The Government took the first step to implementing one of its key Brexit policies today. The long-awaited Repeal Bill, formally named the European Union (Withdrawal) Bill, which was first announced in October last year, has been published for its First Reading in the House of Commons.
The principal aim of the Bill is to transpose EU law into UK law, where practically possible, on withdrawal, thereby retaining all rules derived from EU law as they currently apply.
With regard to the interpretation of those rules, the Repeal Bill removes the binding effect of future CJEU case law and the application of the principle of the supremacy of EU law in respect of legislation enacted post-Brexit. It requires UK courts to interpret retained EU law by reference to historic CJEU case law, as it exists on the day of withdrawal. Historic CJEU case law is to be binding on all UK courts with the exception of the Supreme Court and, in some cases, Scotland's supreme criminal court, the High Court of Justiciary. UK courts may have regard to, but will not be bound by, decisions of the CJEU or any other EU entity made on or after exit day.
As explained in our previous blog post of 11 July, there are practical difficulties with converting EU law into domestic law. Much of EU law provides for the involvement of EU institutions or agencies or is predicated on the UK's membership of an existing EU system or regime. In these areas, the conversion of EU law into UK law will be unworkable without appropriate amendments, for example, to provide for the establishment of a replacement domestic body or regime.
In response to these problems, as expected, the Repeal Bill provides for so-called "Henry VIII clauses", which empower the Government to introduce secondary legislation amending domestic primary and secondary legislation to the extent necessary to take account of Brexit. Clauses 7-9 grant Government the power to make regulations that:
(a) deal with deficiencies in retained EU law arising from withdrawal (clause 7);
(b) remedy any breach of the UK's international obligations caused by withdrawal (clause 8); and
(c) implement the terms of the withdrawal agreement reached with the EU (clause 9).
The Government is given a period of two years from exit day to make the necessary changes.
These powers will no doubt be considered carefully by MPs and peers given concerns that they could be used by Government to introduce policy changes through secondary legislation, bypassing the usual level of parliamentary scrutiny, and their scope will likely prove the most debated and controversial aspect of the Bill.
In recognition of this controversy, Schedule 7 of the Bill makes provision for parliamentary scrutiny of the Henry VIII powers by providing for a requirement that regulations made under clauses 7-9 must be approved by a resolution of each House of Parliament where those regulations meet certain conditions, for example, where they create a new public body. However, this requirement will not apply in cases the Government considers "urgent". In circumstances where the requirement for express parliamentary approval does not apply, the regulations will be subject to the negative resolution procedure and will become law automatically unless either House passes a resolution that annuls them.
In contrast to the Henry VIII powers in clauses 7-9, which are limited to some degree by their specified purpose, the more general power provided for by clause 17 empowers Ministers to, by regulations, make such provision as "the Minister considers appropriate in consequence of the Act". This clause may therefore be the most controversial as it appears to allow the Government significant room to make policy choices by way of legislation that will be subject to the negative resolution procedure and will not therefore be expressly approved by Parliament.
While the mechanisms for parliamentary scrutiny included in the Bill seek to somewhat mitigate criticism of wide ranging Henry VIII powers, they also give rise to a separate problem; a real risk of political gridlock as regards both the retention of existing EU law and the implementation of the terms of a withdrawal deal with the EU. As a result, the prospects of the smoothest possible transition out of the EU are reduced.
Where Parliament loses the ability to scrutinise legislation, judicial review claims challenging the lawfulness of regulations introduced on the basis of Henry VIII clauses would provide an alternative check on Government decision-making. A key question will be how the courts will interpret terms such as "deficiency in retained EU law", as contained in clause 7.
The process of analysing the Bill in depth begins now, although it will not be debated or voted on in Parliament until its Second Reading in the autumn. Given the importance of its enactment to ensuring an orderly Brexit, it seems likely that the Bill will be enacted in some form. However, opposition parties, reinvigorated after the general election result, have already made it clear that the Government may face a much tougher test in passing the Repeal Bill than it has done previously in relation to Brexit.
It will be essential for businesses to be alive to the detail of regulations made under the Bill to ensure that their interests are protected in a fast moving environment. Given the mechanisms for parliamentary scrutiny, they should be engaging with MPs as well as Ministers and should take a coordinated, rather than item by item, approach to ensure the most effective engagement.
Charles Brasted, partner in our Public Law and Policy team, said:
"The Repeal Bill is a crucial part of delivering Brexit. While its underlying mechanism of preserving first and amending where necessary is sound, the scope of powers that the government is seeking to introduce to change law without full parliamentary scrutiny will be highly contentious. Where parliamentary scrutiny is more limited, it is inevitable that those affected will look to the courts to review Government's choices about the terms of the agreement being implemented and about the details of legislation that have a material effect."