BREXIT: Early indications show UK favouring 'hard Brexit', says expert

Out-Law News | 04 Oct 2016 | 2:17 pm | 2 min. read

The UK will trigger Article 50 of the Treaty on European Union, triggering the formal two-year Brexit negotiation process, by the end of March 2017, the prime minister has announced.

This is part of Out-Law's series of news and insights from Pinsent Masons experts on the impact of the UK's EU referendum. Watch our video on the issues facing businesses and sign up to receive our 'What next?' checklist.

The government also intends to publish a 'Great Repeal Bill' which, once given effect, will remove the 1972 European Communities Act from the UK statute book and enshrine any EU laws in effect on the date of the UK's exit from the EU into UK law, Theresa May told the Conservative Party annual conference.

May said that the process would give UK businesses and workers "maximum certainty as we leave" the EU, while retaining the government's right to "amend, repeal and improve any law it chooses" at a later date.

EU law expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com, said that the comments provided "a helpful indication of the government's intentions and priorities".

"Although the prime minister has indicated her opposition to the shorthand labels of 'soft Brexit' and 'hard Brexit', it appears that the government's negotiation intentions and the likely outcome are closer to the latter than the former," he said.

"It now appears likely that, following the end of the two-year negotiation period prescribed by Article 50, the UK will be trading with the EU on the basis of WTO terms, potentially with certain areas of trade in goods or services covered by a bespoke trade deal between the EU and the UK. This is in contrast to the alternative, closer to a 'soft Brexit', of there being an all-encompassing and deep trade agreement allowing UK goods and services to continue enjoying unrestricted and tariff-free access to EU markets," he said.

It would be "some time" before it became clear which UK goods and services, if any, would benefit from any such trade deal, and the terms on which they would do so, Lougher said.

In her speech, May set out her vision for a "fully-independent, sovereign" UK that was "no longer part of a political union with supranational institutions that can override national parliaments and courts".

"That means we are going, once more, to have the freedom to make our own decisions on a whole host of different matters, from how we label our food to the way in which we choose to control immigration," she said.

She also emphasised that the UK would not cede control over immigration rules to the EU as part of any trade negotiations.

The European Communities Act incorporates EU regulations into the domestic law of the UK, while at the same time giving UK ministers the power to transpose EU directives and rulings of the Court of Justice of the EU (CJEU) into UK law. It also provides that all UK legislation, including acts of parliament, have effect "subject to" directly applicable EU law.

Full details of the Great Repeal Bill will be included in the Queen's Speech setting out the legislative programme for the next parliamentary session. However, May said that it would end direct effect of EU law in the UK "from the date upon which we formally leave the European Union". The legislation will also convert the body of existing EU law, known as the 'acquis', into UK law from that date.

Although the UK will then be free to amend or repeal any EU laws, these changes "will have to be subject to full scrutiny and proper parliamentary debate" in the same way as any other changes to the law, May said.

May also used her speech to confirm that it was "up to the government … and the government alone" to invoke Article 50 and begin the Brexit process, ruling out the need for the agreement of the House of Commons and the House of Lords. She added that the devolved administrations of Scotland, Wales and Northern Ireland would not have any kind of 'veto' over the process.