The European Union (Withdrawal) Bill placed before Parliament on 13 July 2017 is the first concrete legislation determining what will happen to the plethora of EU law informing UK law when Brexit happens. Also referred to as the “Great Repeals Bill”, the Bill puts the detail behind the White Paper placed before Parliament in March this year on Legislating for the United Kingdom’s withdrawal from the European Union.
Whilst there will be much negotiation and political debate on the Bill before it passes, the Bill enshrines two fundamental principles that are unlikely to significantly change:
(1) The European Communities Act 1972, the fundamental piece of legislation which brought the United Kingdom into Europe, will be repealed on exit day (Exit day is not expressly defined in the Bill but for the purposes of this paper it refers to the actual day of Brexit). As of exit day EU law will no longer have supremacy in UK law and any new EU laws that come into play after this date will no longer have affect.
(2) As of exit day there will be a widely drawn category of “retained laws” i.e. laws that will continue to have effect in the UK after Brexit. These retained laws include existing UK legislation tied to EU law, direct EU legislation, all recognised and enforceable rights, powers, liabilities, obligations etc under section 2(1) of the European Communities Act and a body of domestic case law and EU case law.
Perhaps one of the most controversial proposals in the Bill is that set out in section 7 of the Bill which enables ministers to make regulations where they think it necessary to prevent, remedy or mitigate a situation where, as a result of Brexit, any retained EU law cannot operate efficiently or there is another deficiency. Ministers have this right for two years after exit day. The right to create such secondary legislation is explained in the Bill’s explanatory notes as including “altering acts of parliament where appropriate and sub-delegating the power to a public authority where they are best placed to deal with the deficiencies”.
Frustratingly for telecom operators the Bill does little to provide stability for a sector founded on regulation. From the moment Brexit was confirmed we already knew that most if not all legislation derived from EU law would have to remain in place for the immediate term as the alternative would have been created a chaotic situation that was unthinkable. We also suspected that the Bill would include a process for changes to be made to such laws, something also mentioned by Sharon White, the Chief Executive of the Office of Communications (Ofcom) in December 2016 when she stated the UK would not only need to look at retaining what worked in the communications framework post Brexit, but it should also look to improve it where it may be deficient. What we now also know for certain is that the point of Brexit will not be a definitive legislative point and that legislative change will happpen for at least two more years after that.
A key matter not addressed by the Bill is what happens where UK law alone is not sufficient for the retained law principle to work. Specifically those situations where the UK would need the agreement of the remaining European member states for such retained laws to be effective. Roaming and the removal of roaming charges is a classic example of where this matters:
Earlier this year – with effect from 15 June 2017 – mobile phone subscribers in the UK were given the right to “roam like at home” within the European Union without incurring additional roaming charges. This was done through the direct applicability into UK law of EU Roaming Regulations. Practically this meant that subscribers can use their home country phone, text and data allowances in any other of the 28 European member state at the same cost as if they were using it in their home country (with pay as you go customers paying the same costs as they would have done regardless of which European country they were in). Telecom operators may apply safeguards on data use through fair policy roaming rules with wholesale caps that reduce over the next 5 years, ending in 2022. The end of roaming costs was hugely significant for the telecoms sector, not only because have they been a decade in implementation but also because the end of such charges was touted as one of the big wins of the European Union’s “Digital Single Market” strategy (a strategy specifically introduced to embrace the internet and digital transformation in a joined up way, harnessing the power of the EU single market).
The problem with Brexit is that even if the European Union Withdrawal Bill provides that the Roaming Regulation be enacted locally into UK law, it has no jurisdiction over the remaining member states of Europe. The Bill cannot legislate for other member states to treat the UK as part of Europe for the purposes of giving effect to roaming laws. In fact when Brexit happens other member state countries will be able to treat UK subscribers as they treat all other subscribers outside of the European Union and – at least in theory – charge them whatever they wish to roam on an uncapped basis. The fallback position telecoms framework set out through GATS (the World Trade Organisation’s General Agreement on Trade and Services) does not solve the issue either. So unless the UK agrees specific bilateral deals with all of the other member states, or the European Union as a whole – a UK only roaming law would have little relevance.
How roaming, and many questions like it, will get resolved will depend on the outcome of the detailed Brexit negotiations currently ongoing and specifically what role the UK will choose to have in the EU and the EEA. For regulated sectors that build business models and launch campaigns based on the stability of the regulatory framework governing them, these questions need resolution early in the negotiation. In the words of Raghuram Rajan, a famous Indian economist, “Uncertainty of any sort results in volatility, and Brexit will be no exception”.