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The Continuity Bill is Dead, Long Live the Continuity Bill – Regulatory Alignment and Divergence in Scotland Post-Brexit

Christopher McCorkindale (University of Strathclyde), Aileen McHarg (University of Durham) and Tom Mullen (University of Glasgow)

Readers of this blog will be aware of the dispute between the Scottish and UK Governments over who should legislate in areas hitherto covered by EU law after Brexit (or more accurately after the end of the post-withdrawal Implementation Period).  That dispute saw the Scottish Parliament enact its own Continuity Bill intended as an alternative to the European Union (Withdrawal) Act 2018 (EUWA).  That Bill – the UK Withdrawal from the European Union (Legal Continuity) (Scotland) Bill (the “first Continuity Bill”) (discussed here and here) – was subsequently referred to the Supreme Court and held to be outwith devolved competence so far as it conflicted with the EUWA (discussed here).  Although some provisions of the Bill survived the Supreme Court reference, the Scottish Government decided not to proceed with Bill, but undertook to bring back the remaining provisions on a future occasion.

On 18 June 2020, the Scottish Government introduced into the Scottish Parliament the UK Withdrawal from the European Union (Continuity) (Scotland) Bill (the “second Continuity Bill”).  This is a more tightly focused Bill than the first one, no longer attempting to make general provision for the continuity of effect of EU law in Scotland post-Brexit.  Rather, it seeks to address two specific issues.  First, in keeping with the Scottish Government’s goal of maintaining alignment with EU law as far as possible, it brings back the so-called “keeping pace” power contained in the first Continuity Bill.  Secondly, reflecting a particular concern about the effect of Brexit on the maintenance of environmental standards in Scotland, it makes provision for environmental governance.

In this post, we outline the provisions of the second Continuity Bill, and address some specific constitutional questions it raises.

The Keeping Pace Power

Section 1(1)(a) confers on the Scottish Ministers power to make regulations for the purposes of: (i) aligning the law in devolved areas with the provisions of EU regulations, decisions or other tertiary legislation; (ii) implementing an EU directive; or (iii) enforcing any such EU legislation. The power may be used only in so far as the relevant EU legislation has effect in EU law after the end of the transition period (i.e., when the UK ceases to be bound by EU law). Section 1(1)(b) confers an additional power to make regulations for the purpose of dealing with matters arising out of the operation of law created under the principal power. Section 1(6) states that regulations may make any provision that could be made by an Act of the Scottish Parliament.  In other words, it is a (substantial) “Henry VIII power”, similar to the power contained in s 2(2) of the European Communities Act 1972 (ECA) for (UK and devolved) ministers to implement EU law via secondary legislation.

Section 2 sets out some specific limitations on the exercise of the keeping pace power.  These are, generally speaking, broader than the limitations on the use of s 2(2) ECA, although unlike s 2(2), it can be used to create sub-delegated legislative powers.  Section 3 also includes a sunset provision: regulations may not be made more than 10 years after the power comes into force, although that period may be extended by up to 5 more years on two occasions (i.e., 20 years in total).  This is a major extension of the corresponding power contained in the first Continuity Bill, which (following amendment) permitted regulations to be made only for a period of 3 years from exit day with a possibility for extension to a maximum of 5 years in total.  Further constraints on the use of the power are the duty (which did not appear in the first Continuity Bill) under ss 5 and 6 to lay explanatory statements to accompany regulations laid before the Parliament, and a duty under s 7 to report annually on the use of the power.  However, the procedural constraints on the use of the keeping pace power are relatively weak.  Under the first Continuity Bill, regulations were to be made by the affirmative procedure, or in some cases by a super-affirmative procedure.  However, s 4 of the second Continuity Bill provides that regulations in some specified cases are to be made by affirmative procedure, but otherwise by the negative procedure.

Environmental Governance

The first Continuity Bill imposed a duty (in s 26A) on the Scottish Ministers to do two things.  First, they were required to prepare and consult on proposals on how regard would be had in environmental policy-making to guiding principles on the environment, derived from Article 191(2) of Title XX TFEU.  These are: (i) the precautionary principle as it relates to the environment; (ii) the principle that preventative action should be taken to avert environmental damage; (iii) the principle that environmental damage should as a priority be rectified at source; and (iv) the principle that the polluter should pay.  Secondly, the Scottish Ministers were required to prepare and consult on proposals to ensure that that there continues to be effective and appropriate governance relating to the environment after Brexit.

Following consultation, these proposals are now contained in Part 2 of the second Continuity Bill.  Chapter 1 deals with the guiding principles.  These are set out in s 9, subject to a power of amendment by the Scottish Ministers to ensure that the principles keep pace with any relevant developments in EU law.  Section 10 requires both the Scottish Ministers and Ministers of the Crown, when acting in respect of Scotland, to have regard to the guiding principles in developing policies, including proposals for legislation.  Section 11 obliges other responsible authorities to have regard to the principles when undertaking environmental assessment.  Section 12 states that the purpose of the duties imposed by sections 10 and 11 are protecting and improving the environment and contributing to sustainable development.  And s 13 requires the Scottish Ministers to publish guidance on the guiding principles and the duties in ss 10 and 11 as read with s 12, to which those subject to the ss 10 and 11 duties must have regard.

Chapter 2 creates a new body – Environmental Standards Scotland – with the functions of monitoring, investigating and enforcing compliance with environmental law by public authorities, and the effectiveness of environmental law in Scotland.  Public authority is defined in s 37 as “a person exercising any function of a public nature”, with the exception of Environmental Standards Scotland itself, courts or tribunals, the UK and Scottish Parliaments, and Ministers of the Crown, and excluding functions in connection with proceedings in the UK and Scottish Parliaments.  The powers available to Environmental Standards Scotland are set out in ss 16 to 36 and, in addition to the power to issue compliance notices, include the power to apply for judicial review or intervene in civil proceedings (s 34).

Constitutional Issues Arising from the Bill

Though narrower in scope than the first Continuity Bill, the second Continuity Bill is as much a piece of political rather than technical law-making.  In the ongoing political fall-out from Brexit in Scotland, it serves two main purposes.  First, it lays down a(nother) marker that the Scottish Government is not prepared to acquiesce in what it regards as a “power grab” by the UK Government in relation to decision-making competences returning from the EU.  The Scottish Government is insistent on its right to decide what regulatory standards should apply in areas of devolved competence post-Brexit.  Secondly, by maintaining close alignment with EU law, so far as possible, it hopes to smooth the path towards Scotland’s eventual re-entry into the EU as an independent state.  The merits of its provisions will undoubtedly be assessed in that context.

Nevertheless, the Bill does raise some more technical constitutional issues which should not be overlooked.

The Keeping Pace Power

Two issues arise in relation to the keeping pace power.

First, as already noted, it creates a substantial Henry VIII power.  Such measures require strong justification and appropriate substantive and procedural constraints.

The Policy Memorandum accompanying the Bill offers two main justifications (paras 26 – 30) for the keeping pace power.  On the one hand, it suggests that there might be a need under a putative UK-EU trade deal for a form of dynamic alignment with EU law.  On the other hand, so far as the Scottish Government may choose to align with EU law voluntarily, the requirement to use primary legislation if no other secondary legislative powers are available, or to create new secondary legislative powers on a case-by-case basis, would take up too much parliamentary time, and slow down the alignment process.

It is questionable whether these justifications are adequate.  The extent of regulatory alignment that may be required under a future UK-EU trade deal is highly uncertain and could in any case be addressed by taking appropriate powers in implementing legislation.  The volume-of-primary-legislation argument is also problematic, given that the keeping pace power may be used not only for technical amendments to existing areas of what will become retained EU law contained in EU regulations, decisions or other tertiary legislation, but also for the adoption of what may be wholly new policies contained in directives.  Implementation of new directives via the keeping pace power would not only give the Scottish Ministers considerable discretion as to how transposition should be effected, but would also give them power to implement policy objectives which had not been subject to any UK or Scottish input at the development and drafting stage.  Since directives usually have relatively lengthy implementation periods, the need for speedy amendment of domestic law in these circumstances also seems doubtful.  In the absence of any constitutional duty to maintain alignment with EU law, it is therefore highly questionable whether the keeping pace power ought to be so broadly drafted.  If it must be available for anything more than technical amendments, it ought to be subject to the heightened level of scrutiny provided by a super-affirmative procedure.

The volume-of-legislation rationale is also undermined by the second constitutional problem with the keeping pace power.  In other words, given the UK Government’s desire to preserve common regulatory standards within the UK post-Brexit – via the Common Frameworks process, the proposals in the recent UK Internal Market white paper, and the implementation of future trade deals – it is unclear how much freedom the Scottish Government will have to maintain alignment with EU law if this means diverging from standards set by the UK Parliament.  While the keeping pace power may represent a legislative two fingers to the UK Government, the fate of the first Continuity Bill gives us a good idea of how any future disputes over regulatory divergence and alignment might end.

Environmental Governance and Legislative Competence

Environmental governance post-Brexit raises an important constitutional design problem: how to replicate the guarantees of high environmental standards provided by EU law and the EU enforcement machinery?  From the devolved perspective, there are two aspects to this problem.  The first is how to bind legislatures as well as executive actors to comply with environmental principles?  The Bill does not even attempt to do this.  It would be impossible for Holyrood to bind the UK Parliament, and it is a moot point whether it could effectively bind its own successors.

The second issue is how to ensure that executive powers exercised at UK level, but in relation to devolved subject matters, comply with the same standards imposed on devolved public authorities.  As we have seen, the Bill does attempt to address this problem, by requiring UK Ministers to have regard to the guiding principles on the environment and related guidance under s 10(2), while the enforcement functions of Environmental Standards Scotland also seem wide enough to encompass environmental decision-making by UK as well as Scottish public authorities.  The question this raises, however, is whether it is competent for Holyrood to impose duties on UK Ministers and public authorities.

One potential objection is easily dealt with.  While the Bill does not expressly limit the duties imposed on UK ministers and public authorities to devolved matters, s 101 of the Scotland Act 1998 ensures that the Bill must be read as narrowly as required to be within devolved competence.  Accordingly, so far as UK ministers and UK public authorities are making environmental decisions in relation to Scotland which relate to reserved matters, they would not be bound by the Continuity Bill.

More problematic, though, is the analogy between s 10(2) and s 17 of the first Continuity Bill.  Section 17 purported to require UK Ministers exercising delegated legislative powers under UK legislation in relation to matters of retained EU law to obtain the prior consent of the Scottish Ministers before making regulations in devolved areas.  However, the Supreme Court held that s 17 was ultra vires because it was an attempt to condition the future exercise of Westminster’s power to make laws for Scotland, and hence amounted to an unlawful modification of s 28(7) of the Scotland Act 1998.

S 10(2) differs from s 17 in that it imposes only a duty to have regard to the guiding principles/guidance; it does not make the exercise of any decision-making power conditional upon compliance with those principles/guidance.  Nevertheless, the difference is one of degree only.  Failure to have regard to the guiding principles/guidance would constitute a ground on which to challenge the exercise of relevant UK Ministerial powers, and as with the s 17 power, the UK Parliament would have to expressly set aside the duty in order to free UK Ministers from it.

Constitutional Scrutiny of Holyrood Bills

When a Bill is introduced into the Scottish Parliament the responsible person – in this case the Cabinet Secretary for the Constitution, Europe and External Affairs – must state their view that the Bill would be within the Parliament’s legislative competence (Scotland Act 1998, s 31(1)). A government Bill cannot be introduced if the Minister feels unable to make a positive statement of competence. In addition, the Presiding Officer must state his view whether or not the Bill as introduced would be within competence (s 31(2)). A negative statement of competence by the Presiding Officer is not a veto on the introduction of a Bill but – for a number of reasons – the Scottish Government’s strong preference is for a Bill to be introduced with a positive statement. Unlike the first Continuity Bill, which was the first government Bill to be accompanied by a negative statement of competence by the Presiding Officer, with detailed reasons explaining that view, the second Continuity Bill has been introduced with a clean bill of health. However, we should not assume that the constitutional issues identified above will not be subject to further scrutiny.

For one thing, the s 31 statements made by the responsible Minister and by the Presiding Officer are brief and (as is typical where a positive statement is made) unqualified, both stating merely that, in their view, the Bill “would be within the legislative competence of the Scottish Parliament”. The statement made by the responsible Minister must be cleared by the Scottish Government’s Law Officers (Scottish Ministerial Code, para 3.4). Similarly, the Presiding Officer’s statement is made on the basis of advice given by the Solicitor to the Scottish Parliament. Undisclosed to the Parliament, however, is the extent of the discussions with, concessions made by, and any benefit of the doubt afforded to, the Scottish Government in the three-week pre-introduction period when competence is tested and the Law Officers’ and Presiding Officer’s views are formed. No distinction is made, for example, between positive statements of competence made with near certainty and those “close calls” where an analysis of the case law or of the possible application of s 101 tilts the balance of probability marginally more in favour of the Bill being within competence than not. Positive statements, in other words, might obscure – rather than alert the Parliament to – real risks that Bills are vulnerable to challenge and possible judicial censure.

Second, the Bill remains subject to two important constitutional checks. First, it will be subject to scrutiny by the Scottish Parliament’s Finance and Constitution Committee (FCC). Under a minority government – with a minority of seats on the FCC – there is an opportunity for the committee to ask searching questions of – and to recommend amendments to – the Bill, particularly in relation to the propriety and/or regulation of the Henry VIII power discussed above, where Parliament might feel that its legislative and scrutiny functions are undermined. Second, there is a further statutory check for competence by both the Scottish and UK Government Law Officers who, during the four week period between the completion of the Bill’s legislative stages and its submission for Royal Assent, may refer the Bill to the Supreme Court (s 33). The first Continuity Bill was the first Scottish Bill to be made subject to a s 33 reference. The basis of the UK Law Officers’ reference, the Attorney General said, was to “provide absolute clarity” and “legal certainty” given that the Scottish Ministers and the Presiding Officer had reached different views about the competence of the Bill. This seems to have been an argument of convenience given their efforts in the Supreme Court to defeat the Bill in its entirety, to narrow the scope of devolved power and to use the resulting delay to Royal Assent to amend Sch 4 of the Scotland Act 1998 in order retrospectively to place provisions of the Bill outwith competence. Given that the Lord Advocate has signed off on the second Continuity Bill prior to its introduction (and is wary of the risk highlighted by his counterpart in Wales in making a defensive reference) it is extremely unlikely that he will refer any question about legislative competence to the Supreme Court. It remains to be seen, however, whether the UK Law Officers will make a reference – for tactical or for substantive reasons – in order to test the competence question.

Christopher McCorkindale is Senior lecturer in Public Law at the University of Strathclyde; Aileen McHarg is Professor of Public Law and Human Rights at the University of Durham; Tom Mullen is Professor of Law at the University of Glasgow. This comment was previously published in the UK Constitutional Law Association Blog (UKCLA)

The views expressed in this article reflect the position of the author and not necessarily the one of the Brexit Institute Blog

Image credit: Flags outside the Scottish Parliament in Edinburgh, Scotland. Wikimedia Commons via a CC-BY-SA-2.5 license

 

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