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The Repeal Bill, a transitional deal and staying in the single market

The Repeal Bill, a transitional deal and staying in the single market

By Peter Wilding

Recently Michel Barnier set out the options for a future relationship between the UK and the 27 other EU member states. As he saw it, the best would be for the UK to remain a member of the EU; the second best would be for the UK to be a member of the European Economic Area (EEA) (like Norway and others), and accept the strict conditions for participation in the single market. If the UK opts for neither of those relationships, then – as he saw it – the relationship would have to be a different and inferior one. The issue of the UK’s membership of the EEA is now therefore at the forefront of debate; as is the allied issue of the UK’s continued participation in the customs union.

If HMG seeks a “bespoke” arrangement, whether transitional or permanent, HMG will need to achieve the following:

  1. Passage of the Repeal Bill un-amended by 29th March 2019;
  2. Agreement with the EU on citizen’s rights, the Irish border and the financial settlement by October 2017 (“the divorce issues”);
  3. Agreement on the “bespoke” arrangement by September 2018, so that it can be agreed by the EU Council, the EU Parliament and ratified by the remaining 27 member states.

It is unlikely that these steps will be completed in time. There is therefore a real danger of a “cliff- edge” Brexit if a “bespoke” arrangement is sought (even discounting the possibility of negotiations with the EU collapsing or stalling). It follows that in order for the UK to avoid a “cliff-edge” departure from the EU on 29th March 2019, it must retain (at least for a temporary period) EEA membership and negotiate a customs union arrangement with the EU.

In early 2017 I, together with other claimants, applied to court for a declaration that HMG is legally required to secure parliamentary approval before it can take the UK out of the EEA. The court held that the application was premature, but did not dismiss it on the merits. However, the Repeal Bill potentially changes the legal analysis. The Bill as currently drafted in effect seeks parliamentary consent to amend UK domestic law so that the EU and EEA rights and obligations are no longer automatically effective in the UK.

In the explanatory notes to the Repeal Bill (paras.7 and 6) HMG has also indicated that it considers if the UK leaves the EU it automatically leaves the EEA, implying that the UK does not need to give formal notice under Article 127 of the EEA Agreement to leave the EEA. We disagree, but a UK court would be unlikely to entertain an action on the interpretation of the EEA Agreement if Parliament had already legislated that the EEA Agreement (and the EU Treaty) should no longer have domestic effect in the UK; which will be the effect of the Repeal Bill if it is passed un-amended. Further, unless the Repeal Bill is amended, it is still open to HMG to give notice under Article 127 if subsequently it considers it necessary.

The upshot is that, now more than ever, if the UK is to remain in the EEA, the political/parliamentary process is paramount. The Repeal Bill has to be amended so that it does not end the domestic effect of EEA membership and/or the mechanism by which the UK can implement EEA rights and obligations into UK domestic law.