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This Act gives effect to various European treaties, and allows the legislative bodies of the European Communities (now the European Union) to legislate directly for the UK. As such, it provides for the incorporation of European Community (EC) law into the domestic law of the United Kingdom.

The main significance of this Act (apart from being the instrument whereby the UK acceded to the European Union (or 'European Communities' as it was then termed) is that it enables, under section 2(2), Government ministers to lay regulations before Parliament to implement required changes to UK law (for example, Decisions of the European Court of Justice or EU Directives). It also provides, in section 2(4), that all UK legislation, including primary legislation (Parliamentary Acts) shall have effect 'subject to' directly applicable EC Law. In the famous Factortame case, the House of lords (Lord Bridge) interpreted this provision as inserting an implied clause into all UK statutes that they shall not apply where they conflict with EC law, in what was seen as a major departure from the English constitutional doctrine of Parliamentary Sovereignty. The repeal of this Act would leave EC law unenforceable in the UK, but the UK would still be bound by treaty obligations to the European Union.

See also Constitutional legislation.