Opinion: Can the government breach the Brexit Withdrawal Agreement?
"This is a remarkable development" - the FT's David Allen Green explains the legal issues behind this potential constitutional crisis in his guided tour of the law
Produced by Tom Hannen
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This week, a minister in the House of Commons said that the government is deliberately contemplating breaking the law.
Yes, this does break international law in a very specific and limited way.
This is a remarkable, if not spectacular development, and raises obvious broad constitutional issues such as the rule of law, the notion that the government should have a legal basis for what it does and should be bound by the law.
But as well as these broad constitutional issues, what is the underlying legal issue? What has triggered this potential constitutional crisis? The problem is about something called state aid and how it is to be dealt with on the island of Ireland after Brexit takes full effect on the 1st of January 2021.
State aid rules are an element of the European Union's single market. The single market is often understood to mean the four so-called "freedoms", freedom of movement of persons, goods, services, and capital. But the single market also includes the ways by which competitiveness is enforced, competition laws, public procurement, state aid. State aid is about the extent to which governments can subsidise or assist - that is - aid businesses. The objective is to avoid governments unfairly subsidising businesses to the disadvantage of competitors.
The European Union's single market, to a large extent, came about because of the political support in the 1980's of Conservative Prime Minister Margaret Thatcher. The conservative European commissioner Arthur Cockfield worked with the then-commission president Jacques Delors to put in place a single market by 1992. State aid rules are a fundamental component of the single market. It stops governments picking winners and national champions. As such it is very much a legal cornerstone of Thatcherite economics.
When the United Kingdom voted to leave the European Union, a number of complex problems were created, including the single market, but also many other issues. Many of these issues were addressed in the Withdrawal Agreement that was signed in October 2019, a monster document with over 540 pages. The problems created by Brexit for the single market were further complicated by the Irish border and the general view that there should be no barrier on the island of Ireland in respect of commercial or economic activity, and so it was agreed by the United Kingdom and the European Union that a substantial part of the Withdrawal Agreement was to be dedicated to dealing with the special problems created by the Irish border and the single market.
A key part of the Withdrawal Agreement is this protocol on Ireland, and within that protocol sits Article 10. Article 10 deals with state aid and the island of Ireland, but you will see in the first sentence of the provision it says that "The provisions of Union law listed in Annex 5, which are the state aid rules, "shall apply to the United Kingdom," including dot, dot, dot. What this means on the face of it is that the whole of the United Kingdom has to have some sort of formal relationship with EU state aid law, even after the United Kingdom fully leaves the European Union next year.
The Withdrawal Agreement, including the protocol and including this Article 10, was enacted into UK law by the Withdrawal Agreement Act of January 2020, which, in turn, followed a general election where the Conservative party had ask an express manifesto commitment that it was going to put into place the Withdrawal Agreement, which the leader of the Conservative Party, Boris Johnson, described as oven-ready. But since January, the government has become increasingly concerned about state aid. It wants the freedom and flexibility to aid businesses in a way which may otherwise be prohibited by EU state aid rules. This would mean that they would have a problem with Article 10, and so they have to find a way of dealing with the issue of Article 10 saying that the provisions of the EU law in respect to state aid shall apply to the United Kingdom
in an agreement, which the government, this government, had freely entered into in October. The way the government has decided to deal with this problem is the Internal Market Bill. This is a new piece of legislation which has just been published and put before parliament, and in Part 5 of this bill, you have provisions for how the government is seeking to deal with the problems created by Article 10 of the Irish protocol.
If we look at Part 5, we will see it is entitled "Northern Ireland Protocol". There is, in italics, a subtitle, "Northern Ireland's place in the United Kingdom internal market and customs territory". You will see that is repeated as the title of clause 40, and at clause 41, we have the title "Unfettered access to the UK internal market for Northern Ireland goods". At clause 42, we have the power to disapply or modify export declarations and other exit procedures. These are technical points, but they are important, as we will see.
In clause 43, we have expressed mention of the Northern Ireland Protocol, Article 10, and you will see, at clause 43-2 we have the provision which says "Regulations may make provision about the interpretation of Article 10 and disapplying or modifying the effect of Article 10". This is then followed by the remarkable clause 45. Clause 45 has, in the first sub-clause, "The following shall have effect not withstanding any relevant international or domestic law with which they may be incompatible or inconsistent, section 42, regulations under section 42, section 43, regulations made under section 43". What clause 45 is saying is that these provisions will have legal effect, regardless of them being unlawful under the Withdrawal Agreement and the Withdrawal Agreement Implementation Act.
Then in clause 45-2, at sub-clause a, we have expressly "regulations under sections 42 and 43 will not be regarded as unlawful on the grounds of any incompatibility or inconsistency with relevant international or domestic law". That is a stunning provision. It's beautifully elegant in its drafting, but what it is saying is that this government can do things which are unlawful. That this is the intention of the government is made plain by the accompanying explanatory notes to the bill.
You will see at paragraph 63, that the government seeks to ensure that the provisions of the Internal Market Bill relating to exit procedures and also the ability to make regulations regarding Article 10 of Northern Ireland Protocol are able to have effect not withstanding any relevant international or domestic law with which they may be incompatible or inconsistent. When the minister in the House of Commons said that for breaches of law would only be specific and limited, that is not true. These provisions are not specific and limited, or not as specific and limited as they could be, because they cover any regulations which are made under two sections of the bill. This isn't just one self-contained provision. This is a general power to remove the effect of the Withdrawal Agreement.
This bill is still at an early stage in its passage through parliament. It may well be that the relevant provisions do not survive the House of Commons. It also is likely that the relevant provisions, if they survive the Commons, do not survive the Lords, because the Lords is in the slightly strange situation of being able to uphold the government's own manifesto commitment against the government, under the so-called Salisbury Convention, which means that they can delay or even vote down relevant legislation which are in breach of a manifesto commitment. But even if it does pass both the Commons and the Lords and receives Royal Assent and becomes primary legislation, it may well be that there is a case which goes up to the Supreme Court to show that this is not an approach which can be adopted in primary legislation. The government cannot put in a provision which says we are above or beyond the law.
The European Union has also taken the first step in a dispute resolution process already and has asked for an extraordinary meeting of the joint committee which oversees the implementation of the Withdrawal Agreement. It may well be that these provisions do not end up as part of the law. It may well be that, at some point, the government is defeated or has to perform a U-turn. This situation is already more serious than any other potential constitutional crisis we have had so far in respect of Brexit.
The government has, on other occasions, threatened to do one thing or another, but has chosen not to do it, but this is at a more advanced stage. The government's senior legal officer has resigned over this. A member of the cabinet has told the Commons that the government is deliberately seeking to break the law. The government's presented legislation which says that provisions will have effect regardless of whether they are unlawful on other grounds.
This is a new type of situation, but any constitutional legal crisis, potential or otherwise, exists on two levels. There's the general plane of first principles. Here, things like the rule of law, the role of the Commons and the Lords, the situation of the Irish border, even the devolved administrations.
But a constitutional and legal crisis also exists on a particular plane. What is the actual issue here which the government is choosing to force the crisis over? The government has a problem with Article 10 of the Irish protocol. It could have chosen to swallow that. It could have chosen to try and find some sort of work around, but it has chosen this way, to try and see if it can get away with what would be a significant breach of constitutional norms and values.
We do not know yet whether it will succeed. It probably won't, but it could do. But the problem of the border in Ireland will still be there in the morning, regardless of whether a constitutional crisis is forced on this or not, and it's hard to see how forcing the constitutional crisis over the issue of state aid on the island of Ireland, given that it is an integral part of the single market, is going to succeed in solving the problem which the government faces about how you maintain the integrity of the single market in Ireland after Brexit.