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Another week of Brexit developments: 5 – 11 July 2016

11 July 2016
Following on from last week's comments from Donald Tusk and Jean-Claude Juncker about when the EU expects the UK to trigger Article 50 of the Treaty on the European Union, comments by British officials in the last week have shed further light on the road to Brexit ahead.

What are the UK's "constitutional requirements" for triggering Article 50?

Article 50 provides that "any Member State can decide to withdraw from the Union in accordance with its own constitutional requirements" and "a Member State which decides to withdraw shall notify the European Council of its intention".  There is currently much debate in public law circles about what the UK's "constitutional requirements" are for triggering Article 50; in particular, whether the UK Government is legally prevented from triggering Article 50 without prior Parliamentary approval (or even an Act of Parliament), or whether it is a matter of politics and constitutional principle (which is a more flexible concept than "pure law", given the UK's unwritten constitution).  Reports have emerged this week of a number of legal actions before the English courts seeking clarification about what the constitutional requirements for triggering Article 50 amount to as a matter of UK constitutional law.

Oliver Letwin MP, the Chancellor of the Duchy of Lancaster and Minister with overall responsibility for the Cabinet Office of the UK Government, in evidence given to the Foreign Affairs Committee of the House of Commons (the "FAC") on 5 July 2016, stated that triggering Article 50 would be a matter for the next Prime Minister and that he had been advised by Government lawyers that it was an exercise of the royal prerogative (the accumulated customary powers vested in the executive arm of the Crown over hundreds of years).  He would not comment on whether the exercise of the prerogative was limited by the need for prior Parliamentary approval.

Mr Letwin did go on say that he thought the debate was "entirely academic" because "in order to exit the European Union, as well as reaching various external agreements, we very clearly will need either to repeal or substantially amend the European Communities Act. That requires action from both Houses of Parliament in primary legislation, and I don’t have the slightest doubt… that in the course of debating that legislation, questions about article 50, among many others, will be debated, inevitably".

What is not clear from these comments is whether Mr Letwin meant that (a) Parliament's involvement is not strictly required at the Article 50 stage (ie this is for the Government alone), but that Parliament will be involved when the European Communities Act 1972 ("ECA 1972") is considered for repeal and therefore should play some sort of role before that; or (b) the possible repeal of the ECA 1972 will be debated by Parliament before Article 50 is triggered, and that Parliament will consider Art 50 as part of that wider debate.

The problem with (b) above is that, until Brexit takes effect (potentially some time away), the UK remains subject to EU law.  Therefore, repealing or amending the ECA 1972, which gives domestic legal effect to the UK's constitutional relationship with the EU as a matter of UK law, before Brexit takes effect would risk the UK breaching its EU law obligations

Ultimately, the answer to this debate is likely to be overtaken by events, however, as – irrespective of the position in law – the UK Government will be under considerable political pressure to hold a vote in Parliament before triggering Article 50.

How might the Conservative Party leadership contest affect the withdrawal negotiations?

In last week's blog, we set out the positions of each of the five candidates for the next UK Prime Minister in respect of triggering Article 50.  The field has now narrowed to two: the Home Secretary, Theresa May MP and the Minister of State for Energy, Angela Leadsom MP.

The two remaining candidates  will now campaign over the summer before, for the first time in British history, approximately 150,000 Conservative Party members will choose who will be the next UK Prime Minister. The winner is expected to be announced on 9 September 2016 (*see update below*).

So, what have they said about triggering Article 50 and the wider negotiation process?

  • Mrs May has said that there should be "no decision to invoke Article 50 before the British negotiation strategy is agreed and clear, which means Article 50 should not be invoked until the end of the year" and that "what is important is that we do this in the right timescale and we do it to get the right deal for the UK".
  • Whereas, Mrs Leadsom has stated that the UK should "get on with it" and that the negotiations should be kept "as short as possible": "Neither we nor our European friends need prolonged uncertainty and not everything needs to be negotiated before Article 50 is triggered and the exit process is concluded".

The two candidates' views also differ in relation to the status of EU nationals currently living in the UK. Mrs May has refused to guarantee that EU nationals currently living in the UK will be given unconditional rights of residence post-Brexit in advance of the withdrawal negotiations taking place.  The Foreign Secretary, Philip Hammond MP, in his evidence to the FAC on 7 July 2016, also stated that it would not make sense for the UK to offer reassurances on a unilateral basis that non-UK EU nationals could stay without receiving reciprocal statements from other Member States.  By contrast, Mrs Leadsom has committed to guaranteeing "the rights of our EU friends who have come here to live and work… we must give them certainty there is no way they will be bargaining chips in our negotiations".

On 7 July 2016, the House of Commons voted 245 to two in favour of a non-binding motion that rejected the use of non-UK EU nationals living in the UK as "bargaining chips" in the UK's negotiations to exit the EU, and which called on the UK Government urgently to commit to giving those non-UK EU nationals the right to remain in the UK. However, 325 Conservative MPs did not turn up for the debate.

***UPDATE: On 11 July 2016, Andrea Leadsom announced that she was withdrawing from the Conservative Party leadership contest, stating that Theresa May was "ideally placed to implement Brexit on the best possible terms for the British people and she has promised she will do so".  David Cameron has announced that Mrs May will take over from him as UK Prime Minister on the evening of Wednesday 13 July 2016. ***

The UK's continuing role in the EU pre-Brexit

In his evidence to the FAC, Mr Hammond stated that the UK Government intended to remain a fully participating member of the EU for the time being, and therefore expected to have a Commissioner in the European Commission able to represent UK interests. He confirmed that the UK Government was in the process of considering possible candidates to replace Baron Hill of Oareford as the UK's EU Commissioner in the European Commission, after the latter resigned in the aftermath of the referendum result.  However, that appointment would be subject to the approval of the European Parliament and Mr Hammond noted in his evidence that there is "a mood afoot" among some Members of the European Parliament that the UK should not have a Commissioner.

On 8 July 2016, it was reported that the UK's ambassador to France, Sir Julian King, has been nominated to be the UK's next Commissioner.  It is understood that Sir Julian will be interviewed by Jean-Claude Juncker to assess his suitability for the role on 11 July 2016.  The European Parliament, who will then need to approve his appointment, reconvenes in September 2016.  The next UK's Commissioner is unlikely to maintain Lord Hill's portfolio on Financial Services and Capital Markets Union. The BBC has reported that the portfolio has been given to Latvia's Valdis Dombrovskis and that the new British commissioner is likely to be given a "less sensitive" post.

The UK is due to take up the Presidency of the Council of the European Union from July to December 2017. However, in light of the result in the referendum, there have been calls for the UK to not take up the Presidency, including from the Chairman of the House of Lords EU Scrutiny Committee, Lord Boswell of Aynho, who said that "the result of the referendum also leaves huge doubts over whether the UK can possibly hold the Presidency of the EU in the second half of 2017. We urge the Government and the EU to seek alternatives as a matter of urgency".

Mr Hammond accepted in his evidence to the FAC that there were practical questions to overcome, not least given the UK's new status and whether it would be considered in the best interests of the UK or the EU for it to serve in this capacity, but did not rule out the possibility of the UK retaining the Presidency as this would be a matter for the next Prime Minister.

The work of the UK Government's EU Unit

Finally in this week's round-up, we now know a little more about the work that is being undertaken by the UK Government's new EU Unit in the Cabinet Office, which will be responsible for examining the options for the UK's future relationship outside the EU.

Oliver Robbins, previously Second Permanent Secretary in the Home Office, has been appointed as Permanent Secretary and head of the unit, which, according to Prime Minister David Cameron, will draw on the best talent from across the Civil Service.  It is reported that Mr Letwin, as the Minister with overall responsibility of the Cabinet Office, will play a "facilitative role".

Mr Letwin confirmed to the FAC that the EU Unit has three tasks: first, to build a team of civil servants and, potentially, new recruits from academia and/or the private sector; second, to undertake "fine-grained, detailed" factual work on the background situation that will need to be understood by the next Government; and third, to draw together options papers on a wide range of issues to be presented to the present Cabinet, and therefore available to, the next Government.

However, Mr Letwin stressed that the EU Unit will not take any decisions in relation to the UK's negotiating position, nor will it begin negotiations on behalf of the UK. This will be undertaken by the administration led by the next Prime Minister after 9 September 2016.  The EU Unit will also not make any recommendations, and the next Government will not be required to abide by its findings.

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