On 13 July, the Government introduced the European Union (Withdrawal) Bill (the "Repeal Bill") to the House of Commons. This legislation repeals the European Communities Act 1972 whilst at the same time effectively "copying and pasting" all applicable EU law into the UK statute book.

What does the Repeal Bill do?

The key changes brought about by the Repeal Bill include:

  • Conversion of EU law: the Repeal Bill repeals the European Communities Act 1972 but incorporates into UK law all applicable EU law as at the date of exit, including directly applicable Regulations and Treaty articles. It also preserves UK laws which have implemented EU legislation.
  • "Henry VIII" powers: somewhat controversially, the Repeal Bill gives the Government wide-ranging "Henry VIII" powers to amend such EU-derived laws (see below).
  • Interpretation of EU-derived law: the Repeal Bill sets out the principles that UK courts must apply when deciding on questions involving EU-derived law (including that pre-Brexit CJEU rulings are to have the same status as prior Supreme Court decisions).
  • CJEU case law: post-Brexit, UK courts will no longer be bound by any decisions made by the CJEU after withdrawal and will no longer be able to refer any matters to the CJEU.

What is its key impact for business?

The Repeal Bill is welcome in the sense that it should avoid major gaps opening up in the UK legislative framework and ensure that the regime for businesses operating in the UK remains largely unchanged in the short term.

That said, the Repeal Bill does not answer a number of key questions for business, such as:

  • What access will UK businesses have to EU markets after Brexit?
  • Will UK businesses which rely on EU-based suppliers be exposed to significant disruption and/or higher costs as a result of Brexit?

These will require agreement with the EU and the outcome on these issues remains highly uncertain. Our advice to businesses continues to be that they should hope for the best, but plan for the worst. See our Brexit contingency planning checklist and our commercial contracts Brexit review service.

What are "Henry VIII" powers and how do they work?

"Henry VIII powers" allow the Government to use Statutory Instruments ("SIs") to amend EU-derived law without full Parliamentary scrutiny.

The Government's exercise of these powers under the Repeal Bill is limited to correcting "deficiencies" in EU-derived law – i.e. parts of EU law that are unworkable in their current form because, for example, they refer to EU regulators that the UK will no longer recognise post-Brexit or to rules which will no longer apply to the UK.

The time period during which the Government can exercise these powers is also limited to the two-year period following the date of exit – although, given the scale of the exercise, it may need to seek an extension of this period (see below).

So why are the "Henry VIII" powers so controversial?

Acts of Parliament frequently confer powers on Ministers to make more detailed orders or regulations by means of SIs, with roughly 3,500 SIs made each year, many of which simply become law on the date stated. However, given the volume of EU legislation and the amendments required to retained EU law (the Government's White Paper estimated that 800-1,000 SIs will be required), the scale of the use of such powers is likely to be unprecedented.

The powers themselves are also likely to prove politically controversial since the current drafting arguably allows Ministers significant discretion on the key question of when a "deficiency" arises.

How long will it take to review all EU-derived law?

The Repeal Bill is only the first phase in what is likely to be a protracted and time-consuming exercise of reviewing EU-derived law. The closest parallels are:

  • EU Accession: Accession countries typically need around 5-10 years to make the legislative changes required for EU membership; undertaking the process in reverse is likely to take at least as long.
  • Post-independence: The post-independence experience of countries such as Ireland and India – which are still reviewing their statute books more than 50 years later to remove or modify certain pre-independence laws – suggests that the process of "de-Europeanising" UK law could take considerably longer.

Having said that, the Government can and should prioritise certain areas over others. In addition, depending on the outcome of the talks on the future UK-EU trading relationship, there may be many areas where the UK either commits to aligning itself with EU law or chooses to do so in order to secure market access (in which case there may be no need for significant change in these particular areas).

What happens next?

The Repeal Bill will need to pass through both Houses of Parliament before receiving Royal Assent, and is expected to face significant political opposition, not least in relation to the "Henry VIII powers" described above. The Government's negotiations with the EU will be taking place in parallel and will likely shape the UK's post-Brexit laws.

Separately, the Government is due to introduce further bills over the next session of Parliament as referred to in the Queen's Speech (e.g. in relation to customs, immigration, trade, fisheries and agriculture); see further "The new political landscape: impact on Brexit contingency planning."