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Thursday, December 13th, 2018

Legal update: Brexit

The following update has been received from Sandy Adirondack, voluntary sector legal expert: www.sandy-a.co.uk.

To join the legal updates email list, contact legalupdate@sandy-a.co.uk.

Brexit

Unless the June 2016 referendum result ends up being reversed either by a second referendum or by a newly elected parliament withdrawing article 50, Brexit is going to happen, so if you haven’t started planning for it yet, now is the time.

If there is no agreed deal, its impact will be sudden and significant, with the “cliff edge” starting at 11pm Friday 29 March 2019 (or later, if the exit day is delayed). The UK will leave the EU, and simultaneously crash out of the single market (suddenly no free movement of goods, services, capital or people) and the customs union (suddenly all goods from the EU having to go through customs). 

If the UK parliament can agree a deal (which at the time of writing looks increasingly unlikely) the UK will leave the EU on exit day. But until the end of the transition period/implementation phase on 31 December 2020 or an agreed later date, the UK will remain in the single market and customs union, with a managed transition. (But given the chaos we are in at the moment, I’m not optimistic about any government being able to manage anything about Brexit.)

From the exit day – either with or without a deal – the EU treaties, directives regulations and case law which form the basis for much UK law will cease to apply to the UK. However, the UK’s European Union (Withdrawal) Act 2018 provides that any EU legislation in effect in the UK immediately before exit day will continue to apply in the UK, unless the Withdrawal Act says it does not. EU-related areas of law that will remain in effect include, for example, some or most aspects of data protection, intellectual property, employment rights, equal treatment, health and safety, consumer protection and much, much more.

Although the UK legislation will remain in place, it will need to be amended to take out all references to EU treaties, directives, regulations, bodies or procedures, and to make other changes. The government expects to lay approximately 700 statutory instruments (regulations) setting out these changes, ready to be approved and come into force on Day 1. As of close of day yesterday (11 December), 242 SIs had been laid before parliament, with 53 approved by parliament. To see those that have been approved and those still in draft form, go to legislation.gov.uk, enter “EU exit” as the title, then “All secondary legislation” or “All draft statutory instruments” as the type. The Hansard Society’s Westminster lens blog is tracking the daily progress of the EU exit statutory regulations (details under General background, below).

After the exit day the UK will be able to amend or repeal former EU-related legislation as it wishes, and will no longer have to comply with changes or additions to EU legislation. However, in many cases the UK may choose to continue complying with EU rules, to ensure UK goods, services and procedures (such as data protection rules) comply with EU requirements.

This information below isn’t really an update; it’s signposting to general resources that I think might be particularly helpful in understanding what Brexit actually means, how to prepare for no deal, and how to prepare for the longer-term changes during and after either a cliff edge or a managed transition.

General background for businesses and organisations

General background for charities and other voluntary organisations

  • Weekly e-newsletters, briefings and other resources from the Brexit Civil Society Alliance: https://www.brexitcivilsocietyalliance.org/. A UK-wide network of charities, voluntary and campaigning organisations, providing information for the sector and politicians about how Brexit affects the sector. Its newsletters are essential reading, and include links to many other resources. Sign up if you haven’t already!
  • Brexit and the voluntary sector: Preparing for change. National Council for Voluntary Organisations, October 2018, 9pp, and other Brexit resources: viahttps://www.ncvo.org.uk/policy-and-research/europe. Looks at the economic impact, employing EU nationals, access to EU funding, and the potential opportunities through the freedom to change VAT and state aid rules, greater flexibility on public procurement rules, and creation of the UK shared prosperity fund to replace the European structural and investment funds programme in the UK.
  • Cost benefit analysis of Brexit for charities. Charity Finance Group, September 2018, 16pp: via https://www.cfg.org.uk/BrexitPR2018. Sets out six ways post-Brexit legal changes could help charities (such as creating new VAT zero rates) – and the negative effects on charities if these changes are not made.