A Brexit Legal Challenge a Day…

The British Government is already in the middle of a legal battle to stop MPs getting the final say over triggering the Article 50 process. This coming week sees that particular legal challenge be heard on appeal before the UK Supreme Court.

But did you know that the British Government is now facing a legal battle over whether the UK stays inside the single market after it has left the EU?

Typical. You wait for a Brexit legal challenge, and multitudes appear all at once.

Lawyers have said any potential risk of uncertainty over the UK’s European Economic Area (EEA) membership means Ministers might be stopped from withdrawing the UK out of the Single Market. They will submit the UK will not automatically leave the EEA when it leaves the EU, and Parliament should decide on this very issue.

Quelle surprise, the British Government disagrees, and says it believes the UK’s EEA membership will end when the UK leaves the EU.

But why is the Single Market suddenly so important, I hear you ask. Well, in a nutshell: the Single Market enables the tariff-free movement of goods, services, money and people within the EU.The EEA,established in the 1990s, extends those benefits to some non-EU members including Norway, Iceland and Liechtenstein. Non-EU members are outside the Common Agricultural Policy and customs union, but do however receive barrier-free trade with the Single Market in return for paying into some EU budgets, and accepting the free movement of workers.

The pro-Single Market think-tank British Influence is writing to the Secretary of State for Exiting the EU, David Davis, to inform him that it is planning to seek a formal judicial review of the Government’s position.The organisations has warned that if the Government does not receive a clear legal opinion on the issue, it ultimately could potentially end up acting outside the law.

To be fair, it is rather a complex issue, especially because there is no precedent to look to as an indicator of what might occur. But it does serve to highlight once again the lack of consideration and thought of David Cameron’s Government in deciding to hold a referendum on EU membership.

You see, all EU member states are in the EEA, and it had been assumed that when the UK leaves the EU, it would automatically leave the EEA as well. Let this be a lesson in avoiding assumptions, and of the need to thoroughly research before reaching a decision.

For some lawyers argue that leaving the EEA would not be automatic, and indeed would happen only if the UK formally withdraws by triggering Art 127 of the EEA agreement. (I know, another article of another agreement. But get used to it; you will hear a lot about Art 127 going forward I do believe).

The legal question is essentially focused on whether the UK is a member of the EEA in its own right, or because it is a member of the EU.

Should the courts support the legal challenge, thereby granting the UK Parliament the final determination on EEA membership, then MPs would have the pportunity to vote to ensure the UK remains in the Single Market until a long-term trading relationship with the EU has been agreed. And if MPs are found to have the authority to decide on Article 127, they could potentially overcome the Government’s small majority, and keep the UK within the Single Market post- Brexit.

Of course, this would infuriate Brexiteers, but pro-EU campaigners say MPs would feel able to do this because the electorate voted in the referendum to leave the EU and not the single market. Recall the precise wording of the referendum this summer: it was put to the electorate to submit their opinion on the UK’s membership of the European Union, not the Single Market (or indeed, whether there should be a ‘hard’ or ‘soft’ Brexit, but that is another battle for another time.)

Paradoxically though, the legal uncertainty over EEA membership could just end up being good news for the Government.

If its negotiations with the EU went badly and it was unlikely a satisfactory deal could be reached, the UK could threaten to stay within the EEA after Brexit. This would be politically hard for the Government to sell as it would still involve EU workers moving freely within the UK. But it might be economically better than having to rely on World Trade Organisation rules, which could involve high tariffs and barriers to trade.It would lso meanthe UK might be ble to force the EU into accepting a transitional period. This would be a useful tactic for UK negotiators to deploy, as there does not appear to be any mechanism for the EEA to force out one of its members.

At the the very least, this latest threatened legal challengemay result in a lengthy legal process – potentially involving the European Court of Justice – that could delay Brexit negotiations. Moreover, if the courts find that Art 127 does need to be invoked, there is the question of whether an Act of Parliament would be needed for it to be authorised.

Downing Street said the UK was only party to the EEA agreement through its EU membership, and the Government’s position was clear that “once we leave the EU we will automatically leave the EEA”.

In other words: Brext means Brexit. So that’s alright then.

It all appears to be quite the legal, political and economic tangled mess, doesn’t it? Almost as if the British Government has (to excuse The Smiths’ reference) started something, and now it’s not too sure…



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