The Statutory Instrument has been laid after European Union leaders agreed on Friday 22nd March to a very short delay to the United Kingdom's exit from the European Union. Although the new timetable is shorter than the Article 50 extension Prime Minister Theresa May originally sought, she hopes it will be sufficient to enable her Government to win Parliamentary support for the Withdrawal Agreement she has negotiated with the European Union.
Under the new arrangements, the European Union leaders have put forward three options. If Theresa May can obtain Parliamentary support for her Government's Withdrawal Agreement then Brexit will occur on 22nd May 2019 (delayed from the originally timetabled 29 March). If not, then the UK could potentially leave the European Union without a deal on 12th April 2019. Alternatively, European Union leaders have signalled a willingness to agree a longer extension if Britain needs to further time to reconsider the decision to leave the European Union, albeit the EU has said it will want to understand why the extension would be necessary, for example to allow a General Election or a second referendum to take place.
The option of a longer extension will appeal to the 1 million people reported to have participated in the 'Put It To The People' March in Central London on Saturday 23rd March 2019. Conversely any delay to Brexit is a source of concern and frustration to leave campaigners who have also protested in recent days.
An alternative option involving the United Kingdom revoking Article 50 (as discussed in our article on the Wightman case) has developed momentum in recent days with 5.5 million people signing a petition for the United Kingdom to revoke Article 50 and remain in the European Union since 20 March 2019.
Theresa May's request for Brexit to be delayed is based upon her desire to get Parliament to agree to ratify the Withdrawal Agreement she has negotiated with the European Commission (acting on behalf of the remaining European Union Member States).
The terms of the Withdrawal Agreement alongside those of the Framework for the Future Relationship were agreed 'in principle' in late November 2018. The European Union leaders confirmed their agreement to the terms of the Withdrawal Agreement at a special meeting of the European Council on 25 November 2018.
Getting agreement to the terms of the draft Withdrawal Agreement has been more challenging for the UK Government. Under Section 13(1)(b) of the European Union (Withdrawal) Act 2018 the Government had committed to a 'meaningful vote' in the House of Commons to ratify the terms of the Withdrawal Agreement. This meaningful vote was postponed on 11 December 2018 after a 5 day debate in the House of Commons. Subsequent meaningful votes on 15 January 2019 and 12 March 2019 did not win Parliamentary support. Despite this, the current Government policy is to continue to try to win support for such a deal.
This process has been made more difficult by the Speaker of the House of Commons John Bercow who has referred to a provision of Erskine May (which sets out the rules of Parliamentary procedure) which reads "a motion or an amendment which is the same, in substance, as a question which has been decided during a session, may not be brought forward again during that same session" as the reason to refuse a third meaningful vote being heard, unless it can be shown that the motion is different to that already rejected (or brought forward under a new session of Parliament).
Although Theresa May had been eager for Brexit to occur on 29th March 2019. However on 14th March 2019 a motion carried in the House of Commons by 412 to 202 votes which directed the Government to “seek to agree with the European Union an extension” of Article 50. This was the basis for Theresa May writing to request a delay to the Brexit process until 30 June 2019.
If Theresa May is able to get sufficient support for the Withdrawal Agreement, then the UK will enter into a transition period with the European Union upon the terms agreed in the Withdrawal Agreement, during which time the UK and EU shall use their best endeavours to put in place the steps to give effect to the principles agreed in the Framework for the Future Relationship (a commitment made at Article 2 of the Withdrawal Agreement). If rejected by Parliament, it is understood that the Prime Minister plans to allow Parliament to signal their preference in respect of the alternatives, such as preparing for a no deal, a managed exit or even a fresh referendum.
The Framework for the Future Relationship, is a 36 page statement of political intent whose full title is the 'Political declaration setting out the framework for the future relationship between the European Union and the United Kingdom' which sets out the heads of terms for the UK-EU arrangements to come into force after the transitional period comes to an end.
The document expressly states that the UK and EU shall aim to establish 'an ambitious, broad, deep and flexible partnership across trade and economic cooperation, law enforcement and criminal justice, foreign policy, security and defence and wider areas of cooperation' between the parties and acknowledges that "the future relationship may encompass areas of cooperation beyond those described in this political declaration"
As the Framework for the Future Relationship is only a statement of political intent, it is not binding but it is likely to form the basis of a subsequently negotiated and binding document. One reason it is not binding is because the European Union cannot enter into treaties with existing Member States. The document contains a series of general commitments specifying areas where the parties will work together to agree rules in the future. This includes goods, services, intellectual property, travel, transport, energy, the environment, security, defence, judicial cooperation and many otherareas. Furthermore the UK and EU commit to continue to uphold certain core values such as those relating to human rights and the rule of law, as well as taking action to improve data protection, setting up a level playing field for businesses to compete and take action in respect of nuclear proliferation.
Although much of the Framework for the Future Relationship contains high level aspirations, which will need to be significantly fleshed out during the transitional period, in some areas there does already appear to be an agreed direction, for example, to 'build and improve on the single customs territory' in order to enable tariff free trade and to work together to address climate change and establish rules for open and fair competition. These commitments are qualified by acknowledgment statement that there must be an "appropriate balance between rights and obligations – the closer and deeper the partnership the stronger the accompanying obligations".
Progress in turning the Framework for the Future Relationship into concrete arrangements will be the subject of high level conferences held every six months between the UK and EU.
The Withdrawal Agreement, is a 585 page document whose full title is the 'Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community', which sets out the basis for a transitional period after the UK leaves the EU and which provides the opportunity for the UK and EU to work up arrangements based upon the Framework for the Future Relationship.
Under Article 185 the Withdrawal Agreement is stated to come into effect on 30th March 2019 (although, if adopted it is understood that amendments will be made so this shall be replaced with 22nd May 2019, following the negotiations on 22nd March 2019) provided the UK and EU have been able to get the necessary approvals (for the UK this involves House of Commons approval under Section 13 of the European Union (Withdrawal Act) 2018). Under Article 126 the transition period shall end on 31 December 2020. However Article 132 allows for the transition period to be extended.
Naturally, the focus has therefore been upon Article 132 extension conditions. In the version of the Withdrawal Agreement published on 14 November, the text read "Notwithstanding Article 126, the Joint Committee may, before 1 July 2020, adopt a single decision extending the transition period up to [31 December 20XX]" which attracted widespread criticism. This was subsequently updated to "Notwithstanding Article 126, the Joint Committee may, before 1 July 2020, adopt a single decision extending the transition period for up to one or two years." In practical terms this means that both the UK and EU (who are the only two members of the Joint Committee) will have to reach agreement.
The default position of the Withdrawal Agreement is that EU law applies to the UK throughout the transition period (Article 127, although this does allow for exemptions to this rule to be created within the Withdrawal Agreement). The scope of Article 127 means that changes to EU law made during the transitional period shall apply to the UK. It follows that the competence of the European Court of Justice and all other institutions and agencies to supervise and enforce EU law will continue for the transition period (Article 131).
There are some areas where new enforcement bodies are created, for instance with regard to State aid law, where the Withdrawal Agreement at Article 9 allows for a national enforcement body, with powers and functions equivalent to those of the European Commission. Although this has yet to be formalised through legislation, the Government has revealed that the Competitions and Markets Authority will take up this role. The Commission will continue to have competence to investigate and recover unlawful State aid granted during the transition period, for a period of four years after this ends (Article 93).
Although the European Union (Withdrawal) Act 2018 became law upon 26 June 2018, it is useful to recap on its provisions given how it underpins and interacts with both the Withdrawal Agreement and the Framework for the Future Relationship.
The main changes brought into law by the Act are:
A short delay to the Brexit timetable has been agreed by the European Union, which Theresa May hopes to use to find a way to get the House of Commons to support the Withdrawal Agreement. It remains to be seen whether this strategy will succeed but if it does then the UK's legal system will change as the European Communities Act 1972 is revoked and an estimated 12,000 regulations are transposed into domestic law (with modifications to address deficiencies). If the Withdrawal Agreement is not ratified, then it is likely that a range of alternative options will be considered by Parliament, each of which has different consequences for the legal system within the United Kingdom.
DWF Law LLP has a breadth of expertise in Brexit related matters. We are able to draw upon a team of leading experts, in our UK, Brussels and other international offices, who have extensive experience in this area, including working within the UK Government on Brexit matters, within the European Commission and helping business leaders quickly adapt to new laws and regulators.