Council on the Common Fisheries PolicyA key public law discussion in recent months concerns the vast number of statutory instruments (SIs) government is using to implement Brexit. Initially, it was said by government that c.800-1,000 SIs were required. That estimate has now been revised down to c.600 (while the estimated number of SIs has decreased the size of individual SIs has also increased). This aspect of the Brexit process is worthy of study for multiple reasons, perhaps most notably because of the level of democratic scrutiny that will be (realistically) provided. In this post, we introduce one aspect of Brexit SIs that, we argue, is worthy of close attention by public lawyers: the deletion of administrative functions.

Assume, delete, or coordinate?

In the UK, we are governed by a complex set of structures which exist across a range of layers. Government exists on the local, devolved, national, supranational level etc. Administrative functions—in the forms of powers and duties—exist throughout these levels. In respect of these functions, Brexit represents a process of redistributing powers and duties from the EU to domestic administrative bodies (or that is at least what is expected).

The key choice for government vis-à-vis any administrative function presently held by the EU is effectively three-fold: delete the function; assume the function on the national level (either on behalf of the UK or through the devolved nations); or continue to co-ordinate with the EU in the administration of the function. While each of these three options raise important questions of law and administration, we are concerned here with the range of administrative powers and duties government is choosing to simply ‘delete’ via SI in the course of the Brexit process.

What is being deleted?

We are already seeing some administrative functions effectively deleted. They range in their apparent significance from minor to potentially very serious. There are also partial deletions, e.g. where a power is to be assumed on the national level but requirements about how a power should be exercised are removed.

Finding examples is not an easy task: the explanatory notes attached to SIs do not necessarily explain this type of change and the content of the SIs typically makes little sense unless it is placed within the wider legislative jigsaw of which it is a piece. The following examples serve as illustrations of a wider pattern.

  • In the Consumer Protection (Amendment etc.) (EU Exit) Regulations 2018, BEIS removed access to online dispute resolution for UK consumers by revoking Regulation (EU) No 524/2013 of the European Parliament and of the Council of 21 May 2013 on online dispute resolution for consumer disputes.
  • The Explanatory Note to the Social Security Coordination Regulations, relaid in January 2019, states they have removed the requirement on the UK to make provisional payments to a claimant in the UK while a dispute is being resolved between the UK and EU member states relating to which state has the social security obligations to make payments.
  • The Equality (Amendment and Revocation) (EU Exit) Regulations 2018 retain Regulation 4(1) of the Equality Act 2010 (Amendment) Regulations 2012 which provides for the Treasury to publish a report from time to time reviewing whether women and men are receiving equal treatment in access to insurance services in the UK. However, the amending regulations removed regulation 4(3), which stated that the insurance services report must set out the objectives to be achieved by the Equality Act’s regulatory system as regards insurance services, and whether those objectives were being achieved.

There are also some trends in deletion we are observing that cut across multiple SIs and different policy areas. For instance, we are observing the deletion of articles in EU Regulations that require effective, dissuasive, and proportionate penalties. For instance, Article 5(8) of Council Regulation (EC) No. 2173/2005 provides for member states to impose effective, proportionate, and dissuasive penalties for breaches of the EU timber importation licensing scheme. This article has been deleted by the Timber and Timber Products and FLEGT (EU Exit) Regulations 2018 with no alternative penalties regime or in fact any reference to penalties inserted into Council Regulation (EC) No. 2173/2005. The justification for the removal is unknown because its removal is not recorded in the accompanying explanatory note. Similarly, Article 36(3) of Regulation (EU) No 1380/2013 of the European Parliament and of the Council on the Common Fisheries Policy is removed by the Common Fisheries Policy (Amendment etc.) (EU Exit) Regulations 2018. Article 36(3) states ‘Member States shall adopt appropriate measures for ensuring control, inspection and enforcement of activities carried out within the scope of the CFP, including the establishment of effective, proportionate and dissuasive penalties.’ Again, this omission was not noted in the explanatory note to the regulations. In an entirely different sector, the Law Enforcement and Security (Amendment) (EU Exit) Regulations 2019 omits an EU law requirement for the imposition of effective, proportionate, and dissuasive penalties for the illicit manufacture of drug precursors. The explanatory note makes no reference to the removal of this Article, despite references to penalty provisions elsewhere in the explanatory note.

Why is deletion worthy of analysis?

SIs which, as part of the Brexit process, delete administrative functions presently held by the European Union constitute a subject worthy of analysis for multiple reasons. By the end of the process, the State may well have been redefined, with aspects of its responsibilities carved out as functions transferred from the EU to the UK are deleted. There are various—potentially very significant—practical implications of this, as demonstrated by the examples we have offered above. From a wider perspective, however, this category may also reveal something important about the difference between the governing styles and priorities of the European Union and the UK. Alternatively, it could be said that the deletion of functions may just be a government under pressure taking an easier route. If that is true, it will tell us something about the Brexit reform process and the quality of the SI legislative process in scrutinising such choices. Finally, if the category of deleted functions is large, we may find reasons to be sceptical of any suggestion—which Richard Rawlings raised the prospect of in an important recent report—that the Brexit process may lead to the ‘filling back in’ of the UK state that was, in part, ‘hollowed out’ by the transfer of power to the European Union in recent decades.

Alexandra Sinclair is a Research Fellow at the Public Law Project. She is leading on the SIFT Project, which, in partnership with the Hansard Society, is tracking qualitative trends in Brexit SIs.

Dr Joe Tomlinson is Lecturer in Public Law at King’s College London and Research Director at the Public Law Project.

(Suggested citation: A. Sinclair and J. Tomlinson, ‘Deleting the Administrative State?’, U.K. Const. L. Blog (7th Feb. 2019) (available at https://ukconstitutionallaw.org/))

On the 10 December 2018 we launched the findings of our research project funded by Joseph Rowntree Charitable Trust (JRCT) about the next steps for a Northern Ireland Bill of Rights. The 10 December 2018 was symbolic as it marked both the 10th anniversary of the Northern Ireland Human Rights Commission’s (NIHRC) advice to the British Government (as mandated under the Belfast Agreement/Good Friday Agreement-the B/GFA) and the 70th anniversary of the Universal Declaration of Human Rights.

To help promote debate and progress the Bill of Rights, this project produced a draft model Bill of Rights based on the NIHRC’s 2008 advice. The idea was to turn the NIHRC’s recommendations into something that looked like draft model legislation. The report notes five key findings and makes 10 recommendations. It should be read in the context of the current human rights and equality crisis in Northern Ireland.

The publication of a draft legislative model Bill produced several responses. First, the draft model Bill was welcomed by participants as a meaningful contribution. Second, most participants felt that the draft model Bill did not go far enough regarding certain rights/areas and noted that the NIHRC’s advice was submitted 10 years ago. As such, while much of the advice remains persuasive and holds, and the extent to which the NIHRC included a full range of rights is impressive, the advice was also the subject of disagreement. It was, however, a compromise document then and there are areas where further thought is needed, including for example, women’s rights, including reproductive rights; stronger provisions on children’s rights; a stronger equality provision, with particular emphasis on disability and the need to protect younger people; refugee rights; and marriage equality. Although the report notes that there has been public comment about the extent of the advice, we believe this has clouded and obscured the voices of those who still believe the advice never went far enough. The advice was and remains a compromise.

A third finding is that Brexit has created a receptive environment for putting the Bill of Rights centre stage, to help ensure there is a legal framework in Northern Ireland that will assist in clarifying and underpinning social, economic and citizenship rights, among other things. In light of Brexit, the draft model Bill therefore needs to be updated and augmented to reflect the changing particular circumstances in Northern Ireland. The following rights/issues were highlighted during our discussions (some of which are impacted by Brexit): citizenship equality; freedom of movement; equivalence of rights on the island of Ireland; EU citizenship rights; and voting rights. The report also highlighted that close attention should be paid to all aspects of the B/GFA mandate when taking this work forward. The focus on the term ‘particular circumstances’ of Northern Ireland should not distract from the other aspects of the remit, for example, the need to consider ‘international instruments and experience’.

Several participants also referred to another significant source of rights protection under threat, namely the European Convention on Human Rights (ECHR) and the Human Rights Act 1998 (HRA). The British Government has committed to repeal the HRA and replace it with a British Bill of Rights; it has even referred to possible withdrawal from the ECHR. While such a threat has been delayed due to Brexit, it appears to be only temporary, and this raises the spectre of a further lowering of the threshold of rights protection and further undermining the B/GFA. The final key finding is that Brexit, combined with the repeal of the HRA and possible withdrawal from the ECHR, simply increases the need for an inclusive and comprehensive Bill of Rights.

The report then shows how a Bill of Rights could be one ‘solution’ to the plethora of current rights and equality challenges, and makes a number of recommendations including, the need for the Bill of Rights process to be acknowledged and celebrated as a significant contribution towards fostering a robust human rights culture in Northern Ireland.  As envisaged in the B/GFA the advice submitted by the NIHRC, and all associated contributions towards the creation of a Bill of Rights should inform the next steps. There is no need or desire to start from a blank page.

The report also notes that the failure to give effective domestic legal force to the concept of equal citizenship and the rights/equality components of the peace process has disturbing, ongoing and underreported consequences. It has contributed more than is often acknowledged to the societal and other pressures on the power-sharing institutions. This is what we term a ‘formalisation failure’ with respect to core concepts; the pursuant unwillingness of statutory and other institutions to intervene has left major principles of the peace process to be fought out in the political arena, with familiar and predictable outcomes. The attempt by the NIHRC to confront this trend, in its advice, has never been adequately recognised.

The Bill of Rights should be taken forward as Westminster legislation in the way provided for in the NIHRC’s advice (HRA plus). This should not prevent preparatory initiatives that seek to build momentum or provide clarification. Any such work must commence from completed documentation and not be a further exercise in prevarication, obstruction and delay. This fact is also no impediment to the Assembly and Executive advancing specific human rights and equality goals within the context of this overriding constitutional framework. In particular, the Northern Ireland Assembly and Executive should be proactive and imaginative in their work of ‘observing and implementing’ existing international human rights obligations.

The British and Irish Governments have a responsibility as co-guarantors of the B/GFA, to address this outstanding element of the B/GFA. The British Irish Intergovernmental Conference (due to meet again in Spring 2019) provides a formal setting for such work. We accept that there are competing views about the status of the process, and how it might be taken forward. However, our view is that it is a reasonable expectation, flowing from a generous and purposive reading of the B/GFA (and subsequent developments), that a Bill of Rights enacted at Westminster would be the final outcome. In other words, we agree with those who believe this is an outstanding legacy issue that requires urgent attention.

Finally, the report acknowledges that the process, since inception (officially launched on 1 March 2000) has been marked by a lack of cross-community party political consensus. That remains a major obstacle to progress, and will present a formidable challenge to, for example, any new ad hoc Assembly Committee (referred to in the leaked draft ‘agreement’ document) that is established. It was apparent throughout, however, that unionist/nationalist divisions did not always neatly map on to the views of individuals and communities. If a new political process can unlock progress and break the current stand-off then it can be tentatively welcomed, but questions will remain about how it will be structured, how participation will be ensured and, perhaps of most significance, how an acceptable outcome will be delivered.

We share the view, heard often in our discussions, that we should be ambitious for human rights and equality in Northern Ireland and that the time is right to re-open this conversation. For this to happen both the British and Irish Governments, as co-guarantors of the B/GFA, must adhere to and fulfil their international obligations to ensure the progression and the eventual implementation of a Northern Ireland Bill of Rights.

Dr Anne Smith, Transitional Justice Institute/School of Law, Ulster University

Professor Colin Harvey, Queen’s University Belfast

(Suggested citation: A. Smith and C. Harvey, ‘Where Next for a Bill of Rights for Northern Ireland?’, U.K. Const. L. Blog (6th Feb. 2019) (available at https://ukconstitutionallaw.org/))

Brexit ArrowWith continuing uncertainty, there is still a lack of clarity on what the final Brexit arrangements will look like. Many companies have been planning for the implications of Brexit for some time, whereas some still need to consider how Brexit may affect their operations. Both the UK government and the EU are encouraging businesses to prepare for the possibility of a no-deal Brexit. Regardless of size, plans need to be put in place so that businesses can quickly react to whatever the final Brexit deal looks like.

As a result, we have put together a Brexit Readiness Guide which is intended to help businesses navigate the continuing uncertainty and possibility of “no deal”, along with a summary of the core services we provide to help you and your business prepare for the ultimate outcome.

Brexit – Where are we now?

Brexit Countdown

Over the period since the rejection of the Withdrawal Agreement, the Prime Minister’s tactic has been to try to bring the pro-Brexit wing of the Conservative Party, and the Northern Ireland Democratic Unionists, back on side.  No.10 appear to have been successful in whittling the pro-Brexit wing’s nominal resistance to the Withdrawal Agreement (which was very wide ranging at the time of the vote on 15th Jan) down to just the Northern Ireland backstop – the failsafe mechanism in the Withdrawal Agreement to ensure that there will be no hard border on the island of Ireland, but which the Pro-Brexit wing fear is a trap to keep the UK permanently in customs and regulatory alignment with the EU.  Until yesterday morning, No.10 hoped to achieve this without attempting to renegotiate the Withdrawal Agreement, something the EU has been adamant is not on the cards.  But No.10’s aim for a legally binding side agreement looked unlikely to bring the Brexiteers on side.  So on Tuesday the PM announced that she was willing to go back to the EU and to seek changes to the Withdrawal Agreement.  This – some would say desperate – volte face by the Prime Minister is very significant background to yesterday’s votes in Parliament.

The House of Commons voted on 7 amendments to the (neutrally worded) Government motion:

  1. Labour Party amendment to rule out “no deal” and require a permanent customs union, defeated by 327 votes to 296
  2. Scottish and Welsh National Parties amendment which notes Scotland and Wales voted to remain in the EU, calls for extension and Article 50 timetable and to rule out “no deal”, defeated by 327 votes to 39
  3. Former Attorney-General Dominic Grieve amendment to give Parliament six days to debate Brexit and put forward alternative plans, defeated by 321 votes to 301
  4. Labour front-bench Yvette Cooper amendment to create legal obligation on Government to extend Article 50 timetable unless a deal is approved by Parliament by 26 February, defeated by 321 votes to 298
  5. Labour Rachel Reeves amendment similar to Yvette Cooper but not legally binding, defeated by 322 votes to 290
  6. Conservative Caroline Spelman amendment to reject “no deal” Brexit (not legally binding), passed by 318 votes to 310
  7. Conservative Graham Brady amendment (with tacit Government backing) calling on Government to replace Northern Ireland backstop with “alternative arrangements”, and stating that with this change the Withdrawal Agreement would be accepted, passed by 317 votes to 301

The most significant of these amendments were 3, 4, 6 and 7.  3 and 4 were the mechanisms by which Parliament could take control of the Brexit process.  The Prime Minister’s undertaking to seek to renegotiate the Withdrawal Agreement, by bringing the Brexiteers on side, combined with an undertaking to hold a new “meaningful vote” in about two weeks’ time, which kept a number of Ministers who would have resigned in order to support the Cooper amendment from doing so, saw these two amendments off.  6 is non-binding, but is an important reminder of where Parliamentary opinion sits if the Prime Minister fails to secure changes to the Withdrawal Agreement.  7 is being portrayed, perhaps with rather exuberant optimism, within the Conservative Party and pro-Brexit press as the Prime Minister’s mandate to secure changes to the Withdrawal Agreement.  The wording of the amendment – “alternative arrangements” – deliberately picks up on the EU’s own language.

The Government’s narrow majority held up pretty well through the evening, a small number of Conservative rebels being compensated for by a dozen or so Labour MPs from strongly pro-Brexit constituencies voting with the Government in order not to be accused of voting against Brexit.  Support for the Brady amendment (the only “positive” amendment to pass) was however a handful of votes lower than the Government majority against the other amendments (fewer Labour MPs supported it).  And enough Conservatives supported the Spelman amendment to send the Government a clear message for the future.

So the action now passes to Brussels.  EU Council President Donald Tusk has already responded to the Brady amendment by saying that the Withdrawal Agreement cannot be re-opened.  Even if there were a willingness on the EU’s part to try to help secure a deal that will pass, it remains very unclear what is meant by “alternative arrangements”.  So the Prime Minister’s task looks like a pretty tall order.  But given the damage “no deal” is likely to do to both the UK and EU economies, and to some EU member states in particular, the EU will want to ensure that, however it couches its rejection of the UK’s attempt to re-open the Withdrawal Agreement, it also avoids any blame for “no deal” if that is where the process ends:  scope perhaps for some creative “writing around” the Withdrawal Agreement?  But would that be enough to keep the Brexiteers on side?  The Government is set to return to the Commons probably around 14 February for a further “meaningful vote”, either on an amended version of the Withdrawal Agreement if they can secure that, or – unusually: Parliament generally does not vote twice on the same thing – on the existing Withdrawal Agreement if no amendments have been secured.  If the latter, the truce in the Conservative Party is likely to end again.

On the plus side, the Prime Minister has re-established her majority and secured Parliamentary approval for an – albeit vague – proposal for approving the Withdrawal Agreement.  But the price of doing so is an undertaking to achieve something which looks at best at the outer limit of achievable.  It is hard to see what incentive the EU has to give the Prime Minister what she now needs:  substantive changes to the text of the Withdrawal Agreement.  First, many in the EU think the Withdrawal Agreement goes too far already.  Second, they know that the full force of the anti-“no deal” majority has not yet materialized in Westminster.  And third, it is hard to see how any alternative approach works for the Irish border unless the UK is willing to relax at least some “red lines”.  At the moment, within the legally determined timetable, there remain only two options:  the Withdrawal Agreement, or “no deal” Brexit.  Commission President Juncker has hinted at a third, but it would involve UK membership of a permanent customs union, to be negotiated through the implementation period, and could only happen through the Withdrawal Agreement, but could create a guarantee that the backstop would never enter into force.

The Prime Minister has successfully managed to avoid the choice between a position the pro-Brexit wing of the Conservative Party could not accept, and a position which the pro-European wing of the Party could not accept.  But that moment of choice is coming closer – in effect a choice between re-defining the UK’s red lines to secure a deal which could command substantial cross-party support but would be implacably opposed by the pro-Brexit wing of the Conservative Party, or continuing to try to produce a solution which the Brexiteers would support, but with the increased risk of a “no deal” Brexit.  Opting for either path would greatly increase the chances of a general election, which could throw the deck of cards up in the air.

Consolidated FundIn a post on this blog yesterday, Andrew Denny argued that I was wrong to suggest that a money resolution, with Crown recommendation, would be needed under the Standing Orders of the House of Commons for a  provision of a Bill for the purpose of securing the postponement of the expiry of the UK’s Article 50 notification or the revocation of that notification (“a postponing or revoking provision”).

He accurately sets out the standing orders and my argument from the paper, written for Policy Exchange, in which I made the suggestion. That argument is that any postponing or cancelling provision would involve (as the published Bills for securing a postponement do) a provision for the postponement or cancellation of “exit day” (within the meaning of the European Union (Withdrawal) Act 2018). That, in turn, would mean the postponement or cancellation of the repeal of section 2(3) of the European Communities Act 1972, which is set by section 1 of the 2018 Act for exit day, that is, currently, for 29th March 2019.

Section 2(3) of the 1972 Act is the provision under which the payment of financial obligations to the EU and other related EU payments are charged directly on the Consolidated Fund. Postponing or cancelling its repeal would mean that the payments would fall to be charged directly on that Fund for longer than the existing law passed by Parliament would authorise. The inevitable prolongation of the financial burden on the public revenues would need money resolution cover.

His contrary argument rests on the proposition that section 2(3) is currently in force and that expenditure resulting from any Bill that delayed or removed the possibility of its repeal would already be authorised by section 2(3) of the 1972 Act, and so by whatever money resolution supported the Bill for that Act. He also points out that no order has yet been made to bring section 1 of the 2018 Act into force.

This contrary argument is clearly misconceived for the following reasons.

First, the fact that no order has been made to bring section 1 of the 2018 Act into force is irrelevant in determining its legal effect for financial resolution purposes. Any provision removing the potential to let the repeal take effect on 29th March 2019, or making new provision requiring or allowing it to take effect on a later date, itself creates a greater potential for expenditure and, under the way the rules have always been applied, would be sufficient to create the need for a money resolution.

The legal status quo against which the test of whether a provision of a Bill has a potential for giving rise to a new charge on the public revenues is not confined to the statute law that is already in force. It includes everything that has been enacted and could be brought into force in future.

There is, however, an even more convincing reason why that fact is irrelevant in this case. Section 1 is not just a provision that may be brought into force. It is a provision that must be brought into force by a defined time. There is a clear legal duty for the Government to bring section 1 of the 2018 Act into force before “exit day”, which (unless delayed under the power in section 20(4) of that Act) means 29th March 2019. The duty is unequivocal and derives from the House of Lords decision in the “FBU case” [1995] 2 AC 513. In that case it was held that the Government is not entitled to exercise a commencement power in a way that would frustrate the statutory intention of Parliament. In this case, the wording of section 1 of the 2018 Act makes it absolutely clear that the intention is that (subject only to section 20(4)) the repeal must come into force on 29th March 2019.

It follows that existing law provides “a speeding bullet” that removes section 2(3) of the 1972 Act from the statute book on 29th March 2019, subject only to the power for which the 2018 Act already provides in section 20(4). Andrew Denny concedes that a money resolution would be required if the authorisation given by section 2(3) and the money resolution used for that were “time-limited”. Time limiting that authorisation is exactly what section 1 of the 2018 Act does; and section 1 is the law enacted by Parliament. A postponing or revoking provision would extend the time-limit either for a fixed period or indefinitely.

Replacing a power for the Government to postpone the repeal with a duty to secure its postponement or cancellation, or giving effect to a postponement directly in a new statutory provision for which a Bill is required, would require new money resolution cover. It has always been the case that the creation of a duty to pay money out of public revenue requires a money resolution irrespective of whether it can be shown that there is already a power to make the payment.

It may be, though, that Andrew Denny has a different argument in mind. While section 2(3) has been in force, it has usually been construed for the purposes of financial procedure as “dynamic”, in the sense of being intended to apply to all payments to which it applies – even those arising by virtue of future UK legislation about the EU, such as that passed in connection with the accession of new members. The argument has been that it is the change at the EU level that has increased the expenditure, not the legislation to implement it. The inference that has been drawn is that section 2(3) originally contemplated the possibility of future EU level changes with an impact on the payments to which it related. For that reason, money resolution cover has not always been required for legislation with the theoretical effect of increasing expenditure under section 2(3) as a result of incorporating EU obligations into law. Section 2(3) expressly covers treaty obligations to make payments irrespective of whether they have been incorporated into UK law. So, the incorporation, it was said, did not trigger the charge on the public revenues.

The question could arise that the argument also applies in the case of a postponing or revoking provision because the new obligations could be said to arise from the continuation of membership, not any change to UK law.

This suggestion, though, is quite clearly wrong, because it disregards the fact that Parliament has already enacted the repeal of section 2(3) of the 1972 Act. Section 2(3), and its original money resolution cover, cannot possibly be construed as having contemplated its continuation in force after the date for its own repeal had been set, so as to cover expenditure arising from a future Bill postponing or cancelling that repeal. That is an argument that would have to “pull itself up by its own bootstraps”.

Nor can the charge on the public revenues resulting from postponing or cancelling the repeal of section 2(3) of the 1972 Act possibly be said to be attributable to the EU level change (continued membership), rather than to the proposed change in domestic law to the meaning of “exit day”.

The fallacy in the argument is easily demonstrated by asking what would happen if the 1972 Act were repealed from 29th March 2019 but the UK’s membership of the EU extended to e.g. 31st December 2019. There might be treaty obligations to make EU payments during the extension, although there would be no recognition for them as EU obligations in UK law. Nevertheless, the repeal of section 2(3) of the 1972 Act would still stop any payment obligations there were from being a charge on the Consolidated Fund. Any obligation to make payments that survived at the EU level could only be paid out of annually voted sums. They would not, and could not, be treated as charged on the Consolidated Fund. The continuation of membership would not revive a charge on the Fund, because the 1972 Act (including s.2(3)) would not be in force. Only postponing the repeal of the 1972 Act can cause the payments to be charged on the Fund; and it has always been the case that money resolution cover is essential for any provision that sums that would otherwise fall to be met out of annually voted moneys should be charged directly on the Consolidated Fund.

This article is not about whether it would or would not be a good idea to try to postpone or cancel the expiry of the UK’s Article 50 notification. It is about whether, if you have rules that support a fundamental constitutional principle, you should construe them consistently with the way they have always previously been understood, or whether you should construe them “creatively” to produce a more congenial result. My own belief is that the latter course is a route to chaos.

Sir Stephen Laws KCB, QC (Hon) was First Parliamentary Counsel 2006-2012 and is a Senior Research Fellow at Policy Exchange.

(Suggested citation: S. Laws, ‘Why a Money Resolution with Queen’s Recommendation Is Required for a Bill for the Postponing or Cancelling of “Exit Day”’, U.K. Const. L. Blog (29th Jan. 2019) (available at https;//ukconstitutionallaw.org/))

authorIntroduction

The on-going constitutional laboratory experiment that is Brexit has now turned to the question of whether a bill proposed by a backbench MP can be passed into law against the express opposition of the Government.  This scenario gives rise to a number of issues, including whether Parliamentary rules in the form of its standing orders, will need to be amended to enable this.  A number of commentators, including on this blog, have even considered the question of whether in those circumstances, ministers could advise the Queen to refuse Royal Assent to such a bill.  One of the most eminent of these, Sir Stephen Laws, has argued here such a situation might arise if the Speaker endorsed “… an attempt to bypass the financial Standing Orders and allowed a Bill to pass that contravened them”, a situation he describes as “potentially horrific”.

In particular he considers that legislation to produce a postponement or cancelation of the repeal of section 2(3) the European Communities Act 1972 – which makes provision for the UK’s financial obligations to the EU – would result in significant financial impact on the public purse.  Under existing standing orders, such a change in law, he argues, would require a resolution of the House recommended by the Crown.  A similar argument has been made by Joe Armitage and most recently by Vernon Bogdanor.

This post does not attempt to grapple with the wider issues around Royal Assent or whether it is in fact constitutionally proper for Parliament to seek to overrule the Executive in this manner.  Instead it focuses on the narrow (but nonetheless important) issue of whether a bill which has as its objective an extension or cancellation of the Article 50 Notice would in fact require a money resolution sponsored by the Government under existing standing orders.  The conclusion set out below is that no such resolution would be required.

Section 2(3) of the 1972 Act

The relevant wording of section 2(3) of the 1972 Act is as follows:

(3) There shall be charged on and issued out of the Consolidated Fund or, if so determined by the Treasury, the National Loans Fund the amounts required to meet any EU obligation to make payments to the EU or a member State … .

The payments made pursuant to this provision are categorised as Standing Services, as they are exempt from the usual requirement for expenditure to be voted on annually, as Parliament has, by this provision, permanently authorised such payments.  Under section 1 of the European Union (Withdrawal) Act 2018, section 2(3), and the rest of the 1972 Act, is repealed on exit day, currently 29 March 2019.  It is worth noting that section 1 is not yet in force, and will only come into force on such date as a Minister of the Crown specifies by regulations.

The Financial Standing Orders

The Standing Orders in question are SO 48 and 49:

Recommendation from Crown required on application relating to public money.

 

48. This House will receive no petition for any sum relating to public service or proceed upon any motion for a grant or charge upon the public revenue, whether payable out of the Consolidated Fund or the National Loans Fund or out of money to be provided by Parliament, or for releasing or compounding any sum of money owing to the Crown, unless recommended from the Crown.
Certain proceedings relating to public money. 49. Any charge upon the public revenue whether payable out of the Consolidated Fund or the National Loans Fund or out of money to be provided by Parliament including any provision for releasing or compounding any sum of money owing to the Crown shall be authorised by resolution of the House.

These provisions are somewhat dense, but in brief SO 49 requires for these purposes that an enactment creating new and continuing expenditure must be authorised by a resolution of the House (a so-called “money resolution”), and SO 48 stipulates that any such resolution must first be recommended by the Crown.

Erskine May describes the requirement set out in SO 48 as a “…long-established and strictly observed rule of procedure, which expresses a principle of the highest constitutional importance, that no charge on public funds or on the people can be incurred except on then initiative of the Crown” (Page 716).  Sir Stephen Laws in the above-mentioned paper justifies this principle as follows (page 7):

The electoral system itself, so far as it is a means of holding the Government accountable to the public, depends crucially on the ability of the public to hold the Government responsible for how it has used the principal lever of government – the use of public money. Removing that responsibility would undermine the whole UK constitutional system.

Is there a need for a money resolution for a bill seeking to extend or cancel the Article 50 Notice?

Sir Stephen Laws’ argument is as follows:

It follows that any legislation to produce a postponement of the repeal [of section 2(3)], or its cancellation, will revive that provision (if only temporarily) and so be changing the law in a way that potentially carries a very substantial financial burden on the exchequer. It may be that the expenditure would continue under the proposals for a transition period, but there is no legislation for that yet in place and it cannot be taken into account.

The problem with this argument is that it overlooks the actual words of SOs 48 and 49.  They refer to the authorisation of, or a motion for, “a charge on the public revenue”.  Here, the charge on the revenue permanently authorising the payments to the EU was created by section 2(3) of the 1972 Act, which would have been authorised at the time by the appropriate monetary resolution put forward by the Crown.  Until such time as the repeal of section 2(3) (and the rest of the 1972 Act) comes into effect, that charge remains in place.  That charge does not need to be “revived” as it has not yet been removed.  So a bill seeking the extension or cancellation of the Article 50 Notice would not need to create a “charge upon the public revenue” under SO 48 or 49 as the repeal of section 2(3) has not yet come into effect and so payments to the EU can continue pursuant to the pre-existing charge.  Similarly, the authorisation for such charge given by the money resolution proposed by the Crown at the time also remains in place and so no further authorisation is required.

This interpretation is supported by Erskine May’s view of the requirements of SOs 48 and 49 (page 746):

Standing Orders Nos 48 and 49 apply in cases where a proposal involves a ‘charge upon the public revenue’ (see p 712). In practice, this is interpreted to mean a proposal for new or increased expenditure, which is not already covered by legislative authorisation.

In this case, the expenditure is not new – it is on-going currently – and it is already covered by legislative authorisation in the form of section 2(3) and its accompanying money resolution.  The fact that that section is currently scheduled for repeal does not alter the fact that it remains in force at this point in time.  Any payments to the EU would still cease (subject to any separate transitional provisions) if and when section 2(3) was repealed on a delayed exit day, as the authorisation for such payments flows from section 2(3), not from any legislation extending that deadline.

The position would have been different had the original charge and its accompanying authorisation been time limited: Erskine May is clear that any extension to such a time period would require authorisation by a money resolution (page 750).  But that is not the case here, as the original charge and its authorisation were indefinite.  If and when the repeal of that charge and authorisation pursuant to section 1 of EUWA comes into effect, any further payments (including pursuant to any transitional arrangements) would of course require a fresh money resolution as this would be “new expenditure”.  But for the moment, it should be possible to rely on the existing indefinite authorisation to continue the status quo.

Conclusion

In the current febrile environment, any route which could avoid an issue blowing up into yet another constitutional crisis should be welcome.  In this situation, the way through should be to regard a bill seeking to delay or extend the Article 50 deadline not as an usurpation of the Government’s control over legislation having a financial impact, but instead as simply operating under an existing authorisation pursuant to the 1972 Act.

The author would like to thank Jack Simson Caird for his comments on the original idea for this article.

Andrew Denny is a partner in Allen & Overy LLP’s London office and head of the firm’s UK Public Law Group. All opinions are his own.

(Suggested citation: A. Denny, ‘Would a Bill Seeking an Article 50 Extension Require a Money Resolution Proposed by the Government?’, U.K. Const. L. Blog (28th Jan. 2019) (available at https://ukconstitutionallaw.org/))

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