Brexit, International law & the UK Constitution

On June 23, 2016, the “shot heard round the world” was the British people voting to exit the European Union (EU), or simply “Brexit”. The United Kingdom’s (UK) EU Referendum, in which a record 72.2% of the electorate voted, resulted in 48.1% choosing to “remain” and a surprising 51.9% opting to “leave”. Immediately after the referendum’s unexpected outcome, a snowball reaction began that affected the UK’s political landscape and international financial markets.

The political casualties and financial impacts of the Brexit vote have been monumental and historic to say the least. As financial markets opened on Friday, June 24, 2016, the Pound Sterling had its worst trading day since the 1967 devaluation, losing 8% by 18:00 BST. The FTSE 250 index took a 7.2% hit, the worst since the October 1987 crash. The Stoxx Europe 600 index fell by 7%, the steepest one day drop since the Financial Crisis of 2008. British banks also took major hits, as Barclays PLC lost 30% at one point on the 24th and the Royal Bank of Scotland Group closed the trading day down 18%.

The UK Prime Minister, David Cameron, who campaigned to remain in the EU, became the first casualty of the EU Referendum when he announced he would stand-down at the Conservative Party’s meeting in October 2016. The presumptive replacement, the former Mayor of London, Boris Johnson, a Member of Parliament (MP), became the second casualty when fellow Brexit leader, William Gove MP, withdrew his support of Mr. Johnson before launching his own campaign to become the Party’s leader and Mr. Cameron’s replacement. Two weeks after the Brexit vote, a runoff leadership ballot was cast on July 8, 2016, in which Mr. Gove was eliminated. Andrea Leadsom MP, a finalist, pulled-out of the Conservative Party leadership battle on July 11, 2016, leaving a clear path for Home Secretary Theresa May to become Britain’s Prime Minister two-days later.

Amongst the political and financial roller-coaster that ensued, the legal aspects of withdrawing the UK’s membership from the EU are an unchartered and complicated legal web. For starters, the EU Referendum was only advisory to Parliament and not binding on the Government. The UK Constitutional and Public International law legal battles, which are currently underway, are of great interest to lawyers and scholars since they have never been applied in practice.

Under the foundational pillar of the British Constitutional system, the doctrine of “parliamentary sovereignty” implies that the Parliament of Westminster is the supreme legal authority of the United Kingdom of Great Britain and Northern Ireland. Contrast this principle with the United States’ system of government, where a codified constitution is the highest law and the Supreme Court has the power to judicially review acts of Congress and the executive. In the UK, courts cannot generally overrule legislation and no parliament can pass laws binding a future parliament.

Some refer to the British Constitution as “unwritten,” though this is not entirely accurate. Parliament has passed laws which, politically speaking, limit the scope of the doctrine of parliamentary sovereignty. These laws include: the European Community Act 1972, the Acts creating the Scottish Parliament and Welsh Assembly, the Human Rights Act 1998, and the Constitutional Reform Act 2005 that established the UK Supreme Court (on October 1, 2009), separate from the House of Lords, to serve as the nation’s highest appellate court. Other acts have received higher standing in the British constitutional hierarchy too. Fundamentally, the principle of parliamentary sovereignty remains in place as, at least theoretically, a future parliament could repeal any of these acts.

Perhaps the most significant British constitutional development has been the UK’s participation as a Member State of the European Community (now European Union) since January 1, 1973. The effect of joining the EU was that the UK had its “Constitution” subjected, for the first time, to the exercise of powers by and processes of an entirely non-domestic set of institutions.

EU law, the body of law developed by the EU and its institutions, is superior to laws of the whole of Great Britain and Northern Ireland until the UK officially withdraws. When the UK joined the European Community, some scholars and pundits claimed that the UK Parliament had given away aspects of its own sovereignty in exchange for access to the Common Market – a constitutional question that has remained contentious ever since is whether the United Kingdom can withdraw from the EU.

The legal authority for the referendum came from legislation passed by Parliament in December 2015.

University of Cambridge Law Professor Mark Elliott commented that:

“The legislation that provided for a referendum to be held said nothing whatsoever about the effect of the outcome of the referendum, and the result does not place the Government under any legal obligation to secure Brexit.”

While the Government is not legally obligated to trigger an exit from the EU, the political reality is that the electorate is expecting the Cabinet to respect the will of the populace and perform according to the outcome of the referendum.

Prior to the vote, Dr. Alan Renwick of University College London’s (UCL) Constitutional Unit wrote:

“In purely legal terms, a referendum vote to leave places no obligation on the Prime Minister to invoke Article 50 [TEU]. Indeed, it places no obligation on him to do anything: the referendum is, formally, advisory only. In practice, of course, he will have to respect the result.  But does that mean invoking Article 50?”

The legal point that is currently being debated is whether the Prime Minister has the prerogative to act on the vote’s result without Parliament taking any prior action. University of Glasgow’s Regius Professor of Law, James Chalmers, has expressed the view that this was a matter of dispute:

“There may be litigation seeking a declaration that an Act of Parliament is required. My expectation is that there will be an Act of Parliament, because there is no clear gain in proceeding without one.”

Further, British diplomat David Riley, during a June 29, 2016 Brookings Institution event stated that:

“While the legislation is not binding on the Government, nor does the legislation say Parliament has a role in the making of Article 50 [TEU]. It is for the Prime Minister to decide when to invoke Article 50 and the extent to which he or she wishes to involve Parliament.”

On June 29, 2016, an Informal meeting of the 27 heads of state or government (UK excluded) of the EU Member States indicated the European Council is expecting Article 50 TEU (Treaty of Lisbon) to be the legal basis for withdrawal and that official notice to withdraw must come from the UK Government. Since the Prime Minister is the head of the UK Government, it will be for Mr. Cameron’s replacement to send an Article 50 notice to the EC in Brussels.

Under the Treaty of Lisbon 2007 (which consolidated and amended the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU)), which came into force December 2009, there are two possible routes for a Member State to leave the EU. The logical route is to proceed under Article 50 TEU, as it is the treaty provision which governs what happens when a Member State decides to withdraw from the Union; the alternative, unlikely method is under Article 48 TEU, which governs the process for amending of the treaties of the EU.

Article 48 TEU, governs the rules for its revision and amendment. Implementing Brexit via Article 48 TEU would be to revise the Union’s membership list to exclude the United Kingdom as a Member State from the EU treaties. In theory, this option sounds easy, but would be challenging from both a procedural and political aspect, as two layers of veto powers are involved. Under Article 48 TEU, there must first be unanimous agreement among all Member States to trigger it. Thus, each Member State would have a veto power. The second layer of veto power occurs when each national government must ratify, according to the Member State’s method for amending its own national constitution, the revisions to the TEU.

Under Article 50 TEU, once an EU Member State has decided to withdraw from the EU, the Member State “shall notify,” in other words, legally communicate that intent to the European Council, thus triggering a two-year negotiations period. The negotiation period exists to ensure the conclusion of a withdrawal agreement concerning trade provisions, EU treaty arrangements, etc. The EU Council is granted the authority to conclude such withdrawal agreement on behalf of the Union by a qualified majority of Member States (after obtaining consent from the EU Parliament). The UK exit date would be either the date of the withdrawal agreement or two years from the date of, “notification of decision”.

If after two years no agreement is reached, the UK, under Article 50(3) TEU, would simply cease to be an EU Member State without any transitional provisions or trade deals. A negotiated withdrawal is adventitious for achieving transitional and post-exit trade, tax, and citizenship arrangements. The prospect of negotiating an agreement is one of the UK’s, the EU’s, and individual Member States’ strongest bargaining chips in the Article 50 process. However, an automatic withdrawal, two years after commencement of Article 50, does not necessarily mean non-use of the power to negotiate a withdrawal agreement is a horrible outcome. The UK and EU would be free to make treaties post-withdrawal in the same way that the EU can make treaties with other non-Member States.

A “decision,” for the purposes of Article 50(1) TEU, must be in accordance with the given Member State’s own constitutional requirements. This means a “decision” is made either by the exercise of the prerogative powers (i.e. Prime Minister acting on behalf of the Crown) or through a piece of primary legislation (i.e. Parliament acting in its sovereign role). The EU Referendum vote was merely advisory, and to comply with the “constitutional” element in Article 50, either the prerogative power or the parliamentary powers, depending on the point of view, must be used to formally “notify” the European Council in order to trigger Article 50(3) TEU’s two year clock.

Assuming a “decision,” for Article 50 TEU purposes is to be made by Parliament, a few scenarios might playout:  

(a) Scottish National Party (SNP), Labour, and a few Conservatives could lead a revolt and refuse to take action; or

(b) The same could vote down any measure upholding the results of the EU Referendum.

In Addition, Parliament might also pass a bill which would restrict the exercise of the prerogative power by the Prime Minister, thus preventing him or her from acting on the results of the EU Referendum. If the next Prime Minister, who will take office in October 2016, decides that both the ‘decision to withdraw’ and ‘notice to the European Council of the decision’ are prerogative powers, then there may occur a scenario in which ‘statute beats prerogative’.

Alternatively, UK Constitutional Law Association fellows Nick Barber, Tom Hickman, and Jeff King argue any prerogative power that would otherwise be available to the Government in order to make an Article 50 TEU withdrawal decision is displaced by the European Communities Act of 1972. The argument is based on the holding in the Fire Brigades Union case, in which Lord Browne-Wilkinson said, “‘It would be most surprising if prerogative powers could be validly exercised by the Executive so as to frustrate the will of Parliament expressed in the statute.” The difficulty of challenging the prerogative in this way is that the EC Act of 1972 does not confer any particular rights on anyone. The Act does, however, show Parliament’s will to give effect to the UK’s obligations under EU treaty law within the country. Since foreign relations are usually perceived as a part of the prerogative powers, triggering Article 50 TEU may be both the exercise of a common prerogative authority through the usage of a treaty provision and going against the implied will of Parliament through nullifying its 1972 Act. This question will further be debated as the Michcon de Reya law firm seeks a definitive answer.

On July 3, 2016, solicitors at Michcon de Reya, acting on behalf of an anonymous group of clients, contacted government lawyers to seek assurances that Article 50 will not be triggered without an act of Parliament. The solicitors at the law firm, who are not advocates, retained the services of renowned constitutional advocates who were bestowed the distinguished title of Queen’s Counsel (QC), The Lord David Pannick QC of Blackstone Chambers and Rhodri Thompson QC of Matrix Chambers, as barristers who have standing to appear in court for Michcon de Reya’s clients. The Lord Pannick QC sits on the Constitution Committee in the UK House of Lords.

After the Brexit vote, the Petitions Committee, which is made up of 11 backbench Members of Parliament, received an e-petition with over  4 million signatures asking the Government for a 2nd EU Referendum. Under a convention of Parliament, any e-petition with over 100,000 signatures will be debated in the House of Commons. This petition is scheduled for debate on September 5, 2016. However, the Government responded by saying:

“The Prime Minister and Government have been clear that this was a once in a generation vote and, as the Prime Minister has said, the decision must be respected. We must now prepare for the process to exit the EU and the Government is committed to ensuring the best possible outcome for the British people in the negotiations.”

Even though the majority of the British electorate may have voted in favor of exiting from the EU, the UK will continue to remain a Member State until key constitutional questions are resolved in order to begin the withdrawal process. The first order of business is deciding if a decision has been made which meets the UK’s Constitutional process. The New Government has intimated it will honor the outcome of the Referendum and withdraw from the Union using Article 50 TEU. The New Prime Minister, Ms. May, has indicated how the withdrawal process should take place, but this is only one opinion, and more importantly, just the beginning of the process. It is quite clear, that even if the New Government were to not follow the advice of the electorate, the financial and political damage is already irrecoverable. The world has already reacted to Brexit, as though the vote’s outcome were contractually binding. The snowball effect in terms of political shifting and financial and business turbulence will continue for the next several years. The legal issues of how national constitutional law interacts with international treaty law will test unprecedented waters. The legal debate on how to leave, and then, how to unravel a union that has existed since 1973, will be a daunting challenge to say the least.  It is speculated Brexit will prompt changes in formal rules and conventions within the EU and will serve as a case study to other nations contemplating what would happen if they were to follow the UK. The legal path of leaving the EU is a watershed moment in the history of UK Constitutional and Public International law.

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*Special thank you to Emory University J.D. (Class of 2017) candidate Anton Stewart, BA, LL.B. for assistance in various aspects on this article.

Soper, Matthew. "Brexit, International law &; the UK Constitution." ABA Section of International law; Europe Update Issue 13 (July 2016) (Brexit Special Edition) Web. 2016.

Re: The U.K. faces a bad breakup

Lord George Robertson’s Jan. 6th opinion editorial in The Washington Post completely ignored Scotland’s legitimate right to be free of English tyranny. During my 3 1/2 years of study at the University of Edinburgh, I supported the Free Scotland Movement and participated in the rally featured in the column’s photo.

In 1783 the America seceded from England after winning a bloody Revolution, so why then can’t Scotland

peaceably secede in 2014?

Eight hundred years ago at the Battle of Bannockburn, Scotland won her first major victory against the English. In a modern era, nations should be free to peaceably dissolve the bands that chain one to another. A democratic vote is not re-Balkanizing Europe; the Romans struggled to reign in the feudal estates.

The 670-page Blueprint for Scotland, carefully crafted by academics and policy makers, is the most comprehensive guide to independence ever written. The “Better Together” proponents, such as Lord Robertson, have merely mocked the Blueprint.

The problem is that London dictates how Scots should live their lives. The Scots are overly taxed, overly regulated, and the English openly discriminate against the Scottish people. That is why Scotland deserves to join the United States in be free of English rule.

A people should be free to determine their own destiny.

It's time to simplify the tax code & reduce governmental spending

With over 30,000 pages in the UK tax statutes it is time for parliament to tackle the ever burgeoning and convoluted mechanism for growing the governmental Leviathan and redistributing wealth. What modern social states like Britain and France and even the United States fail to grasp is that one must create wealth before you can re-distribute it.

Some argue that since paying taxes, by sheer definition, is inherently unfair, then the net should be cast wide to speed the pain equally. In other words, taxing or creating fees, surcharges, tariffs or levies for everything from income to interest earned from a bank account or building society; from tobacco and alcohol to bread and cheese; and from corporation tax to inheritance (death) tax.

The UK saw its highest tax rate in 1966, when the Labour government of Harold Wilson ushered in a 134.25% tax rate. This outraged George Harrison of The Beatles, who was affected the 95% super-income tax bracket, that he composed the music and lyrics for the ‘Taxman’, as a form of revolt. The Beatles band recorded the song in April and it was released in the album, ‘Revolver’ in August 1966.

 Tolly's UK Yellow Tax Handbook 2010 being burnt in protest

Many criticise the Thatcher-Major era as being ‘soft’ on taxing the rich and giving away government assets to private industry. The critics fail to acknowledge the quantitative data. The highest income tax bracket was 98%. Stated differently, for every £1 a person earned, 98p was going to the government. Today, the highest income tax bracket is 50%, which took effect in assessment year 2010 and catches individuals earning over £150,000 per annum. Under the New Labour government of Tony Blair, much of the neoliberalist economic policies of the Thatcher-Major governments were continued. This led Labour MP, Peter Mandelson to coin the term “Neo-Thatcherism” to describe the economic policies of New Labour.

Neoliberalism is a school of modern political theory which stresses market-driven approaches to economic and social policy, based on neoclassical theories of economics, which advocates efficiency of private enterprise, liberalization of free trade and open markets, and encouraging consumer free choice, individual thinking, and private enterprise. The tenets have frequently been a topic of conversation at Bohemian Grove. The ‘Washington Consensus’ is considered the theory’s definitive statement. International organizations such as the International Monetary Fund (IMF), World Bank, and World Trade Organization, along with regional trade associations such as the North American Free Trade Agreement (NAFTA), Association of Southeast Asian Nations (ASEAN), the Southern Common Market (MERCOSUR), and the European Union (EU) have endorsed the general principles of the theory.

National tax policy should encourage innovation and efficiency. Jobs must be created, at the core is build and maintain a strong and vibrant middle class, which broadens the tax base and brings stability to volatile global markets. The UK tax statutes are so complicated that while everyone in society gets caught by the tax ‘net’ burden, the lofty weight of a growing public sector places high demands to grow the public coffers. Government must learn to do more with less. A focus should be on prioritization of national policy objectives and efficiency placed at the heart of society’s vision and mission. An athlete performs best when he/she is in lean and well trained. Likewise, a government who learns to operate on less is able to understand the benefit of competition and getting quality.

One of the most efficient governmental organizations is the EU, which operates on a relatively small budget and meagre staff, yet the data they produce is unprecedented when comparing to national governments. An example is a student who is living on a shoe string budget is able to do far more than a professional paid a monthly salary. Why? The student understands the value of every pound-sterling and looks for the cheapest option (eg- riding the bus as opposed to the train, sleeping in a hostel compared to a 5-star hotel, et cetera et cetera). If governments operated in the same manner, more money would be in the hands of the private sector to grow the economy and allow citizens more options with how to live their lives.

In protest of the UK’s and US's confusing and convoluted tax policy, I took part in a tax act protest, where students burned their tax statutes in protest. Please join me in supporting a simplification of the tax statutes - the first step towards creating a more just British or American society.

History in the making: first-ever televised prime minister candidate debate

Last night (Thur., 15 April 2010), I had the privilege of watching history in the making, for the first-ever British prime ministerial candidates debated on television. Technically speaking, the prime minister of Her Majesty’s Government is appointed by the Queen (Act of Settlement 1701, Art. 1); however it is by convention of the constitution that the reigning monarch appoints the leader of the political party which controls the most seats in the House of Commons.

The first televised U.K. prime minister debate was almost 50 years after the first-ever televised American presidential debate, which occurred on 26 Sept. 1960 between the Senator from Mass., John F. Kennedy, and the U.S. Vice President, Richard Nixon; and was one of four debates held prior to the November election, which saw Kennedy elected as youngest American president. Nixon arrived at the first debate in an ill-fitting suit, and refused make-up to improve his colour and lighten his perpetual ‘5:00 o'clock shadow’. Kennedy, by contrast, had spent early Sept. campaigning in California. He was tan, confident, and well-rested. Half of the 70 million Americans who watched the first debate said it influenced their opinion, while over 6 per cent reported their vote was the result of the debate alone. Subsequently, Germany, Sweden, Finland, Italy, and Japan established a tradition of televised debates between contenders wanting to be head of government. It remains quite puzzling as to why Great Britain is nearly half-a-century late in establishing a televised debate norm.

Gordon Brown (incumbent prime minister and leader of the Labour Party), David Cameron (leader of the Conservative Party) and Nick Clegg (leader of the Liberal-Democrat Party) sparred in front of a live studio audience of several hundred citizens selected to represent various regions, economic classes, and minority groups from across the United Kingdom. However, it was the 10 million Brits who tuned in to watch the historic first-ever televised debated that was the ‘real’ target audience of the three candidates.

David Cameron had apparently never watched a televised debate before, as he seemed rather confused as to where to look at the camera and on top of that he seemed unable to relax and look human, but instead wanted to answer each question with a pre-memorized response. Nick Clegg, a young guy, appeared to have taken lessons right out of the John F. Kennedy ‘play book’, as he seemed tan, relaxed, and very comfortable in-front of the camera, although he did look a bit nervous at times. Gordon Brown, who was going for the Winston Churchill look by displaying a few extra stones, deep bags under his eyes, and making an appeal to being a war time leader, seemed at times to forget he was the incumbent prime minister, as he vacillated between being a confident leader and someone who was not sure what was going on.

The day after the debate, every major British newspaper reported Nick Clegg as the winner, although numerically speaking his party will not win a majority, however it is more than likely there will be a hung parliament and Labour and Lib-Dems will form a government together. The scenario seems more than likely, especially since Brown rarely launched an attack against Clegg. I watched this debate in a room filled with students at the Tiviot, the University of Edinburgh’s student union. The overwhelming majority of the students were in favour of Gordon Brown, a native of Scotland and an alumnus of the University of Edinburgh.