Brexit: What would trading under “WTO terms” mean for the Welsh economy?

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Last week the Prime Minister wrote to the President of the European Council, Donald Tusk, to notify him of the United Kingdom’s intention to leave the European Union. This act triggered Article 50, the section of the Treaty on European Union that governs how a Member State would leave the EU.

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Article 50 has been triggered; what happens next?

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The UK Prime Minister, Theresa May, has sent notification to the European Council of the UK Government’s intention to trigger Article 50 of the Treaty on European Union. The notification signals the beginning of the two-year period within which a withdrawal agreement has to be negotiated between the UK and the European Union.

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Brexit: Views from Wales and Westminster

28 February 2017

Article by Nia Moss, National Assembly for Wales Research Service

Darllenwch yr erthygl yma yn Gymraeg | View this post in Welsh

This is a picture of an Assembly Committee room.

On 6 and 13 February 2017 the First Minister for Wales, Carwyn Jones AM, and the Minister of State for Exiting the EU, Rt Hon David Jones MP gave evidence to the Assembly’s External Affairs Committee (@SeneddEAAL) on their governments’ respective white papers and their priorities for the negotiations on the UK’s withdrawal from the EU.

What was the view from Wales?

The First Minister for Wales told the Committee that his priority for the negotiations was ensuring that Welsh businesses are able to export to the European market in the same way as they do now. The First Minister outlined his view that this goal should be pursued even if it means a compromise on immigration but also highlighted the Welsh Government’s proposal to link the freedom of movement of people to employment.

In relation to the border between Ireland and Norther Ireland, the First Minister stated that he wouldn’t want to see a deal on the issue that would make it easier for companies to move goods through Northern Ireland than through Welsh ports.

In relation to future funding the First Minister stated that he expected Wales to be compensated for the loss of European funding. He outlined his view that this should be in the form of an increase in the block grant and that this funding should not be subject to the Barnett formula.

The First Minister said that the UK Government’s engagement with the Welsh Government had been good and he welcomed the quarterly meetings of the Joint Ministerial Council. However, the First Minister emphasised that he expects not only for the voice of the Welsh Government to be heard but also to play an active role in the negotiations with the EU. The First Minister set out his view that the Welsh Government had not yet received a coherent view from the UK Ministers on the UK Government’s negotiation position.

The First Minister argued that current structures for inter-governmental relations in the UK are not fit for purpose. He called for new structures for making policy decisions and resolving disputes between the four governments of the UK. He was clear in his view that following the UK’s withdrawal from the EU the default position on powers would be that all powers currently exercised by the EU in areas of devolved policy like agriculture would come back to Wales. He stated that this was not the current view in Whitehall where he said there is a belief that the UK Government will decide where powers currently held by the EU will go in the UK.

What was the view from Westminster?

The Minister of State for Exiting the EU, Rt Hon David Jones MP, told the External Affairs Committee that the UK Government had not yet decided when it would trigger Article 50. He stated that the UK Government had also not yet decided whether it would send a simple letter of notification or would send a more detailed letter outlining some of its negotiation objectives.

The Minister offered his reassurance to the Committee that the UK Government’s negotiation position would fully reflect the views of the devolved governments and legislatures. He stated that the UK Government would need to weigh conflicting concerns and priorities within the UK to come up with a solution in the best interests of the whole of the UK.

The Minister stated that he wanted ‘to be absolutely clear that we (the UK) will be leaving the single market’ but that he believed there would be every incentive for the EU to agree a comprehensive free trade agreement with the UK. He outlined that the UK Government is undertaking an analysis of over 50 sectors in the UK economy to consider the implications and opportunities for them post UK withdrawal.

The Minister stated that the Home Office is currently working on a policy in relation to free movement between Northern Ireland and the Republic of Ireland following the UK’s withdrawal from the EU.

On inter-governmental relations the Minister stated that the UK Government was not currently looking at the development of new constitutional structures to replace the JMC though they may consider this ‘in the fullness of time’. In relation to the repatriation of powers following the UK’s withdrawal from the EU the Minister stated that (PDF 432KB):

It will be necessary for the United Kingdom to make a decision as to where various competences lie. We have been absolutely clear in indicating that any devolved competences that are currently exercised at devolved level will not be, so to speak, clawed back. It will be necessary to decide where powers best lie. It may be that there will be scope for further devolution, but, it may well be there will be an advantage, and in fact an imperative to look at UK-wide structures to replace the competences that previously resided at Brussels level.

These two evidence sessions formed part of the External Affairs Committee’s work on the implications for Wales of the UK’s withdrawal from the EU. Find out more about the Committee’s work on its webpage or on twitter @SeneddEAAL. You can watch the evidence sessions in full on Senedd.tv 

Supreme Court ruling on Article 50 TEU; Assembly Plenary to consider

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Picture of the Supreme Court

Image from Flickr by Rev Stan. Licensed under Creative Commons.

The Supreme Court has today ruled that an Act of the UK Parliament is required to approve the giving of notification required under Article 50 of the Treaty on the European Union. In other words, the UK Government cannot simply use the Royal Prerogative to give this notification.

However, the Supreme Court held that there was no legal requirement for the National Assembly for Wales, the Scottish Parliament and the Northern Ireland Assembly also to consent to this legislation, under what is commonly known as the Sewel Convention or the Legislative Consent Convention.  The Court stressed that the Sewel Convention has an important role in facilitating harmonious relationships between the UK Parliament and the devolved legislatures, but ruled that it was not the role of the judiciary to police the scope of such constitutional conventions, or how they operate. The Court went on to hold that this conclusion is not affected by the fact that part of the Sewel Convention is now entrenched in statute for Scotland, in the Scotland Act 2016 (and will be for Wales, if the Wales Bill currently going through its final stages through Parliament is passed).

The Court was not giving the UK Government and Parliament licence to ignore the Sewel Convention. Simply, it is saying that the courts cannot decide disputes about whether it has been applied correctly. Any sanction for failure to observe it has to be political, rather than legal. Notification under Article 50 formally triggers the start of the process of the UK leaving the EU – negotiations on the terms of the exit can begin once notification has been given. The Prime Minister has signalled her intention of giving the notification by the end of March 2017, although this timetable will now be subject to the Parliamentary process.

The Welsh Government’s Counsel General will make a statement in Plenary today on the outcomes of the judgement. Members will be given the opportunity question the Counsel General on his statement.

Key issues likely to be discussed in Plenary include:

  • How the Welsh Government plans to ensure that the interests of Wales are protected in the Brexit process.
  • What type of role the Assembly will have in scrutinising the negotiations and if there is likely to be a role for the Assembly in approving the final deal on the UK’s exit from the EU.
  • Whether the current inter-governmental structures in place in the UK are sufficient to enable the full engagement of the devolved administrations.
  • If a common negotiation position is likely to be reached between the devolved administrations and the UK Government prior to Article 50 being triggered.

Article by Elisabeth Jones, National Assembly for Wales – Chief Legal Adviser.