A recently published article, Brexit: What to make of Directives?, queried the present lack of clarity in the European Union (Withdrawal) Bill as regards the failure to include EU Directives as part of ‘retained EU law’ post-Brexit and the doubts that this raises about the Government’s plan to create UK-wide frameworks (e.g., for environmental protection) based upon those presently contained in EU Directives.

In addition to these doubts, the failure to include EU Directives (and, for that matter, EU Treaty provisions) within the ‘retained EU law’ regime also potentially raises some important questions about the operation of the devolution settlement – at least in Scotland – post-Brexit.

The ‘retained EU law’ concept as applied to devolved competence As mentioned before, clauses 2 to 5 of the Bill deal with the incorporation of existing EU law into UK domestic law to create a new body of, so called, ‘retained EU law’ which comprises: (a) any EU-derived domestic legislation on the UK statute book when Brexit occurs (which would implicitly include any UK legislation implementing a Directive) (clause 2), (b) any directly applicable EU Regulations and EU Decisions which apply in the UK on Brexit day (clause 3); and (c) any EU rights, powers, liabilities, obligations, restrictions, remedies and procedures recognised in domestic law at Brexit (excluding, among other things, rights etc., arising under EU Directives) by virtue of s.2(2) of the European Communities Act 1972 (clause 4).

Clause 11 of the Bill (Retaining EU restrictions in devolution legislation etc.) amends the limitations on legislative competence in the Scottish, Welsh and Northern Irish devolution statutes to take account of Brexit.

Taking the example of Scotland, sub-clause (1), amends s.29(2)(d) of the Scotland Act, which presently prohibits the Scottish Parliament from legislating in a manner which is, ‘incompatible with EU law’, so that instead it will post-Brexit prohibit the Parliament from passing laws which, ‘modify, or confer power by subordinate legislation to modify, retained EU law’.

Implications for future policy/legislative divergence Thus, taking account of the definition of ‘retained EU law’ (which, as we have seen, excludes EU Directives), this means that the Scottish Parliament appears to gain (as opposed to lose) legislative freedom by virtue of clause 11 of the Bill, to the extent that it might wish to legislate, post-Brexit, in a manner inconsistent with a policy position that, immediately pre-Brexit, was expressed in EU Directive.

To pick a random example, Article 9 of the Water Framework Directive presently requires Member States to have, ‘water-pricing policies [which] provide adequate incentives for users to use water resources efficiently’. Whilst s.29 of the Scotland Act presently prevents the Scottish Parliament from legislating incompatibly with Article 9 of the Directive, the amendments to s.29 under the Bill mean that, post-Brexit, the Parliament would in principle (and putting aside any other constraints) be able to abolish water charging since, of course, the Directive would not form part of ‘retained EU law’.

Such a possibility, particularly when one considers the importance of water charges to large industrial water users, seems to raise the prospect of exactly the sort of distortion to intra-UK competition which the Government itself described as unwelcome and which, in its own white paper on the Bill, it said that it would not permit.