Third Report Contents

Clause 7: dealing with deficiencies arising from withdrawal

(i) Effect

12.Clause 7 allows Ministers by regulations to make such provision as they consider appropriate to prevent, remedy or mitigate:

(a) any failure of retained EU law8 to operate effectively, or

(b)any other deficiency in retained EU law,

arising from withdrawal of the UK from the EU.9

13.Deficiencies in retained EU law include (but are not limited to) cases where Ministers10 consider that retained EU law:

(a)is substantially redundant, for example, relating to European Parliamentary elections;

(b)confers functions on EU entities which need transferring to a national body, for example, from the European Air Safety Authority to the Civil Aviation Authority;

(c)makes provision for reciprocal arrangements between the UK and the EU that will no longer exist or no longer be appropriate;

(d)contains no functions or restrictions which were in an EU directive and in force immediately before exit day and which are appropriate to retain;

(e)contains EU references which are no longer appropriate.

14.Regulations made under clause 7 may do anything that an Act of Parliament can do.11 This is a Henry VIII power as it allows for the repeal or amendment of primary legislation. However there are some things that cannot be done under clause 7, including taxation, retrospective legislation, criminal offences punishable by more than two years’ imprisonment, changes to the Human Rights Act 1998 and certain changes to the Northern Ireland Act 1998.12

(ii) Concerns

15.Clause 7 is notable for its width, novelty and uncertainty.

16.Under clause 7(1)(a), Ministers can make regulations to prevent, remedy or mitigate “any failure of retained EU law to operate effectively” arising from the UK’s withdrawal from the EU. By what standards is the failure to operate effectively to be judged? In relation to whom or what is the ineffective operation to be judged? Need it be a major failure? What if the failure is in relation to some sectors of the economy or society but not others? There is no obvious answer to these questions.

17.The uncertainty of the meaning of clause 7(1)(a) is exacerbated by the uncertainty of “retained EU law” as defined in clause 6(7), which in turn refers to the definition of “EU-derived domestic legislation” in clause 2(2). It is by no means clear precisely what clause 2(2)(b)–(d) is referring to, adding to the uncertainty of the scope of clause 7(1)(a).

18.Clause 7 also allows Ministers to legislate to prevent, remedy or mitigate “any other deficiency” in retained EU law arising from the UK’s withdrawal from the EU. This is a very wide power, given that the dictionary definition of “deficiency” includes a failure, want, lack or absence. Although clause 7(2) gives seven overlapping examples of deficiencies in retained EU law, there is no obvious rationale underlying them beyond the fact that they must arise from the UK’s withdrawal from the EU. In any event the definition in clause 7(2) is expressly stated to be non-exhaustive.

19.Paragraph 1.21 of the White Paper said that the Great Repeal Bill would 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”.

20.Likewise, paragraph 3.7 of the White Paper said that the Bill:

“will provide a power to correct the statute book, where necessary, to rectify problems occurring as a consequence of leaving the EU”.

The delegated powers memorandum refers to Ministers having the power by regulations to make “necessary corrections to the statute book”.13

21.However, clause 7 is drafted in much wider terms. Instead of a test based on necessity, the test is based on the subjective judgment of the Minister as to what he or she considers to be appropriate. There is nothing to suggest that the judgment of appropriateness is confined to technical matters or purely mechanistic changes. There is scope for Ministers to make regulations arising from EU withdrawal with an extensive policy content across the whole of retained EU law.

“Necessary” versus “appropriate”: some examples

22.One example concerns EU Regulation No. 883/2004 on the co-ordination of social security systems. As “direct EU legislation” under clause 3, the Regulation will become “retained EU law” under clause 6. It sets out rules designed to ensure that people receive the full benefit of the contributions they have made so that they are not disadvantaged by reason of having moved to live or work elsewhere in the EU. It also provides that some social security benefits have to be exported if the person claiming them moves to another Member State. Hence UK citizens who have retired to Spain are entitled to have their state retirement pension or invalidity benefits paid to them in Spain in full on the same basis as if they had stayed in the UK. The Regulation would appear to fall within clause 7(1)(b) and (2)(c) & (d) of the Bill — so that Ministers could legitimately form the view that there is a deficiency in the Regulation arising from the withdrawal of the UK from the EU and it is, therefore, “appropriate” to repeal or substantially rewrite the Regulation as from exit day so as to end the obligation to export benefits, or to prevent EU citizens resident in the UK from claiming benefits here. Whether this would be “necessary” appears to be more doubtful.

23.Another example is in the new EU General Data Protection Regulation,14 which will also become “retained EU law”. Clause 7 allows Ministers to amend it if they think it “appropriate” to remedy any failure of the law to operate effectively arising from the UK’s withdrawal from the EU. Under the Regulation, individuals have rights of access to personal data subject to exceptions such as national security, defence and public security. Ministers might take the view that, once we no longer have to recognise the supremacy of EU law when we have left the EU, the exceptions to data access rights do not operate effectively as regards EU citizens resident in this country and should be widened under clause 7 to prevent them, say, from having a right of access to immigration information held about them by the Home Office. Using a test of necessity, it would not be necessary for the law to be changed to give the Government the benefit of a wider derogation than they currently possess under the Regulation. But it is arguably something that Ministers could decide was “appropriate” to do as it arises from the UK’s withdrawal from the EU.15

24.The Committee has previously drawn attention to loosely-drawn powers based on the subjective judgment of the Minister and has argued for their being restricted by an objective test of necessity.16

25.Drawing on Case Study 3 at page 21 of the White Paper, we take the hypothetical example of regulations under clause 7 altering a legal duty to send information to an EU body, because the EU body would no longer accept the information once the UK leaves the EU. The issue raises policy questions as to what is to become of this information requirement. Should the information go instead to an existing UK body? Should it go to a newly-created body? Should the requirement be scrapped altogether? Should more or less information be sent to some other body?

26.It might be argued that none of these solutions is strictly necessary and that, therefore, a wider test based on what Ministers regard as appropriate should be employed. We disagree. The Bill ought to be drafted so that Ministers may make remedial provision only where:

(a)there is a deficiency in retained EU law arising from the UK leaving the EU, and

(b)it is necessary to prevent, remedy or mitigate it.

Once this necessity threshold is met, Ministers may choose whichever solution most commends itself even if it is one of several possible solutions. In the information example, a requirement to collect and send information that will no longer be accepted by the EU institution is a deficiency that it is necessary to remove from the statute book on the ground that it cannot be right to retain a redundant legal duty that amounts to a waste of time, effort and public money. Having passed this hurdle, Ministers would not be stopped from acting merely because the proposed solution was one of several that might have been devised. In other words, the operative test in clause 7 would be whether it is necessary to deal with the problem, not whether only one solution follows inexorably.

27.The things that Ministers cannot do in regulations made under clause 7 bear some resemblance to the restrictions currently found in the European Communities Act 1972. However, there is something that regulations under clause 7 can do that regulations under the 1972 Act cannot. Regulations under clause 7 allow for “legislative sub-delegation”. That is to say, regulations under clause 7 may allow people or bodies, including Ministers themselves, to make further subordinate legislation (tertiary legislation) without there necessarily being any parliamentary procedure or even any requirement for the tertiary legislation to be made by statutory instrument. Paragraph 12 of Schedule 7 says that regulations made by Ministers must be made by statutory instrument. This would not catch other forms of subordinate legislation apart from regulations. It would not cover tertiary legislation made by non-Ministers. Arguably it does not catch tertiary regulations at all (on the basis that they are not made under the Act but are made under secondary legislation which is itself made under the Act). Where tertiary legislation is not made by statutory instrument, it evades the publication and laying requirements of the Statutory Instruments Act 1946. Despite its greater inaccessibility, tertiary legislation is still the law.

28.The delegated powers memorandum suggests that the power to make tertiary legislation is intended to be used sparingly, where it is appropriate for powers to be conferred independently of political control, for example, conferring powers on a regulator to set standards. However, there is nothing in the Bill that limits the power in this way. It could be used for any purpose for which regulations may be made under clause 7. It could, for example, be used to create new bodies with wide powers to legislate in one of the many areas currently governed by EU law, including aviation, banking, investment services, chemicals and medicines. The regulations might also contain only skeleton provisions in relation to a particular activity, leaving the detailed regime to be set out in tertiary legislation made not by Parliament, or even by Ministers, but by one of the new bodies so created.

29.Although regulations made under clause 7 cannot be made after the period of two years following “exit day”,17 the ability to provide for sub-delegated powers in regulations under this clause (and under clauses 8 and 9) allows the Government to circumvent the two-year period. Paragraph 28 of Schedule 8 to the Bill states that the two-year restriction does not apply to such tertiary legislation, meaning that those powers could be exercised after the two-year period elapses.

30.We also note that the prohibition in clause 7(6)(c) against certain criminal offences being created by regulations does not prevent the levying of substantial civil penalties. Indeed, the power for Ministers to create criminal offences attracting a sentence of up to two years’ imprisonment is a significant one.

(iii) Recommendations

31.Clause 7 involves an inappropriately wide delegation of power.

(a)The “appropriateness” test in clause 7 should be circumscribed in favour of a test based on necessity. Currently, the Bill allows regulations to make substantial policy changes that ought to be made only in primary legislation.

(b)Tertiary legislation should be subject to the same parliamentary control and time-limits applicable to secondary legislation.

8 The body of EU law that continues to form part of domestic law by virtue of clauses 2 to 4 of the Bill.

9 Schedule 2 confers corresponding powers on Scottish Ministers, Welsh Ministers and Northern Ireland Departments to make regulations for the same purposes within their respective areas of legislative competence. In some cases, the regulations have to be made jointly with, or with the consent of, a UK Government Minister. This point also applies to clauses 8 and 9. In the case of clause 9 (where UK Government Ministers can amend the European Union (Withdrawal) Act itself), the same power does not apply to Ministers in the devolved administrations.

10 The references to “Ministers” include (where applicable) references to Ministers in devolved administrations exercising the delegated powers conferred by Schedule 2 to the Bill.

11 Clause 7(4).

12 Clause 7(6).

13 Para. 12(ii), page 11.

14 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (OJ L 119/89, 4 May 2016).

15 By contrast, the UK Information Commissioner will, after we have left the EU, no longer be obliged to co-operate with current EU counterparts in order to contribute to the consistent application of the EU Regulation throughout the EU (precisely because we will have left the EU). This would be an example where the “necessity” test would allow the Government to remove the legal duty to co-operate found in Article 63 of the Regulation.

16 15th Report, Session 2016–17 (HL Paper 104), para. 55, in the context of the Neighbourhood Planning Bill.

17 “Exit day” is a day or days specified by regulations under clause 14, discussed later in this Report at page 19.

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