April Brexit Briefing

  • Insight

20 April 2017

Article 50 has been triggered and we are heading for a UK General Election – what next?

On 29 March 2017, the UK Prime Minister wrote to the President of the European Council, giving formal notification under Article 50 of the UK’s withdrawal from the EU. This briefing provides a summary of recent political developments, including the announcement that there will be a UK General Election on 8 June 2017; and some of the legal issues emerging.

Article 50 letter from the Prime Minister to the President of the European Council, Donald Tusk

On 29 March 2017, the UK Prime Minister, Theresa May wrote to the President of the European Council, Donald Tusk, giving formal notification under Article 50(2) of the UK’s withdrawal from the Treaty on the European Union as well as the UK’s withdrawal from the European Atomic Energy Community. This notification followed the referendum in the UK on 23 June 2016 and the subsequent passing of the European Union (Notification of Withdrawal) Act 2017 by the UK Parliament.

The Prime Minister’s six-page letter proposed a “deep and special partnership” between the UK and the EU, emphasising the need for economic and security cooperation. The Prime Minister emphasised security concerns as an incentive for reaching an agreement within the two-year period required under Article 50. The letter noted that the UK’s default position without an agreement with the EU would be the UK trading on World Trade Organisation terms. For more information on trading under WTO rules, the House of Lords has published a helpful briefing note: Leaving the EU: World Trading Organisation.

In terms of the withdrawal procedure as it will happen in the UK, the PM’s letter outlined the UK Government’s intention to repeal the legislation giving effect to EU law in the UK noting that, wherever “practical and appropriate”, existing EU law will be converted into UK law. The letter also stated that the UK will negotiate as “one United Kingdom, taking due account of the specific interests of every nation and region of the UK as we do so”.  The letter indicated that the UK Government would consult fully on which powers should reside in Westminster and which should be devolved to Scotland, Wales and Northern Ireland. The PM has stated that it is the expectation of the UK Government that there will be a significant increase in the decision-making power of each devolved administration, without giving any firm commitments in specific areas.

Finally, the PM’s letter proposed a number principles relating to the UK Government’s negotiating positon: it does not intend to seek membership of the single market; it will seek early agreement about the rights of EU/UK citizens in the UK; it wants to avoid a hard border between Northern Ireland and the Republic of Ireland by maintaining the Common Travel Area; and it proposes a “bold and ambitious” Free Trade Agreement between the UK and EU.

Response by European Council

In Donald Tusk’s response to the PM’s notification letter, he noted that, for the EU, the first step will be the adoption of guidelines for negotiations. Mr Tusk stated that the EU hoped to have the UK as a close partner in the future, but that the first priority for the EU would be to minimise the uncertainty caused by the UK’s decision for the EU’s citizens, businesses and Member States. Mr Tusk also noted that the EU expects the UK to agree to the terms of the UK’s departure, e.g. the bill the UK will pay to leave the EU, before it negotiates a trade deal.

Mr Tusk has proposed draft negotiating guidelines to the 27 EU leaders during a recent European Council meeting in Malta. Remarking on the next steps, Mr Tusk highlighted four key elements and principles in the guidelines: (i) putting people first; (ii) preventing a legal vacuum for companies; (iii) making sure the UK honours its financial commitments to the EU; and (iv) seeking flexible and creative solutions to avoid a hard border between Northern Ireland and Ireland.

Mr Tusk’s draft guidelines, among other things, state that any free trade agreement between the UK and the EU cannot amount to participation in the single market or parts of it and, that after the UK leaves the EU, no agreement between the EU and the UK may apply to the territory of Gibraltar without agreement between Spain and the UK. These guidelines will be adopted by the European Council, in EU27 format (without the UK), on 29 April 2017. This final point about Gibraltar has provoked a number of comments from the UK Government and the Government of Gibraltar in relation to the sovereignty of Gibraltar.

Announcement of UK General Election – to take place on 8 June 2017

Until Tuesday 18 April 2017, Theresa May’s publicly stated position was that she would not seek to call a General Election in advance of the next fixed term election in 2020. However, on Wednesday  19 April 2017, she sought and obtained more than the required two thirds majority of MPs voting in the House of Commons for a ‘snap’ UK General Election on 8 June 2017. The PM stated that: "I have concluded the only way to guarantee certainty and security for years ahead is to hold this election." She indicated that, in her view, holding a UK General Election in June 2017 would provide an opportunity for political parties to “put forward our plans for Brexit and our alternative programmes for government and then let the people decide”. She noted that: "I have only recently and reluctantly come to this conclusion. Since I became Prime Minister I've said there should be no election until 2020, but now I have concluded that the only way to guarantee certainty and security for the years ahead is to hold this election and seek your support for the decisions we must take."

In her immediate response to the PM’s statement, Scotland's First Minister Nicola Sturgeon said she would be fighting the UK General Election to win. She stated: "I think the Prime Minister has called this election for selfish, narrow, party political interests, but she has called it and therefore I relish the prospect of getting out to stand up for Scotland's interests and values, standing up for Scotland's voice being heard and standing against the ability of a right-wing Conservative Party to impose whatever policies it wants on Scotland." The First Minister stated that: “now is the time for Scotland's voice to be heard, and for people in Scotland to stand up for the kind of country we want Scotland to be - that is the campaign I look forward to leading in the weeks ahead."  She commented that the SNP’s position on a second Scottish Independence referendum was: "clear, and will continue to be clear throughout this campaign… It is that, when the time is right, it should be for Scotland to determine our own future, not for a Tory government to determine that future for us”. She also noted that the SNP Government had already won a mandate for a second Scottish Independence referendum in the Scottish General Election in 2016, in light of the result of the EU Referendum in Scotland.

Labour Leader Jeremy Corbyn indicated that a General Election in June 2017 would "give the British people the chance to vote for a Government that will put the interests of the majority first". He stated that: “I want to lead a government that will transform this country, give real hope to everybody and above all bring about a principle of justice for everybody and economic opportunities for everybody."

Liberal Democrat Leader, Tim Farron indicated that he saw the UK General Election as a chance to change the direction of the UK. He stated: “If you want to avoid a disastrous hard Brexit. If you want to keep Britain in the single market. If you want a Britain that is open, tolerant and united, this is your chance."

European Council President Donald Tusk said the other 27 EU Member States would continue to move ahead with Brexit and that a UK General Election on 8 June 2017 would not change their approach. He indicated: "We expect to have the Brexit guidelines adopted by the European Council on 29 April and following that the Brexit negotiating directives ready on 22 May. This will allow the EU27 to start negotiations."

White Paper & The Great Repeal Bill

On 30 March 2017, the UK Government published the White Paper, ‘Legislating for the United Kingdom’s withdrawal from the European Union’, setting out the UK Government’s position on delivering the referendum result, including the Great Repeal Bill and the interaction with the devolution settlements.

The Great Repeal Bill would repeal the European Communities Act 1972, which gives effect to the EU treaties in UK law. The Bill would also convert directly-applicable EU laws into UK law and preserve laws made in the UK to implement EU obligations. The White Paper states that the Great Repeal Bill would also provide a power to correct legislation to rectify problems occurring as a consequence of leaving the EU. However, the UK Government’s position is that not all law/rights emanating from EU law would be preserved and indicated that the EU Charter of Fundamental Rights would not be converted into UK law by the Great Repeal Bill. The White Paper also deals with the proposed interaction with the devolution settlements, indicating that when devolved powers currently dealt with under EU common policy frameworks, such as agriculture, environment and some transport issues, are repatriated, this may require a UK approach. This has led to concerns about the ‘reservation’ by the UK Government of areas that are currently the responsibility of the devolved Parliaments and devolved Governments.

The Great Repeal Bill raises a number of constitutional and legal issues including in relation to the scope of power conferred on the UK Government to amend primary legislation using secondary legislation and the involvement of the devolved legislatures and impact on their constitutional settlements.

These issues are raised, to some extent, in the House of Commons Committee for Exiting the EU’s Report on the UK Government’s negotiation objectives.

A second referendum on Scottish Independence

On 28 March 2017, the Scottish Parliament voted by a majority of 69-59 MSPs to take forward discussions with the UK Government on the details of an order under Section 30 of the Scotland Act 1998, so that the Scottish Parliament can legislate for a Scottish Independence referendum, to take place between the Autumn of 2018 and Spring 2019. The Scottish Government’s position is that a second referendum should be held once the terms of the final Brexit deal are known and before Scotland (as part of the UK) leaves the EU.

On 31 March 2017, the First Minister wrote a letter to the Prime Minister setting out the Scottish Government’s position in relation to a second Scottish Independence referendum and sought  discussions about a Section 30 order under the Scotland Act 1998. A Section 30 Order is the mechanism under the Scotland Act 1998 by which the UK Parliament temporarily transfers power to the Scottish Parliament to allow for the exercise of power by the Scottish Parliament over what would normally be a power reserved to Westminster. One such reserved power is the Constitution, which includes the Union of the Kingdoms of Scotland and England. The Scottish Parliament legislation providing for the 2014 Independence Referendum was preceded by a Section 30 Order agreed by both the UK and Scottish Parliaments.  

To date, the UK Prime Minister’s response has been that ‘now is not the time’ to hold another independence referendum. The Scottish Government has indicated that it does not consider this position to be sustainable. There has also been some debate as to whether the Scottish Government could seek to hold an ‘advisory referendum’, i.e. proceed with referendum legislation in the Scottish Parliament without consent of the UK Government, despite the potential challenges in terms of legislative competence. At this point, the Scottish Government has not given any indication that it intends to proceed with a referendum without a Section 30 Order.

Scotland in the EU

Currently tied to the question of a second Scottish Independence referendum is the question of how Scotland might retain its place in the EU and the position that the remaining 27 EU Members States would take towards EU membership of an independent Scotland. It has been reported that 50 senior European politicians, including 26 MEPs, have written to the Presiding Officer of the Scottish Parliament pledging their support for EU membership for an independent Scotland. They have indicated their full support to ensure the transition is as swift, smooth and orderly as possible. Earlier this month, Spain’s Foreign Minister Alfonso Dastis confirmed that Spain would not veto an independent Scotland joining the EU.

Continuing uncertainties ahead

How matters now develop, both in terms of the UK’s exit from the EU and the Scottish Government’s plans for a second Scottish Independence referendum, very much depend on political factors. The legal framework for the UK‘s withdrawal from the EU is skeletal. Article 50 only provides that the agreement is to set out arrangements for the UK’s withdrawal, taking account of the framework for the UK’s future relationship with the EU. The details of any agreement depend on the outcome of negotiations between the UK and the European Council on behalf of the EU. We have already seen that there are some differences in the principles for negotiation and this is just the beginning of a two-year process.

Following the vote of the Scottish Parliament for a second Scottish Independence referendum and the UK Government’s immediate response, questions remain over the timing of a Section 30 Order and a Scottish Independence referendum. However, the SNP does not need to seek a mandate for a second Scottish Independence referendum in the General Election on 8 June as it already has a mandate stemming from its Scottish General Election manifesto in 2016. Indeed, it could be a political mistake for it to seek a fresh mandate, given that it already holds 56 of the 59 Scottish parliamentary seats at Westminster and that it may not be possible for it to increase its representation at Westminster any further and it may experience a reduction in MPs in the General Election.

The uncertainties about the terms of the UK’s departure from the EU and Scotland’s future direction have increased with the UK Government’s announcement of a General Election on 8 June 2017. The UK General Election seems unlikely to bring greater clarity about the deal that the UK will strike with the rest of Europe over the next two years but, if the current opinion polls are accurate, the Conservatives could well increase their overall majority in the UK Parliament, raising concerns in some quarters that the UK Government could seek to quell any parliamentary opposition to and scrutiny of a ‘hard Brexit’ deal.

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