UK might not survive Brexit – House of Lords report

Powers devolved to the constituent parts of the UK – Scotland, Wales and Northern Ireland – will be significantly boosted by a Brexit, to the point of posing an existential challenge to the UK, a House of Lords report suggests, as relevant powers are returned from Brussels but run into the particular constitutional arrangements that govern power sharing between the different lawmaking chambers in the UK.

As part of its ongoing review of the Brexit process, the House of Lords EU Committee has published another report – this time looking at the implications of devolution agreements currently in place between the UK Parliament in Westminster and other legislative bodies including the Scottish Parliament, the Welsh Assembly and Northern Ireland, where currently a political crisis means that there is no effective local governance ongoing.

Currently, there are specific agreements in place that determine what powers these local parliaments or assemblies have, but also to determine how much money should flow their way from HM Treasury, based in London, which is responsible for UK tax revenues. And it is these agreements that the House of Lords Committee suggests will give rise to powers returning not to Westminster, but to the devolved lawmaking chambers.

It has concluded that: “all powers currently exercised by the EU will ‘by default, be exercised in accordance with … pre-existing statutory provisions’. This would mean a large range of powers in areas such as fisheries, agriculture and environmental protection returning from Brussels to Edinburgh, Cardiff and Belfast not Westminster.”

Effectively, the Committee suggests that the UK would become more federalist in its way of politics. Even if the current agreements on the level of devolved powers were to remain unchanged in the run-up to Brexit – something the Committee strongly suggests should be the case, as it does not believe the UK government has the capacity to enter into such negotiations at the same time as ongoing Brexit negotiations in Brussels – it would result in “significant increase in the powers and responsibilities of the devolved institutions”.

The Committee concludes that Brexit “presents a ‘fundamental challenge’ to the future of the UK”.

In its concluding notes to the latest report, the Committee adds that “There has been no guiding strategy or framework of principles to ensure that devolution develops in a coherent or consistent manner and in ways which do not harm the Union. Thanks to Brexit, it is now more important than ever that reform of the devolution settlements should be underpinned by a clear and agreed framework of guiding principles.”

“We are concerned by the apparent deterioration of relations between the UK and Scottish governments. Statements by ministers, and in the government’s White Paper on Legislating for the United Kingdom’s withdrawal from the European Union, seem to imply that the UK government is considering a top-down approach to establishing the necessary frameworks and standards in law at UK level.”

“The Scottish government, in contrast, is seeking substantial additional powers post-Brexit, including powers that the Smith Commission, established after the 2014 independence referendum, concluded should continue to be reserved. It seeks these powers with a view to implementing its preferred approach to Brexit for Scotland, which would involve continuing membership of the EU Single Market. In the absence of any agreement on this approach, it holds out the possibility of a further independence referendum.

“We call on the UK government and the devolved governments to work together to put in place the frameworks needed to ensure consistency at UK level, thereby preserving the integrity of the UK single market, while respecting national, regional and local diversity, and the autonomy of the devolved institutions. “We note the suggestion of some witnesses that, in the long term, some form of impartial internal arbitration between the constituent parts of the United Kingdom may be required to sure the integrity of the UK single market.

“A successful settlement cannot be imposed by the UK government: it must be developed in partnership with the devolved governments. We welcome the secretary of State’s belated confirmation that the legislative consent of the devolved legislatures will be sought in respect of the Repeal Bill. The political and constitutional consequences, were legislative consent to be withheld, while unclear, are likely to be serious. We therefore call on the UK government and the devolved governments to engage positively in developing solutions that work for the whole of the UK and all its constituent nations and territories.

“The Brexit process, and the new powers and responsibilities to be exercised by the devolved institutions post-Brexit, will place extra demands on their time and resources. We call on the UK government and the devolved administrations to work together to ensure that the devolved institutions are properly resourced and equipped for this vital work. This should include more regular interchange between civil servants in the devolved administrations and Whitehall.”

Looking at the different parts of the UK, the Committee has also noted particular challenges.

Northern Ireland

“The Committee restates its previous conclusion that the unique circumstances of Northern Ireland will require unique, ‘flexible and imaginative solutions’.”

“The Committee notes that Brexit has already undermined political stability in Northern Ireland and exacerbated cross-community divisions. In light of the Conservative/DUP agreement, it calls on the government to maintain confidence in the nationalist community. The Committee welcomes the commitment of the UK government and the European institutions to protect the achievements of the peace process and to avoid the imposition of a hard border in the island of Ireland.”

Wales

“The Committee notes that the Welsh economy is heavily dependent on exports to the EU, operating a £2.25bn trade surplus with EU member states against a £2.3bn trade deficit against non-EU countries: Welsh manufacturing would therefore be hard hit by a failure to agree a comprehensive trade deal with the EU. The report also highlights that the loss of EU funding will put Welsh agriculture at risk, given the predominance of hill farming and sheep farming.

“The Committee notes the Welsh government’s wish to “work constructively” in achieving a successful outcome, and calls on the UK government to ‘reciprocate this good faith’, finding ways protect Wales’ interests in the Brexit negotiations.”

Scotland

“The report finds that the Scottish government’s proposal for Scotland to remain a member of the EU Single Market, while the rest of the UK leaves, would be politically impracticable, legally complex and economically disruptive.  At the same time, the Committee calls on the UK government to ‘respect the particular circumstances in Scotland’, including the high level of support in Scotland for remaining in the EU.”

“The Committee concludes that any Brexit deal should accommodate Scotland’s particular needs, including its reliance upon EU migration to meet both labour market and demographic needs. The Committee warns, however, that conferring legal personality upon Scotland, to enable it to negotiate its own agreements with the EU or third countries, would have ‘profound and unpredictable constitutional and political consequences’.”

The full report can be found here House of Lords EU Committee 4th Report

 

ABOUT THE AUTHOR
Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 16 years he has been based in London writing about funds and investments . From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope.

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