legislature.

293 Additionally, Schedule 4 provides ministers with the power to impose fees or charges where public authorities are taking on functions previously exercised by the EU. The way in which departments will use this power will not be known until negotiations are further progressed and policy decisions are taken about where EU functions are vested. It is therefore not possible to estimate any sums associated with charging in connection with these functions. This power is capable of being used to confer a power on public authorities to create their own fees and charges schemes. Some public authorities already have this ability in connection with their existing domestic functions, for example the Financial Conduct Authority and the Prudential Regulation Authority. The procedural requirements that are set out in the regulations conferring that power would allow it to be used in a restricted way. The minister's regulations conferring such a power on a public authority would themselves be subject to Treasury consent and the affirmative procedure.

294 The devolved administrations can also use this power in accordance with their own procedures for managing public money.


Prepared 13th July 2017