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When the vote was announced back in June, I did what any sensible lawyer would do, and wrote a blog post about it, which is on this website. Amongst the panic that seemed to be generated by some in the remain camp, I described what was likely to happen to all of those EU regulations and directives out there governing the way we live and work. It looks like I reached a conclusion with a diversion through Leicester City and Henry II, but we got there in the end. The reality is that they will all need to be incorporated into UK law. There really is a lot of them. The Association of British Insurers, for example, has published a 13 page document containing regulations and directives that apply specifically to the insurance industry, which is only a very small part of what is applicable to the UK, see here.

Well, it looks like that’s exactly what is going to happen with this Great Repeal Bill. Which, of course, isn’t a repeal Bill at all but the precise opposite. The Great Repeal Bill is going to specifically provide that all of EU law currently in force in the UK remains in force, at least in the immediate future. 

As David Davis has already said here, “the Great Repeal Act will convert existing EU law into domestic law, wherever practical”. From a legal and commercial perspective, this is a good thing, regardless of whether you were a leave or remain voter. Continuity and stability is important for everyone.

The big question, of course, is whether the UK government can invoke Article 50 without approval from Parliament. Most commentators have remained neutral on the point, awaiting the court’s decision. Bear in mind that even when the court makes a decision, it will probably get appealed. I can’t help but have a very clear view on this, which I must stress is very much a legal perspective rather than a political one. It is my view that Parliament does have to vote in order to invoke Article 50.

Let’s be realistic. I also think that if Parliament were given a vote, MPs would vote to invoke Article 50. These are people whose entire professional life is devoted to, and as a result of, democracy, and more specifically a democracy with a first past the post system. They are very unlikely to vote against carrying out the result of a referendum, even if the result is not legally binding. It would, however, give us the opportunity for proper scrutiny of the process, perhaps with the government being tasked with meeting certain benchmarks when negotiating with the EU, or perhaps with certain protections for affected groups or causes during and after the process.

But when it comes to the legal side, I can see the strength of the argument that the government has prerogative powers to deal with international treaties. However, that can never override parliament. Certainly websites like BBC news would have you believe that it’s all because of Magna Carta, but the position is much more subtle than that. I’m going to quote some case law here, so bear with me.

Going as far back as 1610, in the Case of Proclamations (which you can read here), Sir Edward Coke (a Norfolk boy, it should be mentioned), said the following about the prerogative:

the King by his proclamation of other ways cannot change any part of the common law, or statute law, or the customs of the realm

In other words, the royal prerogative cannot be used to change statute law, which includes the European Communities Act 1972. The same point has been made somewhat more recently here in 1995 by Lord Browne-Wilkinson:

In my judgment it would be most undesirable that, in such circumstances, the court should intervene in the legislative process by requiring an Act of Parliament to be brought into effect. That would be for the courts to tread dangerously close to the area over which Parliament enjoys exclusive jurisdiction, namely the making of legislation

The reality is that Article 50 sets in motion an irreversible process, or at least a process that the UK cannot reverse on its own, whether by prerogative or parliament. If no deal can be negotiated in the two year period, the UK would be out of the EU. As a matter of law, it may be arguable that EU law was still enforceable in the UK despite the UK being out of the EU, but the whole ambit of the treaties cannot apply. At least some part of the European Communities Act 1972 would be at risk of being subverted by invoking Article 50. And therefore there is no prerogative power to invoke it.

I actually think this is as clear as day. But the courts do strange things. I was convinced that the Supreme Court would use Magna Carta to save the former islanders of Chagos, but the decision went the other way. That is why we can only ever give our clients prospects of success up to around 80%; litigation is a risky business. We will have to see what the court says.

So what impact is Brexit having on the construction industry from a more commercial perspective?

I was grateful to Jon Woolston at Larking Gowen for sending me a copy of the Manufacturing and Engineering MHS survey last week. It seems that 45% of those within that sector have a negative outlook at the moment (compared to 19% who had a positive outlook), with 35% indicating that their main barrier to growth over the next 12 months is due to the uncertainty following the UK’s vote to leave the EU. This is more related to the manufacturing/engineering side rather than construction, but it at least gives some indication as to the views of business out there.

The House of Commons has reviewed what is likely to happen in the housing market and the construction industry, and their findings (dated 11 October 2016) are here. Fortunately, the findings suggest that the immediate impact has not been anywhere near as gloomy as first predicted, and house prices appear to be stable. However, the share prices of the three major developers, Berkeley, Bellway and Persimmon, fell by between 21% and 28%, and are yet to recover.

On the positive side, the report does suggest that the construction industry experienced a modest recovery in September 2016 (though not yet above pre-referendum levels).  As was reported in most of the papers, the Markit/CIPS construction Purchasing Managers’ Index hit 52.3 in September 2016 (anything over 50 indicates growth), as compared to 49.2 in August and 45.9 in July.

The House of Commons report also provides a reminder of the £5.5billion that the European Investment Bank has invested in UK social housing over its lifetime. The UK has a 16.1% share (apparently a share with a value of €26,649,532,500, which is obviously a lot of money) in the EIB. It will be interesting to see what happens to the EIB; Article 308 of the Treaty on the Functioning of the European Union just says that the members of the EIB shall be the member states; it isn’t entirely clear what happens when a member leaves. What is clear, of course, is that there is going to be a massive amount of investment that will need to be undertaken by the UK in substitution if the EIB is no longer available at the end of the Article 50 process.  

Please note: The content of this blog is for general information only and does not constitute legal advice. Specific legal advice should be taken in any particular circumstance.