Chapter 2: Implementation (Parts 1 & 2)
Territorial extent
16.The Bill extends to the whole of the United Kingdom.15 Various provisions including clause 1, relating to repeal of the ECA, also extend to the Isle of Man, the Channel Islands and Gibraltar.16
Part 1: Implementation period
17.The Bill provides a legal scheme for the continued operation of existing EU law during the “implementation period”. The Withdrawal Agreement calls this the “transition period”,17 but in this report we use “implementation period”, as that is the term in the Bill. This will last until 31 December 2020.18 The Withdrawal Agreement provides that European Union law “shall be applicable to and in the United Kingdom during the transition period”.19 During that period, Union law shall have “the same legal effects” in the United Kingdom as it produces within the European Union and its Member States, “and shall be interpreted and applied in accordance with the same methods and general principles as those applicable within the Union.”20
18.The provisions in this part of the Bill must be read alongside the European Union (Withdrawal) Act 2018. Section 1 of the 2018 Act remains in place. This means that on “exit day” the ECA will be repealed. However, in order to comply with Article 127, the Bill “saves” the terms of the ECA for the implementation period.
19.The Bill amends the 2018 Act in relation to retained EU law. The provisions for converting EU law into retained EU law (sections 2–4) and relating to the primacy of retained EU law (sections 5–7) in domestic law will now take effect at the end of the implementation period.21
20.Clause 1 inserts a new section 1A into the 2018 Act to save the effects of the ECA for the implementation period. New section 1A(2) provides that the ECA will continue to have effect despite its repeal by the Bill. This is done by inserting Part 4 of the Withdrawal Agreement (other than as it relates to the Common Foreign and Security Policy) into the definition of EU law and “the Treaties” in the ECA.22
21.Although the UK will have left the EU and the ECA will be repealed, the ECA framework will continue to apply until the end of 2020 to ensure the effective primacy of EU law during this period. This means that during the implementation period EU rules will apply in the United Kingdom as at present, including the operation of directly applicable EU law made before the end of 2020. This rule also applies to any international agreement concluded by the EU and entering into force during the implementation period. To reinforce the continuity principle, new section 1A(3)(e) provides that EU rules on customs duties and the Common Agricultural Policy (CAP) continue to apply as they do at present. This is made explicit “to avoid any suggestion that the Bill merely preserves CAP arrangements and customs duties etc. as they had effect at the moment of withdrawal.”23
22.New section 1A(3)(d) modifies section 3(1) of the ECA to bring the Withdrawal Agreement within the purview of the rules of interpretation and the primacy of CJEU decisions on matters of EU law. The Government explains that this will “ensure that EU rules are interpreted and applied consistently in both the UK and the EU for the duration of the implementation period,”24 and “[d]uring the implementation period, the UK will maintain the same recourse to the EU’s judicial review structures as a Member State.”25 To this end, the Bill amends section 6 of the 2018 Act so that its provisions which end the jurisdiction of the CJEU will take effect only at the end of the implementation period.26
23.Although the UK’s obligations in relation to EU law will apply through the Withdrawal Agreement rather than as a Member State, the effect on citizens will be the same. One consequence of the “same legal effects” provision is that “legal or natural persons will be able to rely directly on some of the provisions of the Withdrawal Agreement before the UK courts.”27
24.Under the Agreement, the United Kingdom is permitted during the transition period “to negotiate, sign and ratify international agreements entered into in its own capacity in the areas of exclusive competence of the Union” but these agreements may not “enter into force or apply during the transition period, unless so authorised by the Union”.28
25.Since new section 1A(3) (in clause 1) in effect inserts Part 4 of the Withdrawal Agreement into the definition of “the Treaties” in the ECA, the duty of officials and courts to give effect to EU law, and how they interpret EU law, will seem unchanged. The ECA will continue to be their point of reference, and the interpretive rules that have built up since the 1970s will presumably continue to apply.
26.The continued effect of ECA primacy also applies to devolved institutions and devolved legislation, each of which is subject to EU law primacy under current arrangements. The restrictions on devolved competence which currently refer to the ECA will be preserved for the duration of the implementation period.
27.Clause 2 inserts a new section 1B into the 2018 Act. This saves “EU-derived domestic legislation” for the duration of the implementation period. “EU-derived domestic legislation” is UK law that has been made to give effect to EU law.
28.This provision is necessary due to the modification and effective suspension of the retained EU law provisions in the 2018 Act (clauses 25–27, discussed below). In effect, clause 2 seeks to replicate section 2 of 2018 Act, and the definition of “EU-derived domestic legislation” in new section 1B(7) mirrors that in section 2 of the 2018 Act.
29.There is no need to make equivalent provision for “direct EU legislation”29 or “rights, powers, liabilities, obligations, restrictions, remedies and procedures” under section 2(1) of the ECA30 because each of these categories is specifically saved by clause 1 of the Bill through which, in effect, the ECA continues to operate.
30.New section 1B(3) contains a number of “glosses” to make sure that EU-derived domestic legislation is interpreted in light of any changes in EU law or modifications of its terms that have occurred since the ECA came into force.31 New section 1B(4) provides that any new EU-derived domestic legislation that is made or passed during the implementation period is to be read in light of the “glosses” in new section 1B(3).
31.The effect of Part 1 is that the relationship between domestic law and EU law will remain the same until the end of the implementation period on 31 December 2020.
Delegated powers in Part 1
32.The Bill contains a range of delegated powers to give effect to the Withdrawal Agreement. The Delegated Powers and Regulatory Reform Committee (DPRRC) has assessed the appropriateness of these powers and the scrutiny processes to which they will be subject.32 We refer to its recommendations throughout this report. The main delegated powers are:
- Clause 2, which inserts new section 1B into the 2018 Act, makes EU-derived domestic legislation subject to delegated powers of ministers for the implementation period.33
- Clause 3, which inserts a new section 8A into the 2018 Act to give ministers a supplementary power in connection with the implementation period. This extends existing powers under section 8 of the 2018 Act. This new power relates principally to clause 2 and through it to new section 1B of the 2018 Act.
- New section 8A(1) of the 2018 Act gives a minister the power to add “glosses” in relation to EU-related terms or to disapply the glosses set out in new section 1B(3) and, subsequently, the interpretational requirement in new section 1B(4).
- New section 8A also contains Henry VIII powers. One permits repeal of provisions in the 2018 Act to reflect changes in the Bill concerning “Implementation Period (IP) completion day”—i.e. the end of the transition period.34 The other is a broad power “to make such provision … as the Minister considers appropriate for any purpose of, or otherwise in connection with, Part 4 of the Withdrawal Agreement.”35
- The broadest Henry VIII power in the provision is new section 8A(2): “The power to make regulations under subsection (1) may (among other things) be exercised by modifying any provision made by or under an enactment.” This does not extend to modifying primary legislation passed after the implementation period completion day.36
- There is a sunset clause in relation to new section 8A(1): “No regulations may be made under subsection (1) after the end of the period of two years beginning with IP completion day.”37
33.Clause 4 inserts a new Part 1A, “supplementary power in connection with implementation period”, into schedule 2 to the 2018 Act. This is the schedule which gives powers to devolved authorities in relation to the section 8 powers of UK ministers. The purpose of new Part 1A is to reflect the changes made to the 2018 Act by clause 3. It provides for the making of regulations by devolved authorities, defines devolved competence in a similar way to other provisions in schedule 2 and provides for the making of regulations jointly by a UK minister and a devolved authority.
34.The amendment to schedule 2 provides: “No provision may be made by a devolved authority acting alone in regulations under this Part unless the provision is within the devolved competence of the devolved authority.”38 Any other regulation must be made jointly with UK ministers.39
35.These broad powers are intended to serve the same purpose as the Bill itself, which is to give effect to the Withdrawal Agreement and the two related international agreements. Under Part 1 of the Bill, these powers are constrained by the terms of these Agreements in a similar way to that in which section 2 powers under the ECA are constrained by the terms of EU law. However, given their more restricted purpose they are narrower and more circumscribed than the ECA section 2 powers. If these powers were used to make statutory instruments which are considered to be contrary to the terms of the Agreements they would be open to legal challenge.
36.The Delegated Powers and Regulatory Reform Committee observed that the general approach in the Bill is that the affirmative procedure is mandatory where regulations modify primary legislation or retained direct principal EU legislation; otherwise the negative procedure prevails. It said:
“The Government have not sought to justify this departure from the approach taken in the 2018 Act. Regulations that are otherwise of minor importance but amend one provision of primary legislation will trigger the affirmative procedure. By contrast, significant regulations that do not happen to amend either primary legislation or retained direct principal EU legislation merely trigger the negative procedure.”40
37.The DPRRC recommended replicating the sifting mechanism found in schedule 7 to the 2018 Act to allow for regulations that do not otherwise qualify for the affirmative procedure to be upgraded.41 We agree with the DPRRC that, given the importance and potential breadth of these powers, they should be subject to a sifting mechanism as part of their parliamentary scrutiny.
Part 2: Remaining implementation of Withdrawal Agreement etc.
38.Clause 5 is a general provision designed to give effect to Article 4 of the Withdrawal Agreement, relating to its implementation. It inserts a new section 7A into the 2018 Act (section 7 of the 2018 Act concerns the status of retained EU law).
39.Article 4(1) of the Withdrawal Agreement states:
“The provisions of this Agreement and the provisions of Union law made applicable by this Agreement shall produce in respect of and in the United Kingdom the same legal effects as those which they produce within the Union and its Member States.
Accordingly, legal or natural persons shall in particular be able to rely directly on the provisions contained or referred to in this Agreement which meet the conditions for direct effect under Union law.”
40.Clause 5 does not apply to Part 4 of Article 4, which is provided for in clauses 1–4. Clause 5 is a safety provision to ensure that the rules in the Agreement concerning the direct applicability of the Agreement in UK law,42 the requirement that the Agreement be interpreted in line with EU law,43 and the legal supremacy of the Agreement, apply to all aspects of the Agreement through, if necessary, the disapplication of “inconsistent or incompatible domestic provisions”.44 There is also a provision that will remain effective after the end of the implementation period:
“the United Kingdom’s judicial and administrative authorities shall have due regard to relevant case law of the Court of Justice of the European Union handed down after the end of the transition period.”45
41.New section 7A(1) gives effect to this in a formula similar to section 2 of the ECA. All rights etc. under the Withdrawal Agreement “are without further enactment to be given legal effect or used in the United Kingdom.” Under subsection (2) these rights etc. are to be recognised and enforced in domestic law46 and “[e]very enactment (including an enactment contained in this Act) is to be read and has effect subject to subsection (2)”.47
42.Clause 5 offers different interpretive instructions from section 6 of the 2018 Act in relation to retained EU law. This is because it is concerned with the Agreement, which is transitional in nature and works on the assumption that section 6 of the 2018 Act will apply in relation to retained EU law at the end of the implementation period.
43.Clause 6 concerns the general implementation of the EEA EFTA and Swiss agreements. It mirrors clause 5 in attempting to ensure a uniform approach to implementation of the three Agreements. It does so by inserting a new section 7B into the 2018 Act.
44.New section 7B(3) provides that in the event of any conflict between the EEA EFTA Agreement or the Swiss Citizens’ Rights Agreement and the Withdrawal Agreement, the latter is to take precedence.
45.These clauses reiterate the general thrust of Part 1 of the Bill, which is the continuity in practice of the existing relationship between domestic law and EU law for the duration of the implementation period. Not all of the Bill’s provisions are time-limited; in a number of areas, such as citizens’ rights, its effect will continue after 2020. Those areas covered by time-limited provisions may need to be legislated for subsequently, further to the outcome of negotiations with the EU on the future relationship.
15 European Union (Withdrawal Agreement) Bill, clause 42
16 Ibid., clause 42(3)
17 The Preamble and Article 126 include the phrase “transition or implementation period”, otherwise “transition period” is used throughout the rest of the Withdrawal Agreement.
18 HM Government, New Withdrawal Agreement and Political Declaration, 19 October 2019, Article 126. https://www.gov.uk/government/publications/new-withdrawal-agreement-and-political-declaration [accessed 13 January 2020] There is the possibility of a single extension for up to one or two years if adopted by the Joint Committee before 1 July 2020 (under Article 132); however clause 33 of the Bill prohibits a minister from agreeing any such extension.
19 HM Government, New Withdrawal Agreement and Political Declaration, 19 October 2019, Article 127
20 Ibid., Article 4 and Article 127(3)
21 European Union (Withdrawal Agreement) Bill, clauses 25–27
22 Ibid., clause 1, inserted section 1A(3)
26 European Union (Withdrawal Agreement) Bill, clause 26(1)
28 HM Government, New Withdrawal Agreement and Political Declaration, Article 129(4)
31 “Glosses” are defined as: “Non-textual modifications to legislation (i.e. reading X as Y). For example used to make clear the way that EU law terms should be read on the UK statute book, so that our laws continue to work during the implementation period. This includes ensuring that across the UK statute book, references to ‘EU citizens’, will be read as including UK nationals for the duration of the implementation period.” European Union (Withdrawal Agreement) Bill, Explanatory Notes, Annex B, page 89
32 Delegated Powers and Regulatory Reform Committee, European Union (Withdrawal Agreement) Bill (1st Report, Session 2019–20, HL Paper 3)
33 “Subsections (2) to (4) are subject to any regulations made under section 8A or 23 or Part 1A of schedule 2 or otherwise under this Act or under the European Union (Withdrawal Agreement) Act 2020.” European Union (Withdrawal Agreement) Bill, clause 2, inserted section 1B(5)
34 European Union (Withdrawal Agreement) Bill, clause 3, inserted section 8A(1)(d)
35 Ibid., clause 3, inserted section 8A(1)(e)
36 Ibid., clause 3, inserted section 8A(3)
37 Ibid., clause 3, inserted section 8A(4)
38 Ibid., clause 4, inserted para 11B(1)
39 Ibid., clause 4, inserted para 11B(2)
40 Delegated Powers and Regulatory Reform Committee, European Union (Withdrawal Agreement) Bill (1st Report, Session 2019–20, HL Paper 3), para 13
41 Ibid., para 16
42 HM Government, New Withdrawal Agreement and Political Declaration, Article 4(1)
43 Ibid., Article 4(3) and 4(4)
44 Ibid., Article 4(2)
45 Ibid., Article 4(5)
46 European Union (Withdrawal Agreement) Bill, clause 5, inserted section 7A(2)
47 Clause 39 (interpretation) states that an enactment means “an enactment whenever passed or made”.