News & Insights

Brexit - Henry VIII and statutory instruments

24 Oct 2018

For some time now, Brexit Partners have been tracking and reporting on the myriad changes that need to be planned, orchestrated and implemented seamlessly by government, business and commerce to transition smoothly to a post-Brexit world.

The civil service has been working through these impacts each from their Departmental view and spelling them out in a series of published guidelines, known as no-deal ‘Technical Notices’.

More than 100 Technical Notices have been published to date. They cover every aspect of individual, commercial and business life – from the future of pet passports, to type-approval of aircraft spare-parts, to data-roaming, to delivering humanitarian aid. There’s a list at the end of this article.

These notices can be added to a raft of specialist advice on the impacts of Brexit issued by Government Regulators and Authorities such as the Bank of England, Financial Conduct Authority and HMRC.

If “nothing is agreed until everything is agreed” – and the UK crashes out of the European Union at 11:00 pm (GMT) on 29 March 2019 – because time ran out on the political negotiations - each of the impacts identified in the Technical Notices, will need to be addressed and UK Law amended where necessary.

For the European Union, the corresponding regulatory changes are “relatively” straight forward – the UK is simply stuck off the list of 28 EU States – and added to the ‘third country’ list. Third Country status applies to the ‘Rest of the World’ outside the EU and some close partners - such as Norway - who together form the European Economic Area. The rules for dealing with third countries are long established and clear. The European Commission has already been empowered to make these changes whenever the “point of exit” occurs.

For a deal to be concluded, the negotiations must end up being captured as a ‘draft Agreement’ that be passed into UK Law by Parliament - and passed by each of the 27 remaining EU States in parallel –whilst allowing time for regulators and civil servants, business and citizens to prepare for the changes.

The issue is that even if there is a deal – and even it includes a ‘transition’ period - there is a risk that the necessary regulatory changes will not be in place by the ‘point of exit’ – or ‘Brexit’.

In the UK, most of the general public law is made through delegated legislation in the form of statutory instruments (SIs). For the last 40 years, SIs are how most European Union legislation has been transposed into UK law.

SIs, for example, define rules for pensions, welfare benefits and national minimum wage levels – and immigration, rubbish collections, food labelling and rail passenger regulations. SIs are the legislation of everyday life and cover thousands of aspects of our private and business life.

Statutory Instruments are, therefore, the key to delivering Brexit for UK citizens and businesses – and every one of the hundreds of SI’s need to be examined and amended, where necessary, to prepare the statute book “exit day” – whether that is 29 March 2019, 31 December 2020 (as presently proposed by EU as a deal-based Brexit day) – or a ‘temporary’ but yet undefined date some time later (as introduced by Theresa May in her European Council Summit feedback to Parliament yesterday, 22 October 2018).

The government has consistently estimated that between 800 and 1,000 new and amended SIs need approval in order to prepare the Nation for exit day. Today, the Hansard Society reports that their ‘Brexit statutory instruments dashboard’ shows just 71 Brexit-related SIs have been laid before Parliament since the EU (Withdrawal) Act received royal assent on 26 June.

Half the time available to March 2019 has elapsed but – but around 10% of the necessary SIs have been laid before parliament.

If you want to understand the concern coming through about our democracy and the rule of law – it is here. Instead of due process of regulation - established over 400 years ago - Ministers may need to adopt ‘emergency powers’ to by-pass Parliamentary scrutiny and approvals.

Two Parliamentary Committees have been tasked with “sifting” proposed negative SIs laid before them using powers in the Act and deciding whether any of them should be upgraded to the affirmative scrutiny procedure and thus be debated by MPs and peers. This process was introduced into the EU (Withdrawal) Bill to give MPs greater oversight of the changes to the statute book arising from Brexit. However, the slow rate at which the government is laying the SIs before parliament means that the clock is ticking on the effectiveness of the process.

Unless the pace picks up – and it is difficult to see how Sis can be drafted with any certainly until the negotiations end and details of the draft Agreement becomes known – even this sifting may have to be bypassed. Presently ‘normal ‘ SIs are subject to a 40-day scrutiny period. The ‘urgent case’ procedure gets legislation through Parliament with the only constraint being that Government must table a written statement explaining the need for urgency – and popularly known as Henry VIII clauses.

The government promised that it would try to avoid a “peak and trough” approach to the production of SIs so that Parliament could do its job properly. It needs to deliver on that promise.

There seems to be little recognition in Parliament that time is needed for citizens and business to plan and implement the consequential changes to the lives and operations once the SI’s have been formally approved and issued – whether via the normal or urgent process.

Over dramatic? It took us several years to plan and prepare to mitigate the impacts on IT systems from the ‘Millennium Bug’ – and there were some spectacular failures that had to be dealt with after the effect. It took 5 years from publication of the Treaty to plan and prepare for 12 countries to change their currency to the Euro – and there were some spectacular failures that had to be dealt with after the fact.

Each of these changes was an order of magnitude smaller than Brexit. We have been working scenarios and developing practical mitigation and contingency plans across government and commerce. March 29, 2019 is a Friday – so at least there is the quiet of a weekend before the impacts of missing guidance and operating procedures really bite.

Background - Henry VIII clauses

UK Parliamentary procedure allows for “Secondary” legislation through Statutory Instruments - used by the Government to add, edit or amend Primary laws.

The power is nicknamed ‘Henry VIII’ - after the King and the Statute of Proclamations, 1539 - which allowed him to overrule Parliament with a “swift flick of the quill”.

The EU (Withdrawal) Bill grants the power to deal with existing UK laws – most of which have come from or are related to EU Law, Directives and Regulations – without any documented limits.

Background: Technical Notices

Driving & Transport: Aviation safety; Aviation security; Driving in the EU if there's no Brexit deal; Flights to and from the UK; Operating bus or coach services abroad; Vehicle insurance; Rail transport; Meeting rail safety and standards.

Farming & Fishing: Farm payments ; Manufacturing and marketing fertilisers; Receiving rural development funding; Regulating pesticides; Commercial fishing; Plant variety rights and marketing of seed and propagating material; Breeding animals.

Applying for EU-funded programme: Connecting Europe Facility energy funding if there's no Brexit deal; Delivering humanitarian aid programmes; European Regional Development Funding; European Social Fund (ESF) grants; European Territorial Cooperation funding; Funding for UK LIFE projects; Horizon 2020 funding if there's no Brexit deal; The government’s guarantee for EU-funded programmes; Funding for British Overseas Territories.

Handling civil legal cases that involve EU countries

Importing and exporting: Buying and selling timber; Classifying your goods in the UK Trade Tariff if there's no Brexit deal; Commercial road haulage in the EU; Exporting animals and animal products; Exporting controlled goods if there's no Brexit deal; Importing and exporting plants; Importing animals and animal products; Trade remedies if there's no Brexit deal; Trading with the EU if there's no Brexit deal; Exporting GM food and animal feed products; Exporting objects of cultural interest; Trading and moving endangered species protected by CITES; Maintaining the continuity of waste shipments; Existing free trade agreements; Importing high-risk food and animal feed.

Labelling products and making them safe: Appointing nominated persons to your business; Developing genetically modified organisms (GMOs); Labelling tobacco products and e-cigarettes; Producing and labelling food; Producing and processing organic food; Protecting geographical food and drink names; Regulating chemicals (REACH); Trading under the mutual recognition principle; Trading goods regulated under the ‘New Approach’; Travelling with a European Firearms Pass; Vehicle type approval; Control on mercury; Control on persistent organic pollutants; Regulating biocidal products; Classifying, labelling and packaging chemicals; Health marks on meat, fish and dairy products; Export and import of hazardous chemicals.

Meeting business regulations: Accessing public sector contracts; Broadcasting and video on demand; Copyright; Exhaustion of intellectual property rights; Merger review and anti-competitive activity; Patents; Trademarks and designs; What telecoms businesses should do; Accounting and audit; Providing services including those of a qualified professional; Structuring your business.

Money and tax: Banking, insurance and other financial services; VAT for businesses; Personal data and consumer rights; Data protection; Geo-blocking of online content; Consumer rights.

Protecting the environment: Industrial emissions standards (‘best available techniques’); Reporting CO2 emissions for new cars and vans; Upholding environmental standards; Using and trading in fluorinated gases and ozone depleting substances; Meeting climate change requirements

Regulating energy: Civil nuclear regulation; Generating low-carbon electricity; Nuclear research; Running an oil or gas business; Trading gas with the EU if there's no Brexit deal; Trading electricity.

Regulating medicines and medical equipment: Batch testing medicines; Ensuring blood and blood products are safe; How medicines, medical devices and clinical trials would be regulated; Quality and safety of organs, tissues and cells; Submitting regulatory information on medical products; Trading in drug precursors.

Regulating veterinary medicines: Accessing animal medicine IT systems; Registration of veterinary medicines; Regulation of veterinary medicines.

Sanctions policy if there's no Brexit deal.

Satellites and space programmes.

Seafaring: Getting an exemption from maritime security notifications; Recognition of seafarer certificates of competency.

State aid if there's no Brexit deal.

Studying in the UK or the EU: Erasmus+ in the UK.

Travelling between the UK and the EU: Mobile roaming; Taking your pet; Travelling in the Common Travel Area; Travelling to the EU with a UK passport; Taking horses abroad.

This article was produced by Brexit Partners and first appeared on Tuesday 23rd October.

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