Article 127: What is the obscure section of EU law - and how could it stop Brexit?

As Cabinet divisions over Brexit threaten to tear Theresa May’s Government apart, focus is turning to the obscure legislation that governs how the UK would leave the single market.

Now experts have claimed that Ms May’s plans for a hard Brexit could be scuppered by a little-known legal clause.

The small print at the heart of the debate, Article 127, is the lesser-known cousin of Article 50. Whereas Article 50 spells out how a country leaves the European Union (EU), Article 127 relates to departing the single market.

The former has already been triggered, but the latter has not – and that is where the Prime Minister's problem could lie.

It is a clause of the European Economic Area (EEA) Agreement 1993 – the document that includes the rules governing the single market.

Article 127 explains the process for a country leaving the single market.

It says: “Each Contracting Party may withdraw from this Agreement provided it gives at least twelve months' notice in writing to the other Contracting Parties.

“Immediately after the notification of the intended withdrawal, the other Contracting Parties shall convene a diplomatic conference in order to envisage the necessary modifications to bring to the Agreement.”

That’s it. But some experts say these 52 words could be enough to keep Britain in the single market - and even scupper Brexit entirely.

Britain has already triggered the Article 50 clause that sets the ball rolling on withdrawing from the European Union.

In March, Ms May wrote to Donald Tusk, the European Council President, saying: “I hereby notify the European Council in accordance with Article 50(2) of the Treaty on European Union of the United Kingdom's intention to withdraw from the European Union.”

In doing so she began a two-year process that will see Britain leave the EU in March 2019.

However, some legal experts say this is not the same as leaving the EEA (the single market), and that a separate process is needed for this to happen.

Under Article 127, members of the EEA must explicitly say they plan to leave the single market – which is legally separate, many lawyers believe, to leaving the EU.

Jo Maugham QC, director of the Good Law Project, told The Independent: “There is an argument that leaving the EU automatically triggers departure from the EAA. There’s another argument that actually it doesn’t, and you have to trigger your departure from the EEA separately.

“If the first of those is right, then the Government doesn’t need the permission of Parliament because we already announced we’re leaving the EEA when we triggered Article 50.

“But if the second argument is right, there would need to be parliamentary authorisation either through the Repeal Bill or otherwise.”

Potentially, yes. Late last year, pro-EU campaigners launched a legal bid to force the Government to consult Parliament before triggering Article 127.

High Court judges blocked that challenge because, they said, it was too early; the process of the UK leaving the single market had barely begun. However, the case is likely to be relaunched further down the line.

Depending on how the courts rule, the Government could be forced to give Parliament a vote on whether the UK should leave the single market. Under the “12 months’ notice” part of Article 127, that would mean a vote would need to be held by next March, if Britain is to leave the single market at the same time as it leaves the EU.

In that scenario, it is far from certain that Ms May would be able to get Parliament to back her plans.

While Jeremy Corbyn’s Labour Party in theory supports leaving the EEA, its commitment to this is far from clear and several shadow ministers have already touted the possibility that the UK could remain in the EEA and customs union after Brexit.

For example, Keir Starmer, the Shadow Brexit Secretary, recently said his party was “flexible” about the option of “negotiating a new single market relationship”.

That raises the possibility that, if the EU is willing to make concessions on freedom of movement, Labour could shift its position and end up backing EEA membership.

In that case, only six pro-EU Tory MPs would need to rebel in order for the Government to be defeated.

Mr Maugham said he believed MPs would be likely to support a proposal to “keep all options open” and “keep single market membership on the table for a transitional period and then adopt a wait-and-see approach for after a transitional period” – in other words, keep Britain in the single market until further notice.

Former Government insiders also believe Article 127 could prove critical and might even halt Brexit entirely if ministers are forced to give Parliament a vote on single market membership.

According to The Mirror, James Chapman, the former Chief of Staff to Brexit Secretary David Davis’, yesterday told an event at the Liberal Democrats’ annual conference: “Is there a majority in the House of Commons, let alone [the Lords] to leave the single market? No there’s not.

“So the Government won’t be able to get that through Parliament and at that point Brexit will collapse.

“Because the British people will say ‘we’ll have to pay more to stay in the single market and we won’t be able to control freedom of movement. So what is the effing point of doing this?’”

Ministers say Article 127 is irrelevant because when Britain stops being an EU member, it will automatically leave the single market.

In February, a Number 10 spokesperson said: "The UK is party to the EEA agreement only in its capacity as an EU member state. Once the UK leaves the EU, the EEA agreement will automatically cease to apply to the UK.”

However, the Government’s position appears to have shifted slightly. Earlier this month, David Davis hinted that ministers might try to trigger Article 127 to avoid any doubt about Britain’s legal position in relation to the EEA.

He told MPs: “We are considering what steps, if any, we might need to take to formally confirm our withdrawal from the EEA agreement, as a matter of international law.”

And, let’s not forget, Government lawyers don’t have the best track record on Brexit. They previously claimed that Parliament did not need to be given a say on triggering Article 50 – an argument that was dismissed by both the High Court and the Supreme Court.

Interestingly, Theresa May’s Article 50 letter included an explicit – and separate - reference to the UK’s intention to leave the European Atomic Energy Community (Euratom). That could be interpreted as an implicit recognition that leaving the EU’s institutions requires a separate notification – one that might also apply to the EEA.

The Government may continue to argue that Article 127 is irrelevant, or it may try to trigger the clause without the approval of Parliament. Clauses in the EU Withdrawal Bill, which is currently before Parliament, would grant ministers that power.

However, MPs are prepared for this.

Labour backbencher Heidi Alexander has already tabled an amendment to the bill that says: “No Minister may, under this Act, notify the withdrawal of the United Kingdom from the EEA Agreement, whether under Article 127 of that Agreement or otherwise.”

If this or any similar amendment is passed, ministers would be forced to call a vote of Parliament on triggering Article 127 – like they were with Article 50.

As things stand, the battle seems set to end up in the courts. If ministers attempt to ignore Article 127 or to trigger it without a parliamentary vote, Remain campaigners are almost certain to re-launch their legal challenge.

Should this happen, Theresa May would face the prospect of her most significant parliamentary defeat yet and, when it comes to determining Britain’s future relationship with Europe, one that could have major ramifications for decades to come.