The Withdrawal Agreement Bill is progressing rapidly to enactment. What does it mean?
What's the issue?
We know everyone has had enough of reading about Brexit but there is now no doubt that it is going ahead so it's just worth briefly going over what happens next. We are going to try not to be overwhelmed by Brexit this year but with Boris Johnson promising the UK will not align with EU law, coupled with the exceptionally tight timeframe before the end of the transition period on 31 December 2020, we do need to watch developments closely.
What's the development?
The Withdrawal Agreement Bill (WAB) is on its way to enactment. This is the legislation that deals with the transition period. It:
- Implements the aspects of the EU-UK Withdrawal Agreement (the agreement with the EU about departure) which need to have effect in UK law.
- Delays the effect of much of the EU Withdrawal Act (which gives effect to Brexit in the UK) until the end of transition, effectively maintaining the status quo and making it feel as though we are still in the EU.
The WAB has, however, changed since the general election to reduce parliamentary scrutiny and oversight of the future relationship negotiations. Many of the changes reflect Johnson's promise that the transition period will not be extended and that the UK will diverge from EU rules.
The following elements have been removed:
- The clause giving MPs the right to approve an extension to transition.
- The clause 31 requirement for parliamentary approval of the negotiating position on the future relationship.
- Legal protections for refugee children reunited with family in the UK have been watered down and provisions relating to unaccompanied minors seeking asylum removed.
- The commitment to negotiate the future relationship in line with the political declaration.
- Removal of clauses pledging alignment on workers' rights.
There are also some additions:
- A clause preventing an extension of the transition period and locking in the time of departure.
- New powers in several areas including Northern Ireland, to change Brexit-related law through secondary rather than primary legislation.
- The power for the House of Lords to scrutinise EU legislation of vital national interest to the UK during the transition period. The House of Commons already has similar powers.
What does this mean for you?
The initial message is that, for now, nothing changes. The WAB allows for a transition (or implementation) period which in essence postpones the effect of Brexit in order to allow the future relationship to be agreed. The initial period will run until the end of 2020. Under the Withdrawal Agreement with the EU, the transition period can be extended once for up to two years by mutual agreement before 1 July 2020 but the WAB prevents an extension from happening.
When originally agreed, the initial transition period was expected to be two years but the Brexit delays have reduced this by more than half. It seems remarkably optimistic to expect a hugely complicated trade deal to be done with the EU in less than a year. It is true that the UK starts from a place of convergence but the average EU trade deal takes 48 months to negotiate and it must be approved by each Member State and, in some cases, by their constituent parts.
What happens at the end of the initial transition period? If the future relationship is all done and dusted, then we proceed on the basis of what has been agreed. If, however, there is no agreement by that time and the government does not seek an extension, then we are, once again, looking at a no deal scenario and WTO terms for trade. Alternatively, it is also possible that a series of agreements or aspects of the future relationship may be agreed one by one and that there will be some sort of hybrid regime in place for a period of time.
Unfortunately, that means more uncertainty as we wait to see what, if anything, is agreed, and how it impacts on various businesses.
Key dates for 2020:
- 11pm, 31 January – UK leaves the EU but remains in customs union and single market
- 25 February – EU expected to have agreed mandate for trade negotiations
- 1 July – Deadline for UK to request one-off extension to transition period of either one or two years (currently prevented under the WAB)
- 31 December – Transition ends (unless extended). New trading relationship begins to the extent agreed. If no agreement, trade to take place on WTO terms. Northern Ireland and EU enter into four year alignment period.
