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Brexit Bulletin: Article 50 by the End of March and the Great Repeal Bill

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May has started to set out her stall after a period of preparation and technical work over the Summer.

Article 50 will be triggered before the end of March, without a vote to approve this formally in Parliament.

This means that the U.K. is likely to leave the EU before the end of March 2019, well before the European Parliament elections in May 2019.

This signifies that she is not delaying Brexit and will avoid the huge political problems that she would have faced by waiting until the Summer or Autumn of next year as George Osborne had suggested.

It means that it will be triggered before the French Presidential and German Federal elections in 2017. This means that the first 6-9 months of negotiation will be technical and exploratory - preparing the ground for when actual decisions can be made by the EU after the new French President and German Chancellor are decided. It means that all of the real decisions will be made and the deal agreed (or not agreed) in 2018.

She has also acted to please the Brexiteers and ensure a smoother transition by promising to introduce the Great Repeal Bill in the Queen’s Speech in April/May of 2017.

The Bill will be law in 2018 but will only be brought into force on the day the U.K. leaves the EU in early 2019.

It repeals the European Communities Act of 1972 that gave EU law and the European Court of Justice supremacy over U.K. law.

For eurosceptics, repealing this Act is one of the things they have always wanted as it means that the U.K. is sovereign once again, that the U.K. Parliament makes all of the laws again for the U.K., and that the ECJ has no power anymore over British courts.

The Bill will adopt all EU Regulations (unlike EU Directives, these are not already part of U.K. law) into U.K. law.

The rules are therefore in place and they can then be amended, improved or repealed at the UK’s leisure after the U.K. leaves the EU.

There will be important powers in this Bill for the U.K. to prepare regulatory rules and structures that will be needed for when the U.K. exits in 2019. So where regulation is currently covered by an EU body or regulator, the Bill will allow preparatory powers to be in place for a U.K. regulator or the U.K. government to be put into effect on the day the U.K. leaves.

This should prevent a vacuum being created on day one. UK businesses will need to work with Government to help to put in place any regulatory structures that may be required to be in place by the time the U.K. leaves.

There will be powers in the Bill to amend regulations by Statutory Instrument (SI). If needed during the course of the negotiations, certain changes could be made before the U.K. leaves the EU.

The Act was inevitable but putting it to Parliament in the next Queen’s Speech involves Parliament in Brexit when it is not going to be formally consulted over the invocation of Article 50.

The speeches of the Prime Minister and the Secretary of State for Exiting the EU at the Tory party conference made clear that Brexit will happen, there is no reversing it and that the U.K. will control its borders, its laws and its money. May specifically said the U.K. will not follow the Norway (EEA) or Switzerland models.

The announcements over the last few days suggest that the May Government will control migration (probably through a work permit system), have to leave the Single Market as a result, seek a transitional trade deal with the EU that would ideally mean no tariffs and perhaps regulatory equivalence and mean that the U.K. has restored its sovereignty by March 2019.

Negotiations would then begin on a full trade deal with the EU after that point.

No decision has yet been made on whether or not the U.K. will leave the Customs Union on the day of leaving the EU, remain in it for a transitional period, or remain in it permanently. The first two of these options are probably more likely than the third. The Treasury is currently assessing the economic damage and uncertainty and implications of leaving the Customs Union.

With these two announcements today, May has bought herself goodwill from the eurosceptics that could possibly give her the political space to stay in the Customs Union for a transitional period after the UK leaves the EU if that was essential for the economy. But this is not decided yet and indeed the Customs Union was not even mentioned in May’s speech.

May will have one year from leaving the EU in early 2019 to prepare for the 2020 general election. The Conservative manifesto will set out what the Tories would do between 2020 2025 with the UK’s new found freedom to agree its own laws.

Brexit Bulletin is a joint publication of Teneo’s business segments. It is produced by a team of experts at the heart of the European quarter in Brussels and in London.

The views and opinions in these articles are solely of the authors and do not necessarily reflect those of Teneo. They are offered to stimulate thought and discussion and not as legal, financial, accounting, tax or other professional advice or counsel.

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