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Brexit Update

Brexit- Jigsaw pieces showing Union Jack and EU Flag Print publication

06/03/2017

This note provides an update on Brexit-related matters in light of recent developments.

The European Commission publishes White Paper on the future Europe

On 1 March 2017, the European Commission (“EC”) proposed five different scenarios for a future European Union (“EU”) following the UK’s departure. How the EU operates after Brexit will have far-reaching consequences, not least for trade, financial services, competition and technology.

The EC’s ‘White Paper on the future of Europe’ puts forward five illustrative possibilities which are stated to be neither mutually exclusive nor exhaustive:

  • The first, referred to as Scenario 1: Carrying On is likely to be a realistic possibility. In this option the status quo will largely be maintained, with the new EU focusing on delivering its reform agenda in the spirit of the EC’s New Start for Europe from 2014 and of the Bratislava Declaration agreed by all 27 Member States in 2016.
  • In Scenario 2: Nothing but the Single Market, the EU becomes simply a trade bloc, which would mean free movement for goods, services and capital, but not for business people or tourism. The EU would not have a hand in international issues such as tax evasion and climate change and even eurozone cooperative projects would, in all likelihood, be pared back.
  • Scenario 3: Those Who Want More Do More envisages a future EU which proceeds as today but allows willing Member States to do more together in specific areas such as defence, internal security or social matters. This scenario quite closely mirrors the “multispeed Europe” which German Chancellor Angela Merkel has called for, and could win significant support from the EU’s national governments, but this could mean that citizens’ rights would start to vary depending on in which Member State they reside.
  • Scenario 4: Doing Less More Efficiently has been referred to in the press as the “divide and rule” option. It involves the future EU focusing on delivering more in selected policy areas (such as trade, security, migration, the management of borders and competition law), while withdrawing from some other areas.  Ultimately this option could involve a clearer division of responsibility and a better understanding of matters handled at European and national level, but initially there could be difficulty in agreeing the areas which the EU should prioritise.
  • A final option and one that is not considered likely, is Scenario 5: Doing Much More Together. In this scenario Member States decide to share more power, resources and decision-making across the board than ever before.  While this could mean that decisions are agreed faster at European level and rapidly enforced, it could also result in the alienation of those who feel that the EU has already taken away too much power from national authorities.

EC President, Jean-Paul Juncker, has said that he has no preference for any of the scenarios and has asked Member State leaders to express their views at a summit meeting in December, with a view to the EC mapping out a path for the future of the EU in 2018.

The “Three Knights Legal Opinion” on Brexit

On 17 February 2017, advice commissioned by Bindmans, the “Three Knights Opinion” (Sir David Edward QC, Sir Francis Jacobs QC, and Sir Jeremy Lever QC – as well as Helen Mount QC and Gerry Facenna QC), was published.  The legal opinion was submitted to the House of Lords just before the second reading of the EU (Notification of Withdrawal” Bill (“Bill”).

The legal opinion considers the UK’s constitutional requirements for withdrawing from the EU under Article 50 of the Treaty on European Union, and whether an Article 50 notice can be unilaterally revoked if those constitutional requirements are not met.

In brief, the legal opinion argues that:

  • Article 50 states: “any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements”.
  • It is a requirement of the UK constitution that Parliament’s authorisation is needed for either:
    • the final terms of the UK’s withdrawal agreement with the EU; or
    • the UK withdrawing from the EU without agreement being reached.
  • If Parliament does not approve the final terms (or approve leaving the EU without a withdrawal agreement), the Article 50 notice will lapse and the UK will remain in the EU.
  • Alternatively, Parliament could simply decide to revoke the Article 50 Notice and the UK would remain in the EU.

 House of Lords Article 50 debate

On 1 March 2017, the House of Lords voted to amend the Bill to force the Government to guarantee the rights of EU citizens living in the UK.  The amendment calls for the Government to bring forward proposals ensuring the rights of EU citizens living in the UK, within three months of triggering Article 50.

However, it has been reported that the Government is confident that the amendment will be rejected by Parliament later this month. The Government has also insisted the timetable for triggering Article 50 remains unchanged.

The House of Lords will vote on 7 March 2017 on a further amendment, which would give Parliament a “meaningful” vote on the outcome of the Government’s Brexit negotiations.

The amended Bill is expected to return to Parliament on 13 and 14 March 2017 when MPs will debate whether to accept the changes proposed by the House of Lords.

Article 50 Notice

It has been reported that the Government intends to notify the EU of the UK’s intention to leave on 15 March 2017, triggering two years of negotiation that would end with the UK leaving the EU in 2019 (unless this period is extended by unanimous agreement between the UK and all EU Member States).

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