Kenneth Armstrong, Professor of European Law at University of Cambridge, analyses the recently published United Kingdom Internal Market Bill in this post. He assesses the compatibility of the Bill with the Withdrawal Agreement, and considers the legal consequences of a Bill inconsistent with the Agreement.
The United Kingdom Internal Market Bill
Amidst increasing concern about the UK Government’s intentions in respect of implementation of the EU-UK Withdrawal Agreement and the Protocol on Ireland/Northern Ireland the European Commission President Ursula von der Leyen took to Twitter to state:
“I trust the British government to implement the Withdrawal Agreement, an obligation under international law & prerequisite for any future partnership. Protocol on Ireland/Northern Ireland is essential to protect peace and stability on the island & integrity of the single market.”
By the next day, the UK’s Northern Ireland Secretary, in reply to an urgent question about proposals to be published in a forthcoming bill on the UK internal market, conceded:
“yes, this does break international law in a very specific and limited way. We are taking the power to disapply the EU law concept of direct effect, required by article 4, in certain very tightly defined circumstances.”
The United Kingdom Internal Market Bill has now been published. Albeit that its principal objective is to manage the free movement of goods, services and the recognition of professional qualifications in a post-Brexit UK where regulatory divergences may increase without the constraints of EU internal market law, it is the changes to the implementation and application of the Withdrawal Agreement and the NI Protocol that are both eye catching and eye watering.
As I trailed in a post on Verfassungsblog, Article 4 of the Withdrawal Agreement seeks to apply the direct effect and enforcement qualities of the EU treaties in the context of the Withdrawal Agreement. That entails two moves. The first is that provisions of the Agreement (and the NI Protocol (which is an integral part of the Agreement)) can be enforced directly, including in UK courts. Secondly, and crucially, UK courts are to be empowered to disapply inconsistent and incompatible provisions of domestic law. The UK agreed to enact primary legislation to ensure that UK courts would have this jurisdiction.
The UK duly implemented the Agreement through the European Union (Withdrawal Agreement) Act 2020 and the amendments it makes to the European Union (Withdrawal) Act 2018. The Article 4 requirements are given effect via sections 7A-7C of the 2018 Act. In summary, the Act deploys the same kind of wording and technique used in section 2(1) of the European Communities Act 1972 to secure the direct effect of the Agreement and the availability and enforcement of its provisions without further enactment. Section 7A(3) also seeks to prevent any implied repeal in a manner similar to the operation of section 2(4) of the 1972 Act. By using these familiar constitutional techniques, no doubt the intention was to reassure the EU that the UK intended to fulfil its legal obligations.
The fly in the ointment, however, is contained in section 38 of the 2020 Act. The so-called ‘sovereignty clause’ requires that sections 7A-7C are read as not derogating from the sovereignty of Parliament. While this could have given the EU cause for concern, it was always the case that any legislation implementing the Withdrawal Agreement was subject to the principle of the sovereignty of Parliament and so spelling this out in the Act did not of itself render the Act incompatible with Article 4 provided that in practice the Agreement could be enforced and inconsistent provisions disapplied.
This is where certain provisions of the Internal Market Bill drive a coach and horses through the UK’s implementation of the Withdrawal Agreement.
The first issue is whether the Bill does in fact produce incompatibilities with requirements under the Withdrawal Agreement. The second issue is – if there are incompatibilities – whether the Article 4 requirement of disapplication can itself be disapplied.
There are two main areas of potential conflict between the UK’s proposals for an internal market and the operation of the NI Protocol – the movement of goods between NI and GB and the application of EU state aid rules.
As regards the former, while it is clear that in respect of goods, NI remains bound to comply with the EU acquis on customs requirements and other regulatory requirements, Article 6 of the Protocol does also state:
‘Nothing in this Protocol shall prevent the United Kingdom from ensuring unfettered market access for goods moving from Northern Ireland to other parts of the United Kingdom’s internal market.’
Squaring the circle between compliance with EU rules and ‘unfettered access’ was never going to be an easy task and one that would require collaboration between the EU and the UK through the Joint Committee and its specialized committees established under the Agreement. Clauses 40 and 41 of the Bill seek to ensure that in implementing the Protocol, authorities have regard to Northern Ireland’s place in the UK internal market and the right of unfettered market access. More specifically, Clause 41 seeks to inhibit new controls on the movement of goods between NI and GB. However, Clause 42 goes further by empowering ministers to disapply or modify the application of exit procedures including exit procedures applicable by virtue of the Protocol.
As for state aid, Clause 43 of the Bill purports to modify the application of Article 10 of the Protocol which applies EU state aid rules to Northern Ireland. The Secretary of State is empowered to make regulations about the interpretation of Article 10 – Article 13(2) of the Protocol states that its provisions have to be interpreted in conformity with the relevant case law of the Court of Justice of the EU – and to disapply or modify the effect of Article 10.
So it is clear that the Bill would include provisions that are inconsistent or incompatible with the Agreement. In terms of Article 4 of the Agreement, those provisions should be capable of disapplication by UK courts.
Enter Clause 45 of the Bill. It requires that Clauses 42 and 43 (and regulations made under them) have effect notwithstanding any incompatibilities or inconsistencies with international agreements or domestic law and any regulations are not unlawful because of such inconsistencies. But more explosively, the effect generated by section 7A to give effect to the Withdrawal Agreement ceases to have effect in respect of incompatible and inconsistent provisions of the Bill identified in Clause 45. And in a reversal of the normal rule that statutes are interpreted in conformity with international obligations, Clause 45(2)(c) states instead that the interpretation of the Withdrawal Agreement should not be incompatible or inconsistent with Clause 45.
The result is the dilemma familiar to UK constitutional lawyers and one much discussed during the lifetime of the UK’s membership of the EU. Should a UK court give effect to substantive provisions of domestic legislation which are clearly and admittedly in breach of the obligations entered into by the United Kingdom and given domestic legal effect through legislation passed to ensure the UK’s orderly withdrawal from the EU, or should a court disapply such provisions as being inconsistent with the Withdrawal Agreement and not saved by the devices created by legislation which are themselves incompatible with the Agreement?
It is hard to see how this can avoid embroiling the Supreme Court in another round of Brexit litigation. It is a fight that, perhaps, the Government actually wants.
Note: The views expressed in this post are those of the author, and not of the UCL European Institute, nor of UCL.