Landmark Chambers

Home > Resources > Brexit Blog

Brexit Blog

Being outside of the single market: The White Paper, article 137 of the European Economic Area Treaty and dispute resolution without the European Court of Justice

The White Paper explains the 12 principles that the PM set out on 17 January 2017 to guide the Government in “fulfilling the democratic will of the people of the UK” (see the Preface by Secretary of Sate for Exiting the European Union).

Much of the content is as expected. However, three points initially caught my eye.

Is there really unanimous support for the Government’s negotiations?

In her Foreword to the White Paper, the PM suggests:

And another thing that’s important. The essential ingredient of our success. The strength and support of 65 million people willing us to make it happen.”

65 million is presumably the UK’s whole population. So every single living person in the UK is assumed to be supporting the Government in its negotiations with the EU. That seems a brave assumption, given that those who voted to leave the EU amounted to 17.4 million (and 16.14m voted to remain). Some 46.5 million were entitled to vote in the Referendum in the UK, made up of:

England:                                 39 million

Scotland:                                3.98 million

Wales:                                     2.27 million

Northern Ireland:                   1.26 million

Gibraltar:                                  24,117

The turnout (of just under 33.6 million) was 72.2% of the electorate.

If reliance on the 65 million figure is intended to portray the UK as unified in backing the Government in the negotiations with the EU, that seems highly unlikely. On any account, there is a very significant no who did not vote to leave – over 29 million  of the electorate or 47 million of the population.

The single market and article 127

However, as said before, those who voted in favour of leaving have to be respected as a legitimate majority in terms of the vote to leave. Nonethless, and as mentioned in my post on this Blog last Thursday (2 February), even the 17.4 million leave voters cannot legitimately all be taken as having voted to leave the single market. That outcome was not specified as part of the single referendum question or the two options for the answer. Yet, the White Paper (at the beginning of Section 8, Ensuring free trade with European markets) confirms what the PM had already made clear in January:

The Government will prioritise securing the freest and most frictionless trade possible in goods and services between the UK and the EU. We will not be seeking membership of the Single Market, but will pursue instead a new strategic partnership with the EU, including an ambitious and comprehensive Free Trade Agreement and a new customs agreement.

The proposals for the UK outside of the single market is of course highly contentious, including for the Scottish Government. I also mentioned in my previous post that the progress of the Bill and the article 50 trigger may be dependent in part upon the outcome of fresh legal proceedings. One such challenge failed last week, as was reported by The Guardian (on Friday 3 February 2017).

That new case revolved around article 127 of the European Economic Area (EEA) Treaty, which provides:

Each contracting party may withdraw from this agreement provided it gives at least 12 months’ notice in writing to the other contracting parties.

Immediately after the notification of the intended withdrawal, the other Contracting Parties shall convene a diplomatic conference in order to envisage the necessary modifications to bring to the Agreement.”

The challenge was brought by Adrian Yalland and Peter Wilding, who runs the pro-single market organisation British Influence. The Claimants argued that the Government’s failure to specify what legal mechanism it would use for quitting the EEA was in danger of creating “profound legal uncertainty and chaos”. It was further argued that the Court of Justice of the European Union (CJEU), may need to be consulted to resolve the confusion over how the UK “disentangles” itself from other European states. They maintained that the PM had already announced that the UK would be leaving the EEA and the single market.

The Government argued that since ministers had not yet decided which legal route would be taken to leave the EEA, the challenge was “premature” and should be rejected. Lord Justice Lloyd Jones and Mr Justice Lewis, sitting in the High Court, agreed and dismissed the application judicial for judicial review.

The Claimants are nonetheless reported as maintaining that the decision leaves the door ajar for a future challenge, if the Government does not resolve the issue. The article also states, however, that the Government:

….. also argued that when the UK leaves the EU it will automatically at the same time leave the EEA. Alternatively, a conference of all the member states of the EEA could be called to renegotiate a new relationship.

A government spokesperson said: “We are glad this attempt to seek a judicial review has been dismissed. As the prime minister has said, we will not be a member of the single market and we will be seeking a broad new partnership with the EU including a bold and ambitious free trade agreement.”

Taking control of own laws and the alternative to resolving disputes

The second of the PM’s twelve principles  for Brexit is “Taking control of our own laws”.

This involves bringing to an end the jurisdiction in the UK of the CJEU. On this the White Paper states:

2.2  Leaving the EU will mean that our laws will be made in London, Edinburgh, Cardiff and Belfast, and will be based on the specific interests and values of the UK. In chapter 1 we set out how the Great Repeal Bill will ensure that our legislatures and courts will be the final decision makers in our country.

It is also stated that the UK will continue to honour its international commitments and follow international law (para. 2.3).

Notwithstanding the UK will be outside of the single market, the White Paper recognises (at para. 2.4) that “…….. ensuring a fair and equitable implementation of our future relationship with the EU requires provision for dispute resolution.” Such mechanisms, the White Paper points out, are common in EU-Third Country agreements and gives the example of the new EU-Canada Comprehensive Economic and Trade Agreement (CETA) established a “CETA Joint Committee” to supervise the implementation and application of the agreement. As the White Paper points out (para. 2.8), dispute resolution in such agreements does not have direct effect in UK law, unlike decisions made by the CJEU.

It is intended that the UK will seek to agree a new approach to interpretation and dispute resolution within the EU. This, it is said, is essential to reassure businesses and individuals that the terms of any agreement can be relied upon. The White Paper provides (in Annex A) a number of examples to illustrate other international agreements approach interpretation and dispute resolution. This section concludes with the sovereignty theme (para. 2.10):

“…Any arrangements must be ones that respect UK sovereignty, protect the role of our courts and maximize legal certainty, including for businesses, consumers, workers and other citizens.”

Progress of the Withdrawal Bill

No doubt close scrutiny of the White Paper will be attempted by some during the next stages of the Withdrawal Bill, starting with the Committee Stage today. The Committee of the whole House is scheduled to take place over the 3 days to Wednesday. The remaining stages (the Report Stage and Third Reading) are also scheduled to take place on Wednesday.

The PM has made it clear that she will not accept any amendments to the Bill from her backbench rebels. The Labour Party has stated that it will not frustrate the Bill, even if their amendments are not included in the Bill. How the amendments put forward by others, in particular the SNP and the Liberals, will play out will only become clearer as the Bill progresses this week.