Great Repeal Bill sets out plan to convert EU Directives into UK law

30 Mar 2017

In the next steps tpwards the UK's exit from the EU, the government has issued a white paper on the Great Repeal Bill, setting out how it plans to deal with existing EU rules in a post-Brexit world including EU Directives and rulings from the CJEU, although this will be subject to the final exit agreement

The government describes the white paper as ‘proposals for ensuring a functioning statute book once the UK has left the European Union’ and the Great Repeal Bill will be introduced in the next parliamentary session after the Easter recess but will not be passed until EU exit day. Much of the detail will be amended subsequently through secondary legislation via statutory instruments (SIs), which can be passed without significant parliamentary debate.

It provides detail about:

the repeal of the European Communities Act 1972;
how EU law will be converted into UK law; and
how corrections will be made to the statute book, to ensure the law continues to function once we have left the EU.

The raft of EU directives transposed into UK law will not be withdrawn as a result of the appeal of the European Communities Act 1972 as the Bill will ‘convert directly-applicable EU laws into UK law’. ‘The Bill will also preserve the laws we have made in the UK to implement our EU obligations’, the white paper states.

EU Directives

For example, this could leave rules affecting audit governance, such as the Audit Regulation & Directive in place, as well as the Accounting Directive, which formed some of the threshold parameters for new UK GAAP rules for small and micro businesses, and of course, the VAT Directive, to name just three with serious implications for the accounting profession.

Court of Justice of the European Union (CJEU

There are also the first indications about how the UK will treat case law set in the Court of Justice of the European Union (CJEU), which is often the court of final resort for long-running tax disputes.

For example, CJEU case law governs the calculation of holiday pay entitlements for UK workers: failure to carry across that case law would be to create uncertainty for workers and employers.

Similarly, CJEU case law has over the past four decades clarified what is and is not subject to VAT, and failing to follow that case law would create new uncertainties about the application of VAT.

The guidance for businesses, issued by the Department for Exiting the European Union states: ‘The historic case law of the Court of Justice of the European Union (CJEU) will be given the same status in our courts as decisions of our own Supreme Court.

‘It is very rare for the Supreme Court to depart from one of its own decisions and we would expect the Supreme Court to take a sparing approach to departing from CJEU case law.

‘The CJEU will no longer have a role in interpreting our new laws. We will of course continue to honour our international commitments and follow international law.’

The Bill will not make major changes to policy or establish new legal frameworks in the UK, beyond those which are necessary to ensure the law functions properly.

Once we have left the EU, and EU law has been converted into UK law by the Bill, the UK Parliament (and, where appropriate, the devolved legislatures of Scotland, Wales and Northern Ireland) can make changes to laws to reflect domestic or international policy.

Role of standards

Where standards are voluntary agreements, developed for purely commercial reasons, they will not be altered by the Great Repeal Bill and will continue to be available for use by businesses.

Standards can be followed by business to give a presumption of conformity with the essential requirements of some EU legislation. The Great Repeal Bill will convert this legislation into UK law.