Commons Paper WAB Transition Period – Brexit

Withdrawal Agreement Bill: Implementing the transition period

October 22, 2019 Graeme Cowie

A core part of the Withdrawal Agreement is that there shall be a “transition or implementation period” under Article 126. This period begins when the UK leaves the EU and ends, by default on 31 December 2020. However the UK and EU can jointly agree, on a one-off basis, to extend that period by a further period of ‘up to two-years,’ under Article 132.

During the transition period, the UK has to follow most of EU law in (mostly) the same way as it does now as a Member State. However, it will no longer have representation and voting rights in the EU institutions when the EU makes decisions about how EU law should change. There are some exceptions to this continuation of EU law, which are set out in the Withdrawal Agreement itself.

This Insight explains how the EU (Withdrawal Agreement) Bill (the ‘WAB’) proposes to change domestic law to ensure that the transition period is honoured by the UK. It also explains what role Parliament would be given if the UK, for whatever reason, wished to extend that transition period beyond 2020.

Why does the WAB have to legislate for transition?

At the moment EU law is given effect in domestic law through implementing legislation. The main implementing legislation, section 2 of the European Communities Act 1972 (ECA), gives effect to EU law on a dynamic basis. This means that if any EU law changes that the UK is not required to turn into domestic legislation first, it nonetheless automatically has to be applied by the UK courts. Under the principle of supremacy of EU law, priority is also given to EU law where domestic law would be incompatible with it.

Section 1 of the European Union (Withdrawal) Act 2018 repeals the ECA “on exit day”. This is incompatible with the transition period because (among other reasons):

UK law would no longer dynamically track EU law
UK courts would no longer be able to make references on points of EU law to the Court of Justice of the European Union (CJEU) and
the main legal mechanism by which the UK meets its financial obligations to the EU would lapse.

How does the WAB legislate for transition?

Clause 1 of the WAB inserts a new section 1A into the European Union (Withdrawal) Act 2018. This new section does two things. Firstly, for almost all practical purposes it delays the repeal of the ECA until the end of the transition period. However, it achieves this by a convoluted mechanism: giving the ECA continued effect for transition ‘despite’ its repeal on exit day. For example, UK law would continue to track applicable EU law dynamically as before and UK courts would continue to be able to refer matters to the CJEU until the end of the transition period. Secondly section 1A updates the definition of the EU Treaties in the ECA:

to include the Withdrawal Agreement itself
to include any relevant EU treaties that enter into force during the transition period, and
to reflect the fact that the UK is enforcing EU law because of the Withdrawal Agreement, and not in the capacity of a Member State.

There is, however, one part of the ECA the effect of which is not preserved past exit day: section 2(3). This has been the legal basis for the UK honouring its financial obligations under the EU Treaties. Financial obligations will instead be dealt with in a separate part of the WAB, under clause 20.

What other provision does the WAB make about transition?

There are several consequences that follow on from delaying the repeal of the ECA until the end of the transition period.

Firstly, it means that EU-derived domestic legislation, such as regulations made under the ECA, also needs to be preserved. Clause 2 of the WAB (which inserts section 1B to the 2018 Act) explains that this body of law is to have effect in domestic law during the transition period in much the same way as it does now. However, that legislation is to be interpreted slightly differently to reflect that the UK is no longer a Member State. The UK therefore follows EU law by virtue of the Withdrawal Agreement, not the EU Treaties themselves.

Clauses 3 and 4 (which insert section 8A and Part 1A to Schedule 2 of the 2018 Act) allow for the UK Government and devolved authorities (respectively) to modify domestic law to ensure coherence to that end. These changes are mostly technical in nature and seem unlikely fundamentally to alter how EU law applies to the UK in practice.

The conversion of various sources of EU law into retained EU law (provided for in the 2018 Act) is also postponed until the end of transition. Any changes to EU law that take effect during the transition period will therefore also form part of retained EU law. This is covered by clauses 25 and 26.

The power to correct deficiencies in retained EU law (contained in section 8 of the 2018 Act) currently expires two years after exit day. Clause 27 states that it will instead expire two years after the transition period has ended.

How can the transition period be extended?

Under Article 132 of the Withdrawal Agreement, the UK-EU Joint Committee can adopt a single decision extending the transition period for ‘up to two-years’.

The Withdrawal Agreement is silent as to what role, if any, Parliament should have in extending the transition period. Had the WAB been silent on this matter, the UK Government would have had a free choice as to when, whether, and for how long, to seek an extension of the transition period.

However, clause 30 of the WAB would give the Commons a veto over any proposed extension. The Government can agree an extension in the Joint Committee “only if” the Commons has passed a motion agreeing to the proposed extension. The Lords must also have had the chance to debate the proposal. This approach does not enable MPs to take the initiative to propose an extension, or to require the Government to agree to one. It leaves the initiative of asking and agreeing to the Government.

Why does the WAB have to legislate for transition?

How does the WAB legislate for transition?

What other provision does the WAB make about transition?

How can the transition period be extended?

Further reading