The European Union (Withdrawal) Bill (the 'EUWB') will bring about the most fundamental change to the UK's legal framework since the European Communities Act 1972 that it seeks to repeal. We have previously explained how the Bill works and why it is needed.

In very broad terms, the Bill will repeal the 1972 Act, through which EU law currently takes effect in the UK. However, it will take a snapshot of that law and, with some important omissions, will incorporate it into the UK's domestic legal framework as part of a new category of UK law - 'retained EU law'.

The Bill provides Ministers with a series of powers to then amend retained EU law through regulations, including 'Henry VIII' powers to amend UK primary legislation.

Although the basic premise sounds simple, and follows historical precedents from other jurisdictions, the Bill is both complex and controversial in its detail.

So what amendments have been made to the Bill during its passage through the Commons and what issues remain for the Lords?

Exit day

Many of the provisions in the Bill make use of the concept of 'exit day'. For example, under clause 1, the European Communities Act 1972 will be repealed on exit day. Likewise, the snapshot of EU and domestic law to be retained will be taken on exit day. The power given to Ministers in clause 7 to amend retained EU law so as to ensure its effective operation and to cure any 'deficiencies' is available only for two years after exit day. 

As introduced, exit day was not intended to be tied to the actual day that the EU treaties cease to apply to the UK (currently 29 March 2019). Rather, the Bill enabled Ministers to define exit day in regulations, subject only to the lowest form of Parliamentary scrutiny. Different exit days could be specified in respect of different provisions.

Given the importance of the concept, the breadth and flexibility of the powers given to the government to define exit day was roundly criticised. In response, the government proposed an amendment defining exit day as 29 March 2019 at 11.00pm (clause 14(1)). However, some flexibility is retained through a power to amend this definition where the EU treaties cease to apply to the UK on a date other than 29 March 2019. This will allow for exit day to be changed to facilitate any standstill transition period, or any extension to the two year timeframe for exit under Article 50 of the Treaty on European Union.

Powers to amend retained EU law

Under clause 7(1), Ministers are given controversial powers to amend retained EU law by secondary legislation where the Minister thinks such amendment 'appropriate' to -

'…prevent, remedy or mitigate -

  1. any failure of retained EU law to operate effectively, or
  2. any other deficiency in retained EU law,

arising from the withdrawal of the United Kingdom from the EU.'

A non-exhaustive list of what might be classed as 'deficiencies' was then provided by clause 7(2).

In response to criticisms around the breadth of the power given to Ministers, the government brought forward an amendment which it suggested would make the list of deficiencies in clause 7(2) exhaustive rather than illustrative. However, this was balanced by a new clause 7(3) which states that a deficiency will also include anything that a Minister considers 'of a similar kind' to any deficiency in clause 7(2) which is of a kind described or provided for by regulations.   

As we discussed in our initial analysis of the Bill, the deficiencies listed in clause 7(2) are extremely broad - for example, it includes circumstances in which the Minister considers that 'any reciprocal or other arrangements … are no longer appropriate, as a result of [Brexit]' (clause 7(2)(e)). So, even if clause 7(2) could now be viewed as an exhaustive list, it leaves a great degree of room for controversial policy decisions. But it is not exhaustive, as a Minister can decide that something is 'of a similar kind' to a deficiency in the list, or may even expand the list through regulations.

The government's amendments therefore do little to allay wider concerns around the breadth of the powers given to Ministers to change the law.

Parliamentary oversight

Linked to controversies over the sweeping and unclear nature of such powers are concerns around the lack of Parliamentary scrutiny of how they are used.

As introduced, the default position in the Bill is that regulations made under clause 7 are subject to a negative resolution procedure. Such regulations will be laid before Parliament and will come into force automatically unless either House passes a resolution to annul them.

A limited number of regulations will be subject to an affirmative resolution procedure under which they will need to be positively approved by each House of Parliament. These include regulations creating new public authorities, legislative powers, creating new criminal offences or imposing certain fees.

This means that regulations which include significant policy choices will receive the lowest level of Parliamentary scrutiny and often be subject to no debate.

The problem for Parliament in considering the Bill is that it cannot identify in advance what it might want to look at - and the degree of scrutiny it would wish to apply - in circumstances where it does not know how the powers given to Ministers are going to be used, and indeed Ministers do not know themselves. Although the wish may be for a high degree of scrutiny of a large number of regulations, this will simply not prove possible given the volume of regulations that will be required in a relatively short space of time before exit day.

The Bill has now been amended to insert provisions tabled by the Chair of the Commons Procedure Committee which provide for a sifting committee. The sifting committee will review any draft regulations due to undergo the negative procedure and can require that they instead undergo the affirmative procedure (paragraph 3 of Schedule 7). To aid the review process, the Minister bringing forward the regulations will be required to produce a written statement setting out why the negative procedure is appropriate.

In addition, a further amendment requires that regulations and draft regulations made under either procedure must be laid with Ministerial statements explaining the changes that they make and their effect, as well as a statement that the regulations do 'no more than is appropriate' (paragraph 22, Schedule 7). The Minister is also required to state that he or she has had due regard to the need to eliminate conduct prohibited under the Equality Act 2010, whether the regulations amend, repeal or revoke any provision of equalities legislation and, if so, the effect of this.

Although the amendments provide for a potentially greater use of the affirmative procedure - and the provision of information to support it - that procedure is far from perfect in terms of the democratic oversight that it provides. For example, debates on statutory instruments subject to the affirmative procedure are often very short (the average is 26 minutes) and Parliament cannot amend the proposed instrument, but must vote on a take it or leave it basis. It is therefore unsurprising that the last time that the House of Commons refused to approve an instrument under the affirmative procedure was in 1978, with the Lords being only slightly more willing to withhold approval.

Parliament could, of course, require an enhanced scrutiny procedure - such as that used for legislative reform orders under the Legislative and Regulatory Reform Act 2006. This would allow a committee to recommend changes to draft regulations, and then to report to Parliament on whether approval should be given depending on whether those recommendations are followed. However, it usually takes between 11 and 18 months to pass a regulatory reform order, and this is similar for other enhanced procedures.

Parliament will simply not have the time for such a process in the run up to Brexit. This means that the Lords may be able to do little to improve Parliamentary scrutiny of the regulation making powers and may focus instead on restricting and/or clarifying the circumstances in which those powers can be used.

Implementing the withdrawal agreement

Clause 9 contains a power for Ministers to implement through regulations the withdrawal agreement negotiated by the UK and the remaining members of the EU under Article 50. In the sole defeat for the government during the passage of the Bill thus far - inflicted by former Attorney General, Dominic Grieve - this power is now subject to the prior enactment of a statute by Parliament approving the final terms of the withdrawal agreement.

In an interview with Andrew Marr, the Prime Minister has stated that the intention is for the UK Parliament to vote on the agreement before it goes to the vote European parliament. As the EU Commission's current timetable is for the ratification process to begin in October 2018, it may be that Parliament is asked to vote on the withdrawal agreement shortly after its return from the party conference recess in the autumn.  

Whether that vote is in any way meaningful depends on what options Parliament realistically has if it does not like the terms on offer - would it ask the government to seek something better (and could the government secure it), will it prefer to leave without any agreement at all, or would it seek to reverse out of the Article 50 process and remain in the EU? It may be that although Parliament now has a guarantee that it will be able to debate and criticise the deal that the government brings back, the chances of it voted down that agreement are slim.

Challenges for a breach of the general principles of EU law

In its original form the Bill would remove any right of action on the basis of a failure to comply with any principle of EU law (paragraph 3(1) of Schedule 1). However, a transitional provision has now been introduced which will permit such challenges to be brought within three months of exit day, provided that the challenge relates to anything which occurred before exit day and is not for the purposes of the disapplication or quashing of an Act, enactment or rule of law.

This limited concession on the part of the government must be seen against the wider background of the battles that will be fought in the Lords around the Bill's general approach to rights granted by EU law. Most importantly, the government escaped defeat in the Commons on an amendment which would have frustrated its attempt to remove the Charter of Fundamental Rights from the EU law which is retained on exit day.

However, that was on the basis of its promise to publish its analysis of where the rights found in the Charter will be contained elsewhere in retained EU law. The government has now published that analysis which has been the subject of strident criticism - not least from the Equalities and Human Rights Commission which has published the advice that it has obtained from leading counsel on the issue.  

Next steps

The Bill has now passed to the House of Lords where it received its first reading without debate on 18 January 2018.

It will receive its second reading, with accompanying debate, on 30 January. This will be a good indication for the government as to where Lords' concerns might lie (although concerns have been trailed in various committee reports which have already been published). However, it is only at the Committee stage that amendments will be tabled.

As in the Commons these are likely to be numerous but, unlike in the Commons, the government does not command a majority in the Lords. It will therefore not find it so easy to defend the Bill in its current form and MPs may feel emboldened to accept any Lords' amendments when the Bill returns to the Commons.

The issues of the powers given to Ministers, Parliamentary scrutiny and the protection of rights will again loom large in debates. Another major issue, which the government successfully put off in the Commons, will be the ability of the devolved legislatures to legislate in devolved areas where they are currently restricted by EU law.    

Together with these big ticket issues it is to be hoped that the Lords give detailed consideration to the nuts and bolts drafting of the Bill in order to remove some of the ambiguities that it currently contains.

Given its fundamental importance it is vital that the Bill is fit for purpose and does not necessitate a stream of post-Brexit litigation before individuals and businesses finally obtain the legal certainty that it is intended to provide.