Thursday, November 3, 2016

Brexit Just Became Even More Complicated, Thanks to High Court

Ruling isn’t likely to lead to a blocking of Britain’s exit from the EU, but it will make it messier.

By Stephen Fidler
The Wall Street Journal
November 4, 2016

If the pound rallied after the British High Court’s ruling Thursday because investors expect Brexit to now be less likely, they will probably be disappointed. The odds are that the court’s decision, rather than ruling out Brexit, will just make it messier.

It certainly complicates the life of British Prime Minister Theresa May, and at the very least could set back her desired timetable for exiting the European Union. She has said she would start two years of negotiations over the divorce settlement, invoking Article 50 of the EU’s Lisbon Treaty by the end of March.

The government has said it would appeal the ruling to the Supreme Court, which will hear arguments in December and probably rule in January. If the top court overturns Thursday’s ruling, the way is cleared for Mrs. May’s timetable.

However, that court may want clarity on an assumption made by the High Court and by both sides in the case: that Article 50, once triggered, is irrevocable.

The High Court said because Article 50 has no reverse gear and would mean the U.K.’s inevitable exit from the EU, invoking it would take away some rights from British citizens and people living in the U.K. For that reason, Parliament would need to approve it.

The reversibility of Article 50 is, however, a matter of some dispute. European Council President Donald Tusk has said the U.K. could row back on Article 50 if it didn’t like the outcome of the negotiations.

Ironically, if the U.K.’s top court wants certainty on this, it would have to refer the matter to the European Court of Justice, the EU’s highest court, and then wait months for its adjudication. Steve Peers,a legal expert at the University of Essex, says other British courts could ask for this clarification, too.

If the U.K.’s top court upholds Thursday’s judgment, it sets in train a complicated legislative process.

The government would need to place before Parliament a draft bill that would be debated in the House of Commons and amended before going to the (unelected) House of Lords for debate and further amendment. The whole thing would then be sent back to the Commons for its final say.

A three-month timetable for this process would be ambitious, particularly if lawmakers demanded greater scrutiny about the government’s negotiating stance. Such a request would make it much tougher for Mrs. May to keep to her plan not to offer “a running commentary” on the Brexit talks.

Parliament could reject the bill, accept it or try to tie the government’s hands. While Parliament couldn’t insist on the exact shape of the final deal, since that would depend on negotiations with the rest of the EU, lawmakers might set certain conditions. These could include preserving the rights of EU citizens already in the U.K. or insisting that the government seek to minimize economic disruption.

‘I worry that betrayal may be near at hand.’—Nigel Farage, former leader of the UK Independence Party

The big question, though, is whether the large anti-Brexit majorities in both houses will defeat the bill and prevent the government from invoking Article 50 altogether. For various reasons, this is unlikely—though tight parliamentary arithmetic means it is impossible to rule out.

A taste of the reaction, were it to happen, was already evident Thursday. “I worry that betrayal may be near at hand,” Nigel Farage, the former leader of the UK Independence Party, tweeted, adding: “I now fear every attempt will be made to block or delay triggering Article 50. They have no idea [of the] level of public anger they will provoke.”

Indeed, any parliamentary decision deemed to ignore the result of the referendum—which was legally speaking only advisory—would risk provoking a political crisis.

In the Commons, members of Parliament would have to consider whether they wanted to ignore the referendum vote. If Mrs. May wanted to bring her party into line, she could make it a vote of confidence, meaning a general election would be called if she lost.

That would pose real challenges for many MPs—particularly Conservatives—who would have to seek re-election in their euroskeptic constituencies. Chris Hanretty of the University of East Anglia has calculated that majorities in 401 out of the 633 parliamentary constituencies in England, Scotland and Wales voted for Brexit.

But Mrs. May’s working majority is thin—only 15. And the House of Lords, which doesn’t face elections, could prove a thorn in her side. The most likely outcome is still Brexit, if delayed, and it will be politicians rather than lawyers who decide it. But the increased uncertainty will keep investors on their toes, and the British political system under strain.

Article Link To The Wall Street Journal: