Brexit Clash Threatens U.K. Crisis as Scotland, Wales Revolt

  • Nicola Sturgeon, Carwyn Jones vow to veto May’s Repeal Bill
  • Liam Fox tells rebels they’ll make ‘hard Brexit’ more likely

U.K.'s Fox Says Must Ensure Stability in Brexit Process

Theresa May unveiled a landmark draft law to take Britain out of the European Union, sparking a furious backlash from Scotland and Wales and fueling political opposition that could derail her plans for Brexit.

The 66-page bill will transfer EU laws onto the British statute book for when the U.K. leaves the bloc in March 2019. But the leaders of the semi-autonomous Scottish and Welsh governments attacked May’s plan for failing to give them sufficient powers and threatened to block the bill in votes in the national legislatures in Edinburgh and Cardiff.

Carwyn Jones in Brussels, July 13.

Photographer: Dario Pignatelli/Bloomberg

Everything you wanted to know about the Repeal Act

It “is a naked power-grab, an attack on the founding principles of devolution and could destabilize our economies,” Scottish First Minister Nicola Sturgeon and her Welsh counterpart, Carwyn Jones, said in a statement on Thursday.
The bill takes powers back from the EU in Brussels and gives them to the central U.K. government in London, instead of devolving decision-making to Wales and Scotland, Jones and Sturgeon said. “On that basis, the Scottish and Welsh governments cannot recommend that legislative consent is given to the bill as it currently stands.”

One year after becoming prime minister, May is having to brace herself for political trench warfare on several fronts as she battles to keep her Brexit strategy on track.

Clean Break

Her critics in London are emboldened by her failure to win a majority in last month’s election and are plotting to water down her plans for a clean break with Europe, quitting the single market and the customs union. At the same time, the EU’s negotiators are taking a firm line with the U.K. as talks unfold.

For Britain, time is also short. May wants to open talks on a new free-trade deal between the U.K. and the EU so that the future trading relationship is settled by the deadline to conclude the negotiations on March 29, 2019. First, both sides must agree on Britain’s exit fee, the fate of millions of EU citizens living in the U.K., and the future for the Irish border.

The main opposition Labour Party is already plotting to unite with rebel Tories to rewrite the repeal bill. Even though she has the support of Northern Ireland’s Democratic Unionists, it would take only seven lawmakers from May’s party to rebel in order to potentially defeat the government in a vote in the House of Commons. The end result could mean a softer form of Brexit and May being pushed from power.

The bill would hand May’s government two years to alter British law through a fast-track process designed to ensure regulations work properly after Brexit. One of the most contentious provisions would hand ministers the ability -- sometimes known as “Henry VIII powers” after the Tudor monarch -- to change laws without consulting Parliament. Brexit Secretary David Davis said in a BBC interview that the changes “are hardly massive,” and that lawmakers would have the opportunity to have a say.

“These are technical changes to make the law work,” Davis said. “And it’s up to the House of Commons. If a statutory instrument is placed in front of the House of Commons, the House of Commons decides whether it debates it and votes on it.”

Six Tests

Keir Starmer

Photographer: Chris Ratcliffe/Bloomberg

Among its more contentious features is a plan to abandon the EU charter of fundamental rights, rather than incorporate it into domestic law. This puts the government on an immediate collision course with the main opposition parties.

Labour’s Brexit spokesman, Keir Starmer, has made the incorporation of the charter one of the “six tests” he will apply when the party votes. In another significant turn, the bill allows the Scottish Parliament, where Sturgeon’s anti-Brexit Scottish National Party is the largest force, a separate vote.

“Those who try to derail this bill are increasing the risk of what they would call ‘hard Brexit,”’ Trade Secretary Liam Fox said in a Bloomberg Television interview. “We are going to leave the European Union and if we are unable to put the laws in place that provide that stability, we will still leave, we simply will not have the legal framework that we want.”

U.K.’s Fox discusses the British government’s repeal bill

(Source: Bloomberg)

Constitutional Twist

In strictly legal terms, the government could push ahead with the bill without Scottish consent, according to Huw Pritchard of Cardiff University’s School of Law and Politics. “It doesn’t tie them down to actually following it,” he said in an interview. But overriding a Scottish vote against would “be a big constitutional issue.”

The bill was published on the first anniversary of May taking office and came hours after the government released position papers on three areas of Brexit. It said it wants to “ensure a smooth and orderly end to the jurisdiction” of the highest court in the EU and to maintain a “close and effective relationship” with the body which oversees how radioactive materials are handled.

The European Union (Withdrawal) Bill, to give the legislation its formal title, is intended to provide regulatory continuity for businesses from aviation to pharmaceuticals and to avoid a legislative black hole appearing overnight as Britain exits the EU.

Earlier, Davis appealed to other parties for support for the bill to make the Brexit process smoother.

“The eyes of the country are on us, and I will work with anyone to achieve this goal and shape a new future for our country,” he said in a statement.

Jeremy Corbyn’s Labour Party is unlikely to rally to his call. It questions whether the government should be given a free hand to tweak laws without parliamentary approval as well as wanting to maintain the fundamental-rights charter.

Chocolate Orange

The power of EU law over the country is a key area of dispute. In a position paper on the matter, the government said it will allow the continuation of pending cases in the European Court of Justice but will not allow new proceedings after the date it leaves -- even if the facts in the case happened before.

The court “should not be allowed to rule on U.K. cases which were not ​before the court on the day the U.K. leaves the EU,” the government said.

The difficulties ahead are not just limited to political maneuvers as the talks progress. Amyas Morse, the head of the National Audit Office, warned that the practicalities of government departments working together risk the U.K. approach fragmenting.

To make his point, he used the image of a popular type of candy that breaks into segments when tapped.

“It needs to act as far as possible in a unified way and we have an issue there because of departmental government,” Morse said, according to a report by the Press Association newswire. “What we don’t want to find is that at the first tap, this falls apart like a chocolate orange. It needs to be coming through as uniform, a little bit more like a cricket ball.”

— With assistance by Thomas Penny, Simon Kennedy, and Alex Morales

    Before it's here, it's on the Bloomberg Terminal.