A Framework for Stability? Brexit, the UK's territorial constitution and the development of a 'common framework'.

Amidst the current, noisy, political debate about ‘bonanzas’ and ‘power grabs’ there is some measure of consensus between the UK and Scottish Governments as regards the need for (and value of) UK-wide ‘common frameworks’ post-Brexit, especially in relation to the functioning of markets within the UK.  However, as Shepherd and Wedderburn's Gordon Downie explains, what might be described as the opening negotiating positions of the UK and Scottish Governments reveal wide differences on the scope and content of these new common frameworks, and on the constitutional mechanics that should underpin them.
 
Both the UK Government and the Scottish Government have acknowledged the desirability of UK-wide ‘common frameworks’ after the UK leaves the EU, for example, to support the functioning of the UK’s internal market and avoid barriers to trade. But the scope of these frameworks, and how they are to be established and maintained, remains a matter of considerable dispute.
 

The ‘scope and content’ question

The EU (Withdrawal) Bill is designed to create a new body of domestic UK law, known as “retained EU law”. This will encompass: (a) all “EU-derived domestic legislation”, i.e., all domestic law enactments passed in order to implement EU law requirements or otherwise relating to the EU or EEA (clause 2); (b) all “direct EU legislation”, which includes EU laws which are directly applicable in the domestic legal system such as EU regulations, EU decisions and EU delegated legislation (clause 3); and (c) all other rights, powers, liabilities, obligations, restrictions, remedies and procedures recognised and available in domestic law by virtue of section 2(1) of the 1972 Act, in particular all such rights and obligations as are regarded as directly effective under EU law (clause 4).
 
As regards the final category of retained EU law, the explanatory notes to the Bill confirm that clause 4 is designed to incorporate not only rights and obligations arising under directly effective EU legislation, but also those arising under directly effective Treaty Articles. In that context, the notes suggest that such Treaty Articles would, for instance, include: Articles 30, 34 and 36 (free movement of goods); Articles 49 and 56 (freedom of establishment and to provide services); Article 106(1) and (2) (public undertakings) and Article 107 (prohibition on state aid).
 
As discussed in my earlier blog post on the UK Constitutional Law Association site, EU directives do not themselves form part of retained EU law, although (correcting my own misreading in that post) clause 4(2)(b) of the Bill appears to be designed to bring into retained EU law any directly effective rights and obligations arising under directives. Thus, many significant provisions of EU directives which lay out framework principles to guide the actions of Member States and their interaction with the EU institutions, but which are not (or have not been recognised as) directly effective, will not form part of retained EU law after exit day.
 

Effect on Devolution

Clause 11 of the Bill then applies a new, sweeping constraint on devolved legislative competence (in place of the current constraint vis à vis compatibility with EU law), depriving the devolved legislatures of the power to modify retained EU law, save in so far as permitted by Order in Council. The intention appears to be to use this order-making power to pare away elements of retained EU law leaving a residue, which will presumably form the basis for the UK’s common frameworks. Given that (as discussed above) many retained EU law instruments will need to be substantially modified or rewritten using clause 7 powers, the notion of ‘paring away’ or revealing some coherent, underlying substructure seems somewhat artificial. 
 
Meantime, pending the completion of that ‘paring away’ exercise, it seems to be accepted that legislative competence in many devolved areas may effectively (and for no legitimate reason) be suspended. That might be seen as contributing to the concerns already expressed by the House of Lords Select Committee on the Constitution that the Bill threatens, “the stability of the UK’s territorial constitution”.
 
In response, the Scottish Government’s position, in terms of the amendments to the Bill recently proposed by it and the Welsh Government, is simply that the blanket constraint on legislative competence imposed by clause 11 should be removed, leaving the UK and devolved Governments to negotiate common frameworks ‘from the ground up’.
 
It seems fairly obvious that negotiations will quickly need to get to grips with the notion of the ‘UK single market’, whatever that may be. And, as part of that debate, there presumably needs to be some assessment of the continuing role (if any) of Articles 4 and 6 of the Treaty of Union which have certainly been argued as mandating something analogous to a ‘single market’. That proposition was advanced in the recent litigation concerning the Scottish Government’s minimum unit pricing legislation, although it did not find favour with the Court of Session.
 

Constitutional mechanics

Assuming that satisfactory agreement can be reached as to the ‘scope and content’ issues, it will be equally important to address the ‘constitutional mechanics’ issues and, in particular, the following three aspects.
 
First, the Bill currently envisages that the devolved legislatures will be subject to legally binding constraints vis à vis retained EU law (or at least those parts which end up constituting the common framework), but that no similar constraints will be imposed on the UK Parliament. Thus, there is the potential for (or, at least, the perception of) an uneven playing field as regards the consistent UK-wide application of the eventual common framework.
 
It is much easier to recognise this issue than it is to come up with practical solution given the nature of the UK constitutional system. Of course, it is a problem that we already live with (to an extent), given that the current Scotland Act constraint on impinging on the ‘single market’ provisions of the Treaty of Union only applies to the Scottish Parliament and not to the UK Parliament. However, given that the UK and Scottish Parliaments are currently seen as operating on a level playing field vis à vis adherence to EU law (applying the primacy principle), then there is certainly scope for perceptions of an uneven playing field to arise in future. One approach which may be worth considering is that of entrenching the eventual framework as against future Acts of the UK Parliament in a similar way to section 2(4) of the 1972 Act. 
 
Second, whereas the current EU constraint on legislative competence in the Scotland Act prevents the Scottish Parliament from passing laws which would be ‘incompatible with’ EU law, the new constraint (vis à vis retained EU law) will strike at laws which would ‘modify’ retained EU law. This change does not seem particularly well suited to the task of policing compliance with an overarching common framework.  
 
Finally, the Bill offers no guidance as to the means by which compliance with the eventual common framework is to be policed. On the face of it, the task would appear to fall to the courts, absent the introduction of some new institution (or conferral of new powers on an existing institution) to undertake the role. Clearly, there are limits on the ability of the courts (e.g., in terms of resources or expertise) to perform such a role and other institutions may offer a better solution. However, there will be challenges in demonstrating (in particular to the devolved administrations) that another institution would offer the same guarantees of independence and neutrality as the courts.
 
Gordon Downie is a partner at Shepherd and Wedderburn LLP. 

 

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