Nothing compares 2 EU – The lowdown on Article 50

It’s been 9 hours and 277 days.

Since (“Vote Leave”) took the EU away.

Theresa May is due to trigger Article 50 on the 29th March. But what is Article 50 and what does it mean for Britain and the future of the EU?

What is Article 50?

The Lisbon Treaty is an agreement signed by heads of state and government of countries that are part of the EU. It became law in December 2009, after European leaders launched a process to make the EU “more democratic, more transparent and more efficient.” Part of that law was Article 50 – a basic five-point plan should any country wish to leave the European Union.

In January, the Supreme Court ruled that the Government could not trigger Article 50 without an Act of Parliament.

What was the Article 50 case about?

The case concerned questions relating to the constitutional arrangements of the United Kingdom, in particular, the extent of the government’s power to affect changes in the law through the exercise of what is called its “prerogative powers.” Prerogative powers are a collection of executive powers, that the government can use without needing the authority of Parliament. While exercising such powers can be controversial (as they have the effect of bypassing Parliament), the government can use them to enter into and depart from international treaties. What it cannot do is use them to change the British constitution.

(i) Camp Parliament

Gina Miller, represented by Lord Pannick QC, argued that parliament is sovereign, meaning it is supreme over all other government institutions, including executive and judicial bodies.

According to Camp Parliament, the government was using its executive powers to override legislation, specifically, the European Communities Act 1972 and therefore undermining parliamentary supremacy. Only legislation can override legislation, meaning Article 50 could only be triggered with the authority of an act of Parliament. As Lord Pannick put it, “what parliament created only parliament can take away.”

(ii) Camp Government

The main thread of Camp Government’s argument surrounded the construction of the European Communities Act. It was their view that, following the result of the referendum, it was the intention of Parliament that the UK’s future in relation to the EU be decided solely by the government. The government, represented by James Eadie QC, submitted that the onus has to be on Camp Parliament to highlight where in the legislation the executive powers were removed. In other words, those executive powers were never removed by the European Communities Act or some other relevant statute. The Supreme Court decided on that fateful day in January, that Theresa May’s government needed parliamentary approval in order to trigger Article 50.

Parliament has now passed a Brexit Bill, but how will the UK “trigger” Article 50?

The European Commission, the executive body which leads the EU, said it would not negotiate with the UK until Article 50 was formally invoked. This means that Theresa May will need to write a letter to the Commission, stating that the UK wants to use Article 50 and start the formal process of leaving the EU.  Once Article 50 has been invoked, the UK government will negotiate with the EU and try to agree on a framework for a future relationship with the UK.

What happens afterwards?

Two years of negotiations between the EU and the UK will commence. The way these negotiations progress will affect everything, from trade to immigration. Some EU law which directly affects UK law will have to be re-legislated. If we don’t conclude negotiations within two years, we’ll be subject to punishing World Trade Organisation rules and tariffs between the UK and the EU.

What will be affected?

(i) Effect on financial markets

The triggering of Article 50 has for long, been seen as a significant market-moving event, however, the effect on Sterling is likely to have only a modest impact, according to strategists. This is partly because investors are no longer in denial about Brexit and have priced in the reality of the coming divorce.

(ii) Effect on property

Real estate is an area of particular focus, amid the risk that some companies may decide to relocate certain operations. London could see the biggest impact, while other UK cities, such as Manchester, Bristol and Leeds being less likely to be affected. The reason for this, according to experts, is ongoing tenant demand in these areas, owing to diversification, modern infrastructure and quality of life. Moreover, the London office market, whilst continuing to be a major hub for international business, could see some of its activities being switched to the EU – something that could affect lawyers and those who provide professional services in the financial sector.

(iii) Effect on the EU

Many are saying that triggering Article 50 will affect the EU’s cohesion, confidence and international reputation. According to the Financial Times, “the liberal political and economic order for which Britain, the EU and their allies and friends around the world stand” will be undermined. On the other hand, European leaders will have an interest in ensuring that the EU maintains a close economic relationship with the UK for everyone’s benefit.

(iv) Can I still eat my dinner in a fancy (French) restaurant?

Yes, however, specialty dishes, such as escargots, will become more expensive, which is likely to hike up prices. Wine will also be subject to enhanced taxes and similar price hikes.

Nothing compares 2 EU

The triggering of Article 50 marks a decisive change of direction for the UK towards an uncertain destination.  The search for a compromise will dominate discussions over the next two years and the Prime Minister has warned that she will walk away from a bad deal, come what May. The true effect of triggering Article 50 however, remains to be seen (for the Article 50 procedure has never been used – and its author never intended it to be). It’ll be interesting to see how the government balances moving away from Europe while attempting to maintain close ties – a balancing act not easily performed in the world of politics.

Watch this space.

Lauren Delin

Solicitor at Rocket Lawyer
Lauren is a solicitor at Rocket Lawyer UK. She is a passionate law enthusiast and particularly interested in intellectual property and commercial law. She is committed to producing useful legal templates and making legal services accessible to everyone.