09 Sep 2019

Even with royal assent, the emergency legislation that completed its House of Lords stages on 6 September cannot definitively rule out a "no deal" Brexit. Indeed, its terms simply provide a 19 October deadline for further steps to be taken in the House of Commons. The potential outcomes are:

  • A House of Commons resolution to approve a withdrawal agreement, whether in the form of a new draft brought back from the EU Council meeting scheduled for 17-18 October, or following a fourth vote on the draft negotiated during Theresa May's premiership
  • A House of Commons resolution to authorise Brexit on a "no deal" basis; or
  • An instruction to the Prime Minister to seek a further extension of the Article 50 notice period up to 31 January 2019.

While attention has focused on the possibility of the Prime Minister challenging or even ignoring any instruction to seek a further extension, the real risk of a "no deal" outcome arguably stems not from the EU (Withdrawal) Act 2018, but from a relatively obscure section in the Taxation (Cross-Border Trade) Act 2018. Under section 31 of that Act, the UK may enter into a post-Brexit customs union with any country or territory, except the EU, by means of an Order in Council. Section 31(5) was inserted as an amendment by the European Research Group (ERG), and creates that significant EU exception. It says:

  • In the case of a customs union between the United Kingdom and the European Union, Her Majesty may not make a declaration by Order in Council under subsection (4) unless the arrangements have been approved by an Act of Parliament.

The result is that any post-Brexit customs union between the United Kingdom and the EU would require a full Act of Parliament. That would seem to include any temporary customs union forming part of transition provisions under a withdrawal agreement.

It is possible, not least because of the amendment included in the emergency legislation by Stephen Kinnock MP, that the House of Commons might yet decide to approve the existing draft withdrawal agreement, including its transition period. Approval would be by way of a House of Commons resolution, potentially allowing "exit day" to remain as 31 October but with an agreed transition period taking effect rather than the "crash out" effect of a "no deal" Brexit. However, that House of Commons resolution would not override or displace section 31(5). Consequently, unless followed and confirmed by an Act of Parliament, any such resolution would be open to credible challenge.

This point of detail is extremely significant in relation to the possible timing of a general election. Approval of any withdrawal agreement that included a customs union (even a temporary customs union during a transition period) with the EU would require Parliamentary time after 19 October to secure the necessary legislation. With a maximum of eight potential sitting days between 19 October and the 31 October "exit day", time would be tight. If an election were to be scheduled on the strength of a resolution approving a withdrawal agreement, and without insisting on primary legislation to address section 31(5), then Parliament would be dissolved and any opportunity to secure the validity of the withdrawal agreement before 31 October would be lost.