The Queen’s Speech (the “Speech”), given on 21 June 2017, appears to realign the Government’s Brexit negotiation priorities with the agenda set out by Theresa May in her Lancaster House speech (from 17 January 2017) as was recently indicated by Philip Hammond during a speech at Mansion House (from 20 June 2017).
The Speech announced 24 Bills, eight of which are specifically focused on “Delivering Brexit”.
At the heart of the Brexit Bills was the long-awaited announcement of the so-called “Great Repeal Bill” which will repeal the European Communities Act 1972, convert EU law into UK law and empower Parliament to correct any laws which do not work in the absence of the EU framework. This is an enormous task which should not be underestimated, as there are around 40,000 pieces of legislation which will consequently need to be unpicked and amended. The wording of the Bill will shed more light on how the process will be carried out (for example, whether any agencies will be set up to supervise different aspects of the process). The Speech also listed seven further pieces of legislation which will end the jurisdiction of the EU and will introduce national policies in a number of key areas, including:
Trade, Customs and Sanctions
- One area we now have further clarity on is Customs: the government’s intention is that we will be leaving the Customs Union and the Government will introduce a Customs Bill to provide standalone customs, VAT and excise regimes following Brexit. UK customs legislation will be mostly based on existing EU law, which will provide continuity for businesses. The Bill will provide the UK with the ability to charge customs duties on imported goods, adjust duty rates, accommodate potential negotiated arrangements with the EU and negotiate new trade agreements with third countries. The contents of the Speech reinforced the notion that the objective for the UK is to negotiate a Free Trade Agreement with the EU. However, as a result of this, UK businesses would face greater barriers to trade with the EU-27 member states than if the UK were to remain part of the Customs Union or the Single Market.
- The Government will also introduce a Trade Bill, which is intended to “cement” the UK’s status as a leading trading nation and lay the blueprint for an independent trade policy to protect UK business from unfair trading practices (presumably anti-dumping, subsidies and surges in imports to be dealt with by safeguard measures). At this stage, the Government has provided little clarity on what this means in practice, since the nature of the UK’s trade policy, and how independent it will ultimately prove to be, are subject to the outcome of the Brexit negotiations.
- The Government also intends to introduce an International Sanctions Bill to enable the UK to comply with UN sanctions and establish decision-making powers to introduce its own sanctions and pursue its own trade policy beyond this. Previously, sanctions have been implemented through the adoption of EU Regulations under the European Communities Act 1972. After Brexit, the UK will need to significantly increase its oversight in all aspects of legislation and enforcement to ensure it complies with its obligations under international law.
- The Government has announced an end to free movement whilst allowing the country to attract “the brightest and the best”, which provides little in the way of much-needed clarity for employers and EU-27 nationals. This area must be made a priority to avoid a potentially huge skills shortage. We have seen from our own recent research that a significant number of skilled EU nationals are likely to leave the UK regardless of the Brexit deal which is ultimately agreed and this announcement seems unlikely to change their minds.
- The Government plans to introduce a Nuclear Safeguards Bill, supplemented by new policies in this area. The purpose of this is to provide for the UK’s own safeguards regime in place of the EU one (which will likely be lost as a result of exit from the EU and Euratom). This is necessary in order for the UK to meet its international obligations on safeguards and to enable the UK to enter into co-operation agreements in future with third countries (and, depending on negotiations, with the EU itself). This in and of itself though does not enable the UK to automatically draw the benefit of the cooperation agreements with third countries it currently enjoys as part Euratom membership. These agreements shall still likely have to be negotiated (or the existing ones amended). This is of critical importance to UK businesses currently engaged in nuclear projects in conjunction with overseas suppliers, operators, partners or other third parties.
- Part of the Bill and supporting policy framework anticipates providing for the UK Office for Nuclear Regulation (the “ONR”) to regulate safeguards further. This is something currently undertaken in large part by the European Commission. The transfer of these responsibilities is likely to be a significant undertaking, and may result in certain additional administrative burdens for businesses in the UK.
Above all, it is important to recognise that any Brexit agenda outlined by the Government at this stage is entirely contingent on the outcome of two years of negotiation with the EU. Theresa May’s Government has published a Queen’s Speech which appears to refute recent speculation that she would pursue a “softer” Brexit, however there is no guarantee that this will be the final word on the issue.
- The Government has announced proposals for a new Data Protection Bill which aims to ensure that the UK retains a robust regime for the protection of personal data, including proposals for a new digital charter to make the UK “the safest place to be online”. In a document further detailing its plans, the Government stated its intention to give individuals more control over their personal information (including a “right to be forgotten” where individuals no longer wish their information to be processed); establish a new data protection regime for data processing not related to law enforcement; and modernise and update the regime for data processing by law enforcement agencies. The Government also said that it would implement the new EU General Data Protection Regulation, which is due to come into force in 2018, confirming a long held understanding that the UK data protection regime will remain closely aligned to the EU regime in the short to medium term notwithstanding Brexit.
- The Government will be introducing the EU (Approvals) Bill, which will implement changes to international agreements between the EU and non-EU countries. This will allow the UK to continue to fulfil its EU obligations whilst the UK is still a member of the EU. This Bill will allow the EU to agree greater cooperation between the competition authorities of the EU and Canada. This will allow competition authorities to share evidence collected during competition investigations to help prevent anti-competitive practices.
- The Government has announced new proposals to intervene in acquisitions by foreign companies that could raise national security concerns in the UK. The proposals will ensure that the Government has the information it needs to assess threats to national security and the powers to act on them. There are no details on how the assessment will be carried out and by which body, but it appears that the Government is intent on introducing a new regulatory regime for deals that impact on national security.
- A key theme of the speech was an agenda based on innovation. This includes a Space Industry Bill that will license a wide range of new commercial spaceflight and create a regulatory framework to manage risk, as well as a Bill to put the UK at the forefront of developing new technology in electric and automated road vehicles. The Government clearly wants to set out a positive and technically advanced vision of the UK’s post Brexit economy.