Brexit Bill Tracker (UK)

The current state of Brexit Bills (Dec 5th 2018) is in the Institute for Government diagram depicted.

– Fisheries bill entered Committee stage yesterday

– Trade bill still missing in action in the Lords

– First bill *only* needed for no deal exit

– No sign of the Immigration bill (or white paper)

IF the UK Government loses the 11th December vote, the No Deal exit emergency legislation and instructions are published. I will post a new post then.

14 Nov 2018 Withdrawal Agreement (EU-UK Brexit)

I posted yesterday (Brexit Status) that Withdrawal Agreement text had been agreed between EU and UK negotiators. This text was agreed last night at a meeting of the UK Cabinet, and then published – here. Alongside the 14 Nov 2018 Withdrawal Agreement text, a starter for the Outline Political Declaration on the Future Relationship was also published, and a Joint Statement (in that link).

Alongside this, DExEU also published and Explainer and Explanatory Notes – here.

The EU also published a Fact Sheet on the Withdrawal Agreement (WA) text – here, and a Fact Sheet on the Protocol on Ireland and Northern Ireland (one of the 3 Protocols to the WA) – here.

The 14 Nov 2018 Withdrawal Agreement has 185 Articles, 3 Protocols, and a series of Annexes.

The objective of the Withdrawal Agreement (WA) is to put in place an orderly exit of the UK from the EU on 12 midnight CET (11pm GMT) 29 March 2019 – dealing with matters such as citizen rights, money, and a series of separation technicalities. The WA (if ratified as a Treaty) also puts in place a Transition Period (in the UK, this is termed an Implementation Phase) lasting until 31 December 2020, during which EU Law will continue to apply and trade will be unchanged.

Note :

(1) the WA text must pass through a series of gates before ratification as a Treaty. When a Treaty, it will be given effect by the EU (Withdrawal and Implementation) Bill in the UK, which itself must be created and enacted. And this new Bill will necessarily amend and rewrite parts of the already enacted EU (Withdrawal) Act 2018. It is hoped, but by no means certain, these gates can be crossed by the exit date of 29 March 2019.

(2) during the transition to 31 Dec 2020, EU Law would continue to apply to and within the UK and override domestic law. But, as the UK will be a third country, this means it will have only minimal influence on the creation and enactment of EU law in that phase.

(3) a single extension for an (at present unspecified) length of time is permitted to the Transition Phase, this extension to be agreed by 1 July 2020. A firm end date will need to be negotiated by the European Council on 25th Nov (if it takes place).

(4) a specific Protocol for handling the border between Ireland and Northern Ireland is the first of 3 Protocols in the 14 Nov 2018 WA text. This Protocol includes a detailed “backstop” to be used if the Future Relationship is not in place by the end of the transition period.

(5) the UK is a Third Country on exit on 29 March 2019, the transition period gives a further short period for transition to this Third Country status (relationship with the EU).

(6) the objective is to transition from the current EU member state status direct to the Future Relationship (Trade Agreement) status, via the Transition Period (which could be extended).

Further work is ongoing, and the WA text must pass a series of gates.

It is essential that Brexit Preparedness planning continues, and that the current Brexit Preparedness and Brexit Contingency EU and the UK Notices are read and understood. I have posted these. Please keep following this Blog for updates.

Current Brexit State 14 Nov 2018 (UK and EU)

EU and UK officials have agreed the text for the Withdrawal Agreement (a treaty) and Outline Political Declaration (on the future relationship between the UK and the EU bloc). This text was communicated to the UK at 9pm 12 Nov 2018, and the UK Cabinet will meet today at 2pm 14 Nov 2018. A vote of the UK Parliament, and of the European Parliament, is required, and each Member State must ratify.

Reminder : the UK is a Third Country from midnight CET 29 March 2019.

The EU has issued Brexit Preparedness Notices, and other Communications – here. I have posted about these.

Yesterday 13 Nov 2018, the EU issued a new Communication – here, and a new Travel Notice here. I posted this yesterday.

The UK has issued Technical Notices – here. I have posted about these.

France has agreed its Preparedness Law – the draft law is here. Further information is here. I have posted about this Law.

Some dates already apply now :

(1) pet vaccination

(2) online applications (UK) for ECMT International Road Haulage Permits (from 26 Nov 2018)

In the event, the Withdrawal Agreement and Outline Political Declaration text does not progress, further No Deal Instructions can be expected from 1st December 2018. HMRC and DfT already issued further No Deal instructions (I posted about these), and more can be expected.

In the event, the Withdrawal Agreement and Outline Political Declaration text does progress, and the Treaty is ratified, this will give a Transition/Implementation phase until Dec 2020, but the UK is still a Third Country from March 2019 (as above), albeit running under the arrangements put in place by the Withdrawal Treaty (in the UK this would be a Withdrawal and Implementation Act).

Business, charities and households must continue their preparations.

Please continue to follow and pay close attention to this Blog.

Chemicals Regulation (UK Brexit Preparedness)

Very little direct Brexit instruction is published by the UK on Chemicals Regulation, beyond the UK Technical Notices (I already posted about on this Blog). The EU also has its own Brexit Preparedness Notices (I already posted about on this Blog).

Today (7th November) the House of Lords EU European Union Committee published its report of evidence taken on the matter. This report is here,

There is agreement between the Government, industry and NGOs that the UK’s continued participation in REACH, the main system of EU chemical regulation, and continued membership of the European Chemicals Agency would be the best Brexit outcome.

But UK Brexit Preparedness is not advanced.

The Report identifies the following as requiring urgent attention (by Government) :

(1) clarifying its intended approach to chemical regulation in the future;

(2) creating and populating a database of chemicals;

(3) preparing a UK body to take on the role of chemical regulation in a way that is independent, transparent and scientifically robust;

(4) enabling businesses, including small businesses, to take pre-emptive action to maintain valid registrations for the EU market; and

(5) mitigating the economic impact on the chemical industry that would result from leaving the EU system.

NOTE THIS (referring to the evidence taken)

If associate membership of and ongoing participation in ECHA are not negotiated by exit day, a number of challenges arise. The first is the fact that, barring any preventative action, all chemical registrations will become invalid in the UK, and all registrations made solely by UK companies will become invalid in the EU. This would prevent the trade and use of those chemicals.

Peter Smith, Executive Director for Product Stewardship at Cefic, explained that there were 21,000 chemicals registered through REACH, 5,000 of which were registered by UK companies.

However, Ms Bulleid made the point that where one of those 5,000 substances is registered jointly by both a UK-based company and an EU-27-based company, “some people will be able to put it on the [EU] market, but the UK registrants will not”.

Ms Lloyd agreed, stating that chemicals registered by UK companies will not be invalid in the EU “unless the only registrants of that substance are UK companies”.

As a result, UK companies will lose access to the EU market, but the number of chemicals that would be prohibited is unclear.

THE REPORT CONTINUES WITH THE EVIDENCE GIVEN BY MINISTERS ON THEIR STEPS ON THE MATTER OF ILLEGAL REGISTRATIONS – these include :

(1) a new statutory instrument (Brexit Regulation) to continue the validity of UK registrations by UK registered companies for the UK market

(2) a DEFRA Secretary of State observation (based on the EU Brexit Preparedness Notices) that UK companies can mitigate by transferring their registration to an EU based affiliate or representative, but this is acknowledged as not possible in advance of exit day so there would be

a void of weeks or months before such companies are able to export substances to the EU.

Ms Edwards acknowledged this difficulty, stating that “there has been some discussion suggesting that you would need some sort of mechanism in place to enable those registrations to be transferred in advance”, but indicating that no such provision had yet been put in place

ON THE MATTER OF THE UK DATABASE

Ms Peake informed us: “Defra has asked for £5.8 million to set up an IT infrastructure to register chemicals in the UK in the case of having to set up an independent UK chemicals regulation system.”

Ms Edwards stated: “We are trying to build a system that will replicate, as far as it can, what the ECHA system does. Some of the fuller functionality that is not necessarily required on day one will come on board on a slightly slower timescale, but the critical thing for day one is to have that registration function in place.”

PLEASE CONTINUE TO FOLLOW THIS BLOG

New Measures for Single-Use Plastics (UK)

The Budget 2018 announced a new tax on produced or imported plastic packaging from 1 April 2022. Subject to consultation, this will apply to all plastic packaging that doesn’t include at least 30% recycled content.

In addition, there are planned reforms to the Packaging Producer Responsibility System, that will also be consulted on shortly.

THIS POST WILL BE UPDATED WITH THE CONSULTATION LINKS, please book mark the post to return to it online, as a new email will not be sent out.

New Carbon Emissions Tax (UK)

The recent Budget 2018 announced a new Carbon Emissions Tax would be introduced from 1April 2019 in the event the UK leaves the EU at the end of March 2019 without a deal.

If the UK secures a transition/implementation period, it would remain a member of the EU Emissions Trading System (EU ETS) during this period. The UK government is continuing to develop options for long term carbon pricing, including remaining in the EU ETS; establishing a UK ETS (linked to the EU ETS or standalone) or a carbon tax.

Already published Brexit Preparedness Notices confirm the UK would be excluded from participating in the EU ETS in a ‘no deal’ scenario. This means that current participants in the EU ETS who are UK operators of installations would no longer take part in the system.

The new Carbon Emissions Tax would apply to emissions of carbon dioxide (and other greenhouse gases on a carbon equivalent basis) from UK stationary installations currently in the EU ETS. The aviation sector would not be subject to the Carbon Emissions Tax.

Details of this New Carbon Emissions Tax are here.

Initial information is here.

Note in particular :

(1) The EU ETS requires participants to obtain permits to emit and then to submit a report annually with details of their activities across the previous calendar year, from which their emissions across the period are calculated. The UK would continue to operate a permitting and reporting regime after leaving the EU ETS. Permits issued for EU ETS compliance before 29 March 2019 would remain valid for compliance with the Carbon Emissions Tax although minor amendments to permits may be necessary.

(2) Any stationary EU ETS installation currently covered by the permitting system and the emissions reporting scheme (including those in a simplified reporting scheme for small emitters and certain hospitals) would remain subject to the reporting requirements and potentially become liable to pay the tax, as would any installation that became permitted after the start of the tax.

(3) There would be no requirement for installations to register for tax or send in a tax return – all information needed to calculate tax liability and to bill the installation would be taken by HMRC from the existing IT system known as ETSWAP. The tax year would cover the same calendar year period as under the existing monitoring, reporting and verification system, with installations continuing to use ETSWAP to submit independently verified data to environmental regulators on their activities covering the period 1 January to 31 December. They would continue to do this by 31 March each year. As a result, by 30 April each year, independently verified data would continue to be available on each installation’s greenhouse gas emissions covering the previous calendar year. HMRC would use these data to generate a tax bill, which would be sent to installations in May, with payment required within a specified period agreed following consultation. Transitional arrangements would apply in the first tax year as it would cover only 9 months as a result of the tax starting part way through the year.

(4) For permit holders outside the simplified reporting scheme the tax would be based on the amount by which reported emissions exceeded an emissions allowance set for tax purposes for each installation in advance of the tax year. For 2019 and 2020, the allowance would be set at the level of free allocation of EUAs under Phase 3 of EU ETS, with an installation paying tax only if its emissions exceeded its allowance, albeit that 2019 allowances would be set at 75% of the full year level.

For power generators who receive no free allocation of EUAs under EU ETS, the allowance would be set at zero.

Installations that became permitted after the UK left the EU ETS would have no EUAs on which to base their emissions allowance – their allowance would be set in a comparable way to existing EU ETS participants.

(5) Premises covered by the simplified reporting scheme would continue to operate as they do at present except that the tax (rather than the current civil penalty) would be payable on emissions above the allowance. The allowances would be set at equivalent levels to the targets that would have been set for them under the current simplified reporting scheme.

(6) HMRC would tax emissions in excess of the emissions allowance on a carbon equivalent basis per tonne. For 1 April to 31 December 2019 the rate would be £16 per tonne. The rate for years beyond 2019 would be set at future Budgets.

(7) As the tax would be introduced from April 2019, the arrangements for the first year would differ from the arrangements set out above. The first tax period would run for only 9 months and cover the period from 1 April to 31 December 2019. As indicated above, installations’ emissions allowances for 2019 would be set at 75% of the level that would have applied had the first tax period covered 12 months. Although they would still need to monitor their emissions for the full 12 months, installations would need to submit 9 months’ activity data by 31 March 2020 covering this first tax period. Payment details for the first tax year would be confirmed after the consultation planned for 2019 but it is possible that tax bills for 2019 would be sent out later than May 2020.

(8) Legislation will be introduced in Finance Bill 2018-19 to create a new Carbon Emissions Tax, setting the scope, rate and basic structure of the tax and establishing that it would be payable only on emissions above an emissions allowance set for each installation. The Finance Bill will provide for a statutory instrument or instruments which would be laid in early 2020 following a consultation in 2019. The instrument or instruments would be wide-ranging.

(9) The government currently sets a total carbon price, created by the price of allowances from the EU ETS and the Carbon Price Support (CPS) rate per tonne of carbon dioxide (t/CO2) which tops up the EU ETS price for electricity generators. The total carbon price is designed to provide an incentive to invest in low-carbon power generation. In a ‘no deal’ exit from the EU the CPS would remain in place.

FURTHER DETAIL IS IN THE LINKED NOTE (see earlier)

New Fisheries Bill (UK)

The UK Government lodged its Brexit Fisheries Bill at First Reading on 25th October 2018. The Bill and its Explanatory Notes are here.

The Fisheries Bill (the Bill) will provide the legal framework for the United Kingdom to operate as an independent coastal state under the United Nations Convention on the Law of the Sea 1982 (UNCLOS) after the UK has left the European Union (EU) and the Common Fisheries Policy (the CFP). The Bill creates common approaches to fisheries management between the UK government and the Devolved Administrations, known collectively as the Fisheries Administrations, and makes reforms to fisheries management in England.

A couple of aspects to note :

(1) The Bill replaces the sustainability objectives currently in Art. 2 of the Basic Regulation of the Common Fisheries Policy (Regulation (EU) 1380/2013), making them objectives for the Fisheries Administrations or the Secretary of State.

(2) The objectives include the objective of securing that all UK fishing boats have equal access to UK waters. This is new.

(3) The Fisheries Administrations are required to publish a statement setting out the policies which would achieve or contribute to the achievement of those objectives. In addition, the Secretary of State is required to publish a statement setting out the policies that apply to England that achieve or contribute to the achievement of a number of objectives that apply only to the Secretary of State.

(4) The Fisheries Administrations are required to pursue the policies contained in the statements unless relevant considerations indicate otherwise.

(5) As expected for a Brexit Bill, when the UK leaves the EU, any access for EU and other foreign vessels to UK waters will be a matter for negotiation. The Bill revokes the EU legislation which currently provides for automatic rights for vessels registered in the EU to access UK waters. By revoking provisions in the Fishery Limits Act 1976, it removes the need to designate which countries’ vessels are able to fish in UK waters and introduces a new requirement that foreign vessels fishing in UK waters must be authorised to be in UK waters under international agreements or arrangements or must have a licence issued by a Fisheries Administration.

(6) The Bill revokes, replaces and clarifies existing powers for the Fisheries Administrations to license fishing in UK waters. For the most part, this is a consolidation of existing powers but the Bill makes several significant changes. It provides for equal access for UK vessels in UK waters by clarifying that licences issued by any Fisheries Administration are effective throughout UK waters. It also requires for the first time that foreign vessels are prohibited from fishing in UK waters unless they have a licence issued by a Fisheries Administration.

(7) As expected for a Brexit Bill, the Bill revokes EU legislation which currently sets UK fishing opportunities (quotas) and gives the Secretary of State powers to determine the UK’s fishing opportunities. Before doing so he must consult the other Fisheries Administrations. He must also make certain notifications, including a notification to Parliament.

(8) The Bill also introduces powers to enable annual fishing opportunities (quotas), which the Secretary of State can allocate to the English industry, to be sold to those in the English industry (attached to named English ports). This is new.