U.K. Government Loses Brexit Appeal: What the Delay in Exiting EU Means for Music

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A general view shows the House of Lords chamber in session at the Houses of Parliament in London. 

The U.K.'s top judges have ruled that the British government cannot start the process of Brexit without the prior approval of Parliament, potentially holding up its exit from the European Union.  

The landmark verdict follows a legal challenge by a campaign group led by investment manager Gina Miller, which argued that British Prime Minister Theresa May could not trigger Article 50 of the Lisbon Treaty – formally inaugurating the Brexit negotiation process - without Parliament's consent. 

In November, Lord Chief Justice John Thomas, the most senior judge in the U.K., ruled in the group's favour with today's Supreme Court hearing rejecting the government's appeal by a majority of eight to three. 

"The referendum is of great political significance, but the Act of Parliament which established it did not say what should happen as a result. So any change in the law to give effect to the referendum must be made in the only way permitted by the U.K. constitution, namely by an Act of Parliament," said Supreme Court President Lord Neuberger, reading out the judgement. "To proceed otherwise would be a breach of settled constitutional principles stretching back many centuries."

The ruling means that MPs must be given a vote on triggering Article 50, although a Downing Street spokesperson said that the judgement would not derail its plans to begin Brexit negotiations by the end of March.   

Speaking outside the Supreme Court, Attorney General Jeremy Wright said the Government was "disappointed" with the outcome, but would "comply with the judgement of the court and do all that is necessary to implement it."

Supreme Court judges also determined that the government does not have to consult with Scottish Parliament and Welsh and Northern Ireland assemblies when it begins the unprecedented step of exiting the EU. Once Article 50 is triggered a country has two years to leave the European Union, although many people believe it will take far longer. The United Kingdom is the first country to exit the EU since its formation in 1993 and follows last year's historic referendum, which saw 52 percent of the country vote to leave.

As previously reported, the potential implications of Brexit on the music business vary from higher trade tariffs to visa restrictions on British acts touring Europe to the mooted reintroduction of 'carnets' -- customs documents that require the listing of every piece of equipment included in a touring production. With the vast majority of vinyl and CDs sold in the U.K. manufactured in European countries, wholesale prices for physical product could also rise as a result of the U.K. leaving the European single market, with any increase in import levies likely to cut into record company's profits.

In a post-Brexit world, British artists and rights holders would also not be bound by any legislation introduced by the European Parliament, including last year's draft proposals to make user-generated services like YouTube pay more to rights holders and better police infringement.

Even before Article 50 is triggered, the sharp depreciation of the pound following the vote Brexit is already having a costly impact. Earlier this month, Apple announced that it would be raising prices on its U.K. App store by almost 25 percent due to the weakness of the pound sterling to the U.S. dollar. Following today's Supreme Court's judgement, the pound once again fell in value, before slightly recovering.

"The Supreme Court's decision today causes a delay to the Government's Brexit timeline and depending on the Government's drafting of the Bill, further delay may follow if the Bill is subject to amendments by legislators," Sachin Premnath, Partner in the Entertainment and Media Industry Group of Reed Smith, tells Billboard

He says that the judgement "opens the door for the U.K. music industry to continue to lobby in order to represent its best interests" and that the industry will be focused on "ensuring Brexit does not result in any punitive trade tariffs for U.K.-based music businesses, continues to allow EU workers to operate in the U.K., and allows artists and other contributors in the industry to create content and disseminate it around the world."

"Leaving the EU is clearly a very important issue for the music industry in the U.K. and we are consulting widely among our member organisations to focus on the threats and opportunities presented by leaving the European Union to ensure these are articulated to the Government so it can get the best possible deal," a spokesperson for umbrella organization UK Music tells Billboard.


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