European Union (Withdrawal) Bill Contents

3Implementing the withdrawal agreement

3.1 Clause 9 power to implement the withdrawal agreement

80.Clause 9 delegates powers to Ministers to bring forward secondary legislation in order to implement the withdrawal agreement. Clause 9(2) is particularly wide, including the provision that secondary legislation could modify the EU (Withdrawal) Bill itself once enacted. The term ‘modify’ is defined in Clause 14 to include amendment and repeal. The withdrawal agreement is defined in Clause 14 as an agreement, whether or not ratified, agreed with the European Union under Article 50(2) TEU; the Clause 9 power could therefore be used before the agreement is ratified. The power expires on “exit day” (as defined in Clause 14).

81.As the Government’s delegated powers memorandum points out, the “exact use of the power will of course depend on the contents of the withdrawal agreement”123 which will likely require changes to citizens’ rights, Irish border issues, dispute resolution and transitional arrangements. The Government argues that the breadth of the Clause 9 power is needed in order to be “sufficiently flexible”124 to give effect to whatever is in the final agreement.

82.Witnesses did not find the breadth of the Clause 9 power problematic, noting that the power will be limited to dealing only with our “final obligation to the EU to implement the deal by which we leave” and can only be exercised “at great speed, because we know the deal is not going to be known until the last minute.”125 However, reservations were expressed regarding the power to modify the Act itself, with Professor Ekins telling us that changes to such a “significant constitutional measure” as this Act should be made by primary legislation.126 We heard from Steve Baker that the decision to use secondary legislation to implement the agreement was due to considerations of time:

It is about the imperative to deliver by exit day, so it is a matter of being able to deliver the certainty that the statute book will be in the right shape by exit day.127

However, by using delegated legislation, the Government risks exposing the withdrawal agreement to challenge in the courts. In his note to the Committee, Sir Stephen Laws explained that the powers in the Act consequently need to be drawn widely to mitigate that risk:

Limiting the powers in the Bill in a way that would create extra opportunities for statutory instruments to be challenged in the courts would undermine the rule of law entitlement of those who are going to need to rely on the predictability of the new law to manage their affairs.128

83.It has also been argued that an Act of Parliament would be needed to give legal effect to the withdrawal agreement, given the fundamental changes in the law and legal rights that would result129 and as a means to prevent legal challenges to the agreement.130 We also heard from Dr O’Brien that citizens’ rights within the withdrawal agreement should be a “primary-law right” as, even though they would not be made inviolable, they could “at least be granted greater protection than being effected in secondary law.”131

84.The Prime Minister said in her Florence speech that the UK would “incorporate our agreement fully into UK law and make sure the UK courts can refer directly to it.”132 Ministers told us that the implementation period, which will also be agreed under Article 50,133 would be implemented by separate primary legislation134 and, when asked, did not rule out primary legislation to implement the entire withdrawal agreement.135 The Secretary of State has since confirmed that a Withdrawal Agreement and Implementation Bill will enshrine both the withdrawal agreement and the implementation period in UK law. He told the House that “this confirms that the major policies set out in the withdrawal agreement will be directly implemented into UK law by primary legislation, and not by secondary legislation under the [EU] Withdrawal Bill.” He added that the Bill is “expected to cover the contents of the Withdrawal Agreement, including issues such as an agreement on citizens’ rights, any financial settlement and the details of an implementation period agreed between both sides.”136 Although asked on three occasions subsequently whether this announcement meant that Clause 9 would be removed from the EU (Withdrawal) Bill, the Secretary of State did not provide an answer.137

85.We welcome the Government’s commitment to introduce a Withdrawal Agreement and Implementation Bill. However, if the Clause 9 powers remain in the European Union (Withdrawal) Bill then they could be used to implement parts of the withdrawal agreement by secondary legislation before the Withdrawal Agreement and Implementation Bill is considered by Parliament. The Government should now justify the purpose of Clause 9 given its announcement that there will be a separate Withdrawal Agreement and Implementation Bill.

3.2 Citizens’ rights

86.The Secretary of State told the House in October 2017 that the negotiations had “explored ways in which we can fully implement the withdrawal treaty into UK law, giving confidence to European citizens living in the UK that they will be able to directly enforce their rights, as set out in the agreement, in UK courts.”138 This was something he had previously referred to as “direct effect if you like.”139 The Government’s Technical Note on Implementing the Withdrawal Agreement explains that the EU Treaties are “unique in requiring parties to implement them by incorporating the concept of direct effect into their domestic legal orders” which was achieved in the UK through Clause 2(1) of the ECA.140 It also contends that that “it would be inapt to require the UK to maintain [direct effect] in its domestic law when it is no longer part of the legal order of which direct effect is a corollary,” adding that it would be “both inappropriate and unnecessary for the agreement to require the UK to bring the EU concept of direct effect into its domestic law.”141

87.It is unclear how rights within the withdrawal agreement would be given direct effect. In his written evidence, Professor Phil Syrpis from the University of Bristol suggested that “even if the rights stemming from the agreement are actionable at the suit of individuals in national courts, those rights will count for little without effective remedies (in which context the exclusion of Francovich damages142 [in Schedule 1] is likely to be problematic).”143 Sir Stephen Laws proposed using a mechanism similar to Clause 2(1) of the ECA:

The agreement will have to be given effect to in UK law. The agreement is going to be an international agreement, just as the treaties are an international agreement, and the treaties given direct effect in UK law at the moment by Clause 2(1) of the European Communities Act. You could achieve the same in the exit agreement, the deal, or whatever it is.

[ … ] I can see that you can imagine a case where you treat the exit deal in the same way that the European Communities Act treats the treaties at the moment, and that may be what is being proposed. I do not see any objection to that. If that is what the deal requires, that is what you do.144

88.We were told that there was no way to make rights granted in the withdrawal agreement inviolable as no Parliament can bind its successor.145 Dr O’Brien was concerned about maintaining rights for EU citizens through Clause 9 regulations:

That is where I suspect it would be problematic for any withdrawal agreement that incorporates EU citizens’ rights to simply be a matter of secondary legislation or a matter of ministerial power, because it is important that the people who might fall through the gaps are protected or at least offered some kind of scrutiny of what their rights are going to be.146

She underlined that it would likely be the most vulnerable citizens – “children, women, including victims of domestic abuse who have had to be relocated” and “women who have been the family member of a UK national rather than of an EU national” whose rights to reside would fall outside Directive 2004/38 and outside the ambit of Clause 9.147

89.The explanatory note to the Bill identifies EU citizens’ rights as one of the potential areas where the power to correct deficiencies arising from withdrawal (under Clause 7) might be used:

The power to deal with deficiencies can therefore modify, limit or remove the rights which domestic law presently grants to EU nationals, in circumstances where there has been no agreement and EU member states are providing no such rights to UK nationals.148

Witnesses told us that, even though this power would exist, if there was an agreement with the EU to guarantee citizens’ rights the Government would not use it as “the UK would be bound in international law to preserve those rights, and the UK Government has a practice of complying with its international obligations.”149 A point also made in the Government’s Technical Note:

[ … ] if the Withdrawal Agreement requires the UK to give citizens specified rights, and the UK enacts domestic legislation whose effect is to bestow those rights. Not only will EU citizens be able to enforce those rights through the UK’s domestic legal system, but the UK’s compliance with its international obligations can also be enforced using whatever mechanisms the agreement includes for the resolution of disputes.150

90.We were told by Ministers that legislation to reassure the EU27 that citizens’ rights would be protected and directly effective, would not be “something that is likely to be dealt with under the powers that we are discussing today in this Bill” but would be “very likely to be a primary, rather than a secondary, process.”151

91.The Government has proposed that the withdrawal agreement be incorporated fully into UK law as a means to provide greater reassurance and protection for citizens’ rights. We support the position put to us by Ministers that this will be done through separate primary legislation rather than using the powers in this Bill.

3.3 Dispute resolution

92.The mechanisms for enforcing the withdrawal agreement and resolving disputes arising from it will be crucial to the whole agreement, and could themselves be one of the major areas of dispute. The key question will be what role, if any, the CJEU will have in the enforcement of the agreement, interpreting its provisions, and how its rulings will be taken into account.

93.The EU27 have proposed the establishment of a Joint Committee comprising representatives of both the EU and the UK. However, owing to their concerns that rights specified in UK domestic legislation could be altered by subsequent UK domestic legislation, the EU27 have called for a separate regime for the enforcement of the provisions on citizens’ rights, requiring that “the Court of Justice has jurisdiction corresponding to the duration of the protection of citizen’s rights in the Withdrawal Agreement.”152

94.The UK Government has argued that leaving the EU “will bring an end to the direct jurisdiction of the CJEU.”153 As the Secretary of State told us, by the end of any implementation period, we would “want to be under alternative administration arrangements in terms of international arbitration.”154 The Government questioned the rationale for a continued role for the CJEU in its future partnership paper on enforcement and dispute resolution, saying that:

it does not follow that the CJEU must be given the power to enforce and interpret international agreements between the EU and third countries, even where they utilise terms or concepts found in EU law. Nor is it a required means of resolving disputes between the EU and third countries on the interpretation or implementation of an agreement. The EU is able to (and does) agree to a wide range of approaches to dispute resolution under international agreements, including by political negotiation and binding third party arbitration.155

95.We heard that the role proposed by the EU27 for the CJEU to enforce citizens’ rights in the UK was “unprecedented and was remarkable.”156 Professor Ekins told us that it was a “basic problem of fairness”:

No sovereign state, at least in international practice, is going to commit itself to the jurisdiction of a tribunal that is a part of the body with whom it is in dispute. When I said “remarkable”, I meant “outrageous”, I should add.157

96.The Government set out various alternative models to the CJEU for enforcement and dispute resolution in its future partnership paper, without saying which it prefers. This could mean that different mechanisms are considered appropriate for different issues. These include a Joint Committee and a special international court, similar to the EFTA Court, while the paper also recognises the value of a continuing relationship between national courts and the CJEU particularly in situations where there is a “shared interest in reducing or eliminating divergence”, for example in data protection.158

97.Identifying mechanisms for enforcing the withdrawal agreement and resolving disputes arising from it will be a central part of the agreement itself. The Government has suggested various alternative dispute resolution mechanisms but should be clearer as to which mechanisms it considers appropriate for which types of dispute. While a continuing role for the CJEU and its case-law cannot be ruled out in areas where there may be continued partnership or convergence of standards and regulations, it is not appropriate that the CJEU would continue to have jurisdiction in the UK to enforce citizens’ rights after the UK has left the EU. This should be done by a body representing both parties to the agreement.

3.4 Exit day

98.The Bill as drafted includes a number of references to “exit day” which will determine, among other provisions, when the ECA is repealed, the point at which retained EU law is captured, and the length of the sunset clauses applicable to the powers in Clauses 7, 8 and 9. “Exit day” is currently defined in Clause 14 as “such day as a Minister of the Crown may by regulations appoint.” The House of Lords Committee on the Constitution explains:

The Bill contains no express provisions that constrain the scope of ministerial discretion to define “exit day” or that otherwise set criteria by which “exit day” is to be determined. Indeed, the Bill leaves open the possibility that Ministers may provide through regulations that “exit day” is to be taken to mean one thing for one purpose and something else for another purpose. For instance, it may be possible for Ministers to provide that for the purpose of Clause 1 (repeal of the ECA) “exit day” is to be taken to be 29 March 2019, but that for the purpose of the Clause 7 amendment powers (which lapse, through a sunset clause, two years after “exit day”) “exit day” is to be taken to be some later date.159

99.Sir Stephen Laws was not concerned by the power in the Bill to appoint different exit days for different purposes. He told us that flexibility in the designation of commencement days is a common provision in legislation, allowing for different provisions to be brought into force on appointed days.160 Professor Ekins suggested that the flexibility given to the Government could allow provisions to be delayed or extended over a transitional period.161 Steve Baker confirmed that the interpretation that different exit days could be set for different purposes was indeed the correct interpretation of the provisions in the Bill.162

100.Sir Stephen Laws emphasised that the provision of different exit days would not change the day when the UK actually exits the European Union which will be, in accordance with Article 50, the day on which the Treaties of the EU cease to apply to the UK.163 However, the Government has tabled amendments to the Bill to make references to “exit day” the same as the date the UK actually exits the EU by setting “exit day” for all purposes in the Bill as 29 March 2019 at 11.00 pm.164 This would appear to remove the option to defer the commencement of certain provisions during an implementation period, however; Ministers told us there would be separate primary legislation providing for an implementation period.

101.Clause 14 as drafted places it within the hands of Ministers to decide which exit day will apply to which provisions in the Bill. This would have implications for when the European Communities Act is repealed, the point at which a snapshot of EU law is taken and transposed into UK law, and when the Henry VIII powers granted to Ministers in this Bill will expire. The flexibility to set multiple exit days was described to us as a tool for setting different commencement dates for different provisions and providing for possible transitional arrangements. The Government’s latest amendments will however, if agreed by the House, remove this flexibility by setting the exit day in the Bill as 29 March 2019 at 11.00 pm. This would create significant difficulties if, as the Secretary of State suggested to us in evidence, the negotiations went down to the 59th minute of the 11th hour.165

124 Ibid, para 62

125 Q50 (Sir Stephen Laws)

126 Q50 (Prof Richard Ekins)

127 Q160 (Steve Baker)

128 Sir Stephen Laws, (EUB0004) para 67

129 Legal Opinion, In the matter of Article 50 of the Treaty on European Union, Sir David Edward KCMG PC QC, Sir Francis Jacobs KCMG PC QC, Sir Jeremy Lever KCMG QC (Retired), Helen Mountfield QC, Gerry Facenna QC, see paras 2(ii) and (iii)

131 Q32 (Dr Charlotte O’Brien)

132 Speech given by the Prime Minister, A new era of cooperation and partnership between the UK and the EU, Florence, 22 September 2017

133 The Prime Minister said in her Florence speech that the framework for the implementation period “can be agreed under Article 50”.

134 Q187 (Steve Baker)

135 Q188 (Steve Baker)

136 HC Deb, 13 November 2017, col 37, [Commons Chamber]

137 Ibid, see questions from Keir Starmer in col 39, Yvette Cooper in col 43, and Dominic Grieve in col 44

138 HC Deb, 17 October 2017, col 731 [Commons Chamber]

139 Speech given by David Davis, Closing remarks at the end of the fourth round of EU exit negotiations, Brussels, 28 September 2017

142 the Francovich principle, which provided that the damages for a state’s failure to implement EU law should be available before national courts, and that state liability on the basis of the failure to implement a directive could be established in certain circumstances, is expressly excluded under provisions in Schedule 1

143 Prof Phil Syrpis (EUB0005) para 13

144 Q8 (Sir Stephen Laws)

145 Q32

146 Q32 (Dr Charlotte O’Brien)

147 Ibid

149 Q33 (Sir Stephen Laws)

151 Qq252–5 (Steve Baker and Robin Walker)

152 European Commission, Position Paper on Governance, TF50 (2017) 4, 12 July 2017, p3

154 Oral evidence taken on 25 October 2017, HC (2017-19) 372, Q10 [David Davis]

156 Q58 (Prof Richard Ekins)

157 Q61 (Prof Richard Ekins)

159 House of Lords Constitution Committee, Third Report of Session 2017–19, European Union (Withdrawal) Bill: interim report, HL 19, para 20

160 Q17 (Sir Stephen Laws)

161 Q12 (Prof Richard Ekins)

162 Q162 (Steve Baker)

163 Q17 (Sir Stephen Laws)

164 See amendments 381, 382 and 383

165 Oral evidence taken on 25 October 2017, HC (2017-19) 372, Q90 [David Davis]

17 November 2017