A whine made from sour grapes

It is true that, unlike (for example) our referendum on the alternative vote, Parliament chose not to make the EU referendum legally binding. This point, along with many similar, is available to be made.

But it is a whine made from sour grapes.

It is available but it fails to address head on the democratic imperative of the Referendum result. The fact that the result was not technically binding does not have as its consequence that it can be ignored.

So where does this leave the court challenge, that seeks as a precondition for triggering Article 50 the passing of an Act of Parliament?

It has been, and will be, said, and often, that the challenge is about thwarting the will of the people. That’s an expedient line to take but it does suffer from this defect: it’s just not true.

Here’s what David Pannick QC, who argued the case, for the lead claimant said:

If we are correct in our legal submissions, and if the government were then to place a bill before Parliament, it would be entirely a matter for Parliament whether to enact legislation and in what terms. Parliament may decide to approve such a bill, authorising notification. Parliament may reject such a bill, or it may approve it with amendments which may impose limits on the powers of the defendant. For example, as to the date of notification; for example, in relation to parliamentary approval of negotiating terms; for example, as to the need for the minister to report back to Parliament at defined times. All of those would be matters for Parliament to consider and decide.

There is (and I think, rightly) little or no enthusiasm in Parliament for rejecting a Bill authorising the triggering of Article 50. But there is for imposing conditions.

The referendum left important questions unanswered – and it denies reality to pretend otherwise. It was silent, to pick up Lord Pannick’s point, on the date of notification. MPs did think to table an amendment (see NC4) that required Parliament to trigger Article 50 by a certain date but that amendment was not adopted. But, more importantly, the referendum left unanswered the fundamental question of what Brexit means.

Some Leavers say it was about immigration. For others it was Taking Back Control. Many say it was about the £350m. Who is to pick between these sometimes competing objectives? And on what basis do they assert the right to do so?

And, when we come to consider the consequences of the vote, we must also have regard to the wishes of those who voted to Remain. The Referendum asked whether we should leave the EU. It did not ask whether those who voted Remain – some 48% – should lose all opportunity to help shape a country that belongs to them too.

These choices, their consequences, are enormous questions. Fundamental to the life of our nation. The referendum result delivers a democratic imperative but it also creates a democratic deficit.

So let me ask this question, and non-rhetorically: how it can be wrong to require that the Government confront that deficit?

And if it is said, as seems to be the Prime Minister’s position, that Parliament cannot know before the event what we will negotiate for, the logical consequence is that the democratic deficit must be filled after the event.

And what filling the deficit after the event looks like is this.

The deal must be put in a meaningful way to Parliament or the country. And what ‘a meaningful way’ means is ‘with a genuine alternative’.

For the mutual convenience of the parties, the Article 50 litigation has been conducted on the footing that a notification under Article 50 is a bullet that, once fired, cannot be recalled to the chamber. Here is what James Eadie QC, who acted for the Government, said:

We say that a notice of a decision cannot be given on a conditional basis… We also say that an Article 50(2) notice is irrevocable, and once given, it will inevitably lead to withdrawal from the EU on a date which is subject to negotiation, but cannot be any later than two years from the point of notice, unless extended unanimously.

The consequence is that the opportunity the Government means to offer to Parliament to ratify the deal is, as even Jacob Rees-Mogg MP recognises, no opportunity at all. Quoted in The Times he said:

It is quite possible parliament will vote down a deal — but that just means we leave the EU without any deal at all, leave the single market and trade on WTO terms.

But there is another way to look at the consequences of triggering Article 50.

Speaking here (at 24.55), Donald Tusk says, unequivocally and contrary to the footing on which the litigation has been conducted, that the Article 50 notification, once given, can unilaterally be reversed. And he added here:

In my opinion, the only real alternative to a “hard Brexit” is “no Brexit”…Of course it is and can only be for the UK to assess the outcome of the negotiations and determine if Brexit is really in their interest.

And he is right.

It is for us to assess the outcome and for us to determine whether it is in our interests. That is the real choice. It can be made by the electorate in the form of a referendum on the outcome or, should Parliament prefer, by Parliament. But it must be made by the UK. It cannot be made by an Executive that holds no democratic mandate to do so.

And here is where the Article 50 case comes in.

If the Claimants succeed then the Government will need to put before Parliament an Article 50 Notification Bill. And Parliament will have the opportunity to impose one or more conditions on the triggering of Article 50. And the one condition it should impose is the one that addresses that deficit.

If not offered by the Government in the Bill, Parliament should table and uphold amendments. Those amendments should require that there is put before the people or Parliament a sharp and focused choice. ‘Here is the deal that we have negotiated. It is what we, your Government, think reflects the will of the people in voting to Leave. It delivers an exit from the EU in a way that balances the hopes and wishes of all the citizens of the United Kingdom. But the choice is yours. Take this or stick with what we have as members of the EU.’

If asked, I will draft those amendments.

Brexit: the important role of the Court of Justice

It attracted surprisingly little press attention but, in a speech of late last week, Donald Tusk offered up a tantalising possibility. Negotiations might take place between the UK and the EU. And when they had concluded, we could choose between the outcome of those negotiations (which he said would be a ‘Hard Brexit’) and the status quo of our remaining in the EU.

Tusk was gently floating a political possibility. He didn’t address the underlying legal question – one of construction of European law – which is whether, having made a notification under Article 50, we can later and unilaterally reverse it.

But it is no exaggeration to say that the legal question is of enormous political importance.

If the answer is ‘no’, the triggering of Article 50 will commit us to leaving the EU. The effective consequence of the answer being ‘yes’, on the other hand, may be to compel the Government to offer Parliament or the electorate at large a vote on the terms of the deal. Parliament may require a second mandate as the price of passing an Act to trigger Article 50 – or passing the Government’s proposed ‘Great’ Repeal Act. Even if Parliament does not, should during the course of negotiations the popular mood turn against Brexit (likely if economic conditions continue to deteriorate) the public may demand it.

What makes this question especially topical is that the same legal question as is embedded in Tusk’s political offer also lurks just below the surface of the Article 50 litigation that is presently taking place in the High Court.

The Claimants’ case – that triggering Article 50 can only be done by Act of Parliament – rests upon a contention that removing rights from individuals cannot be done by the Executive. It is something only Parliament can do. But if Article 50 is reversible, the central assertion in the Claimants’ case may not arise. If Article 50 is reversible we can’t know that the consequence of Theresa May triggering Article 50 will be to remove those rights.

Until Friday, this legal question looked likely to remain below the surface.

For political reasons – as I predicted back in June – the Government was loathe to argue that Article 50, once triggered, could nevertheless be reversed. Arguing this would leave our membership of the EU an open book and infect the remainder of the Conservatives’ term in office. The reversibility of the Article 50 case suited the Claimants too. As I have explained above, their legal case that only Parliament could trigger Article 50 is weakened (perhaps fatally) if Article 50 is reversible.

So it seemed as though the question might pass unresolved.

But on Thursday the High Court upset this expedient consensus. The Lord Chief Justice indicated he was not prepared to proceed on a mutual assumption that Article 50 was irreversible. He wanted to decide the point.

So what happens now?

(I should say for the record that, although I was the original client for the purposes of obtaining advice and writing to the Government, for legal reasons I now have only a limited and informal involvement in what became the so-called People’s Challenge. Specifically I do not know what it intends to submit.)

What we know is that, before the litigation, Government considered the matter carefully and decided not to assert that Article 50 can be reversed. It seems to me very unlikely that the Government will now form a different view. I expect that it will decide to keep its powder dry and perhaps take the point in the Supreme Court if it loses in the High Court. It will want to hedge its bets.

The Lead Claimant – Gina Miller, represented by David Pannick QC – has advanced what she coyly describes as an “assertion of law” that Article 50 is irreversible. This, too, is a form of bet-hedging to see what the other side does. Only if the Government asserts that Article 50 can be reversed will Lord Pannick feel compelled to move beyond assertion.

Counsel for the People’s Challenge – Helen Mountfield QC – had sought to invite the High Court to proceed on an assumption that it is irreversible. She came – and will come again tomorrow – under pressure to firm up her position. But what is clear (to me at least) is that she cannot be forced to advance submissions in relation to a point that is not in issue. I expect her to adopt David’s Pannick QC’s formulation.

So where does this leave the High Court – which obviously does consider that it needs to decide the question?

You won’t have noticed but I observed (above) that the question whether an Article 50 notification is reversible is a question of European law. And that has a striking consequence. Our courts may need to refer the matter to the Court of Justice of the European Union.

If it is (1) necessary for our courts to decide on the reversibility of Article 50 to answer the question before it (on whether Theresa May can trigger Article 50) and (2) the matter is not clear beyond sensible doubt, then the High Court may (indeed, the Supreme Court must) refer the matter to the Court of Justice of the European Union for an answer.

It cannot reasonably be suggested that the matter is clear beyond sensible doubt. And the High Court plainly seems to consider the matter highly relevant (although it is not yet clear that it is ‘necessary’). So a reference by the High Court must be a real live possibility (although it may be reasonable to expect a reference from the Supreme Court rather than the High Court).

Such a reference would have some important consequences.

First, there would be a very real delay in the determination of the Article 50 claim. The Rules of Procedure of the Court of Justice do contain provision for the President of the Court to direct an expedited procedure. But even were he to do so, it might be reasonable to expect (taking this as an example) a delay of three months. There would then need to be a further hearing before the High Court or Supreme Court to determine the outcome of the Article 50 claim once the Court of Justice had ruled. Theresa May’s deadline for triggering Article 50 of March 2017 would inevitably be breached.

Second, there will be some media excitement. Imagine the delight of our Fourth Estate at the prospect of the Court of Justice playing a part in determining the mechanics of our decision to leave the European Union.

Each of these consequences will be viewed with some caution by the parties to the Article 50 litigation. But, if the High Court or Supreme Court is determined to decide the question of the reversibility of the notification we must prepare ourselves for them.

Standing back from all of this, and although I can certainly see the downsides to a reference to Luxembourg, there is an important upside too.

Each of Parliament, the Government, and the public too needs to understand the consequences of notifying under Article 50. If it is irreversible, the public should understand before notification that there can be no second referendum or Parliamentary mandate for the Brexit deal. If, on the other hand, it is reversible, Parliament and the Government should acknowledge the consequence of the lack of clarity as to what the Referendum mandate meant. That consequence is a need for a fresh mandate from Parliament or the electorate on the terms of the negotiated deal.

The Dependent Worker

The thrill of the new, of progress, the advance of technology, can cause us to misascribe to modernity that caused by quite something else. We can, for fear of appearing Canute, accept as inevitable that which can and should be resisted.

Care should be taken.

Many of these problems are evidenced in our analysis of the growth of self-employment.

It is true that technology puts the buyers and sellers of labour together with an efficiency that benefits both – indeed us all. It is true that this has made possible – and desirable – patterns of working that could not previously have existed. But it is not true that it is this alone, or even primarily, that has caused the rise in self-employment. And it is not true that the negative consequences – the creation of a class of worker living precariously on the margins – are inevitable.

Care must be taken.

Put aside those who progress crowns winners. Focus instead on those without bargaining power: the warehouse workers, secretaries, drivers, call-centre workers, the marginal trades. Those who are dependent, very often, on a single relationship. Their status as self-employed stems often not from technology but the law. The law, which creates two compelling disincentives against their employment.

The first is the tax system. As I explain here, putting £100 into the pocket of an employed worker can cost an employer £26 more than putting that same £100 into the pocket of her self-employed equivalent. This difference is profoundly important to the economics of the low margin, high volume businesses in which the precariat are engaged. If you employ a worker you cannot compete.

The second is employment law. We ask employers to provide a safety net for their employees. We ask them, very often, to bear a cost which would otherwise fall on the worker or on the state. But we impose no equivalent burden on engagers of the self-employed.

Think about that.

We use our tax system to incentivise employers to avoid providing a safety net. This – I hardly need say – makes no sense. The incentive should be exactly the other way: not to shirk a safety net. We should not through the tax system subsidise those who transfer costs to others.

But addressing it is not impossible. It requires only political will. The Conservative Party has at least two terms of Government before it. It is insulated from political risk. It should act. And here is how.

First, it must remove the tax incentive for employers to shirk the provision of the safety net. This could be done in a revenue generative fashion – by raising the tax costs of engaging the self-employed to the level of the employed. Or a revenue neutral fashion – by spending some of the tax raised from self-employment on cutting taxes for the employed. It matters not. But the playing field must be leveled.

Second, we must address when that safety net should be provided.

Presently the answer is given by a judge made test – employment or self-employment – that dates back a century or more. The test relies on a range of factors, many of which have no logical relationship to the question when we should place responsibilities on the employer. We must replace it with a statutory test that Parliament can trim to the conditions of the day.

To ask what that test should look like we need to recognise its purpose. That purpose is not to ask of a worker whether he should have a safety net: it is not a substitute for a welfare system. It is, instead, to ask of an employer whether his relationship with his workers is such that it is reasonable for him to provide one. Is the worker ‘dependent’ on the employer?

This is, it seems to me, a function of two factors: first whether the worker has the power to set his own prices and second whether the worker really is in business on his own account.

When I, as a barrister, set my prices I can include within those prices a margin to enable me to provide my own safety net: sick pay, holiday pay, a pension and so on. In those circumstances the law should not compel any other to, for example, make contributions towards my pension. But where an employer dictates the prices at which a worker works, she cannot create that margin. Indeed the logic is to ask: what minimum amount does a worker need to pay for her own safety net. Pay below this rate and the burden of providing the safety net falls upon you.

The other important factor is whether the worker is dependent upon the employer. Our law already knows of the concept of a ‘subordinate’ worker. We could replace it with a simple test based on the number of hours worked for an employer. Use a worker for that number of hours and they become dependent on you; you acquire a commensurate obligation to provide a safety net for them.

These steps would not stem the rising tide of the gig economy. They do not seek to; they recognise the benefits it brings. But they would ensure a level playing field for employers. They would ensure the less generous do not drive out the more. And they would remove the bizarre encouragement our tax system provides for business to transfer costs to the state or the individual. 

Theresa May’s mighty throw of the Dice

(A version of this piece appeared yesterday in Prospect magazine).

It is mere machinery, the proposed ‘Great’ Repeal Act. 

It moves the debate on, as Faisal Islam wittily quipped, only from ‘Brexit means Brexit’ to ‘How Brexit means Brexit’. But it leaves unanswered the What: it tells us nothing about the shape our relationship with our European neighbours will come to take.

One might, warming to this theme, come to see it as a purely technocratic exercise in advancing to today a step that would otherwise be taken tomorrow. The European Communities Act 1972 – which translates into our domestic law the rights and responsibilities we derive from the United Kingdom’s membership of the EU – would need to be repealed anyway. And the Repeal Act won’t take effect until we leave the EU. It does nothing now.

All of this is right. And yet it misses the true import of what Theresa May announced.

Writing on the Friday following the Referendum I expressed the view – one from which I have not shifted – that hopes for our remaining in the EU rest largely on how events are sequenced. 

Voters, when they entered the booth on the 23rd of June, and in their unwritten ledgers of Leaving and Staying, priced up present resentments and discounted future costs. The passing of time, ran the argument, would cause them to re-mark their concerns to reflect the reality of life outside the EU. When investment stalled, and jobs were lost, and public finances were hit, and the promised NHS savings were reversed, voters would revisit their ledgers. Public opinion would turn.

This may yet happen. And those who have fought and won the fight to Leave know it. It is this that spurs their sense of urgency. That is why we must Leave now and the consequences of acting precipitately be damned.

Only when you see the battle to Brexit in these terms can you begin to understand why Leavers have argued for exactly this solution: a Repeal Act, adopted by Parliament now, authorising a repeal of the European Communities Act later, with that later being a point in time to be determined by Executive Order. Now the result of the Referendum provides an impetus for Parliament to act. Now a narrative around the damage that would be done to democracy by ignoring the expressed will of the people might cause Parliamentarians to decontextualize the result from the circumstances in which it was obtained and the opacity of what it means. But later? Later, who knows.

So repeal now, prospectively, and place the means of delivering that repeal beyond Parliament, in the hands of the First Lord of the Treasury: the Prime Minister. Parliamentarians are amenable to the pressure of the electorate. But with her moderate flank left unprotected by an opposition party shamefully absent from the most important event in the life of our nation, the Prime Minister is accountable only to her own Conservative MPs. A future change in the tides of democratic opinion could not rescue her from the demands of her own Party.

And yet, and yet, all is not lost. The Great Repeal Act is also a mighty throw of the dice by Leavers.

There is a world – a world that at the end of last week seemed possible or even likely – in which MPs had no opportunity to vote on Brexit until it was too late. Article 50 would be triggered, negotiations would ensue, we would agree terms of separation with our EU partners, our membership of the EU would cease and then, and only as a tidying up exercise, would MPs formally be asked to repeal what had already become the empty vessel of the European Communities Act. The array of rights that it had conferred upon citizens of the United Kingdom would have dissipated already. It was this world that the Article 50 challenge – which will be heard in the High Court later this month and the Supreme Court in December – was designed to head off. Triggering Article 50 amounted to a functional repeal of the European Communities Act, ran the argument, and a member of the Executive can’t repeal an act of Parliament.

But to deliver her Great Repeal Act Theresa May will have to persuade MPs to support it. To vote for an Act they cannot know the effect of. 

It is true that the Great Repeal Act is a leap into the unknown. But to say this is to fail to do justice to quite how big a leap it is. There can hardly be an aspect of our national life that the EU does not touch upon. It is this that caused Theresa May to announce that alongside the repeal there will be a separate measure adopting as domestic law everything we currently derive from the Treaties. But even this does not do: for there is much of our law that must change when we leave: our membership of the Customs Union, our system of Value Added Tax from which we derive almost a quarter of all tax receipts, reciprocal healthcare and pension arrangements, and so on. What is to happen to all this?

So she will have to persuade MPs to support this leap into the unknown – and Peers too. If the Act takes the shape I understand it to, I believe the Salisbury Convention, which prevents the House of Lords from withholding consent to a measure promised in an election Manifesto, would not apply. And, although they are not a representative set, the members of the House of Lords I have spoken to are adamant that such an Act would not pass the Upper Chamber.

Most importantly of all is the opportunity the Great Repeal Act gives to an MP to table what a responsible Government would offer us anyway. 

The binary formulation put to the electorate in the Referendum: “Should the United Kingdom remain a member of the European Union or leave the European Union?” skated over the many parallel universes offered up during the campaign: lower and not lower immigration, inside and not inside the single market, money spent and not spent on the NHS, retained and not retained regional investment and agricultural subsidies, and so on. Without clarity as to what the question we put to the electorate meant, how can we interpret the answer they gave us?

Even if, at this early stage, MPs and Peers feel unable to resist a prospective repeal of the European Communities Act, they may be persuaded to adopt a measure that gave the electorate the chance to choose between the relationship we have with the EU, and that which our Three Brexiteers manage to negotiate for us. A referendum on that deal: that would be what taking back control from an unelected Executive really looked like.