United Kingdom Internal Market Act 2020
The United Kingdom Internal Market Act 2020 is an act of the Parliament of the United Kingdom passed in December 2020. It is concerned with trade within the UK, as the UK is no longer subject to EU regulations. The act seeks to prevent internal trade barriers among the four constituent countries of the United Kingdom, and to restrict the way that certain legislative powers of the devolved administrations can operate in practice.
|Act of Parliament|
|Long title||An Act to make provision in connection with the internal market for goods and services in the United Kingdom (including provision about the recognition of professional and other qualifications); to make provision in connection with provisions of the Northern Ireland Protocol relating to trade and state aid; to authorise the provision of financial assistance by Ministers of the Crown in connection with economic development, infrastructure, culture, sport and educational or training activities and exchanges; to make regulation of the provision of distortive or harmful subsidies a reserved or excepted matter; and for connected purposes.|
|Citation||2020 c. 27|
|Introduced by||Alok Sharma, Secretary of State for Business, Energy and Industrial Strategy ( )|
Martin Callanan, Parliamentary Under-Secretary of State for Climate Change and Corporate Responsibility ( )
|Territorial extent||England and Wales, Scotland, and Northern Ireland|
|Royal assent||17 December 2020|
|Commencement||31 December 2020 23:00|
Status: Current legislation
|History of passage through Parliament|
|Text of statute as originally enacted|
The UK Government has stated that the legislation's intended purpose is to guarantee the continued seamless functioning of the UK's internal market, and to enshrine in law principles to ensure regulations from one part of the UK are recognised across the country. The Scottish Government has stated that the legislation is additionally intended to authorise financial assistance by UK government ministers on devolved matters, and reserve devolved powers relating to subsidy control. They said that the intent of the bill was a "power grab", and in a report published in March 2021 said that the act is "radically undermining the powers and democratic accountability of the Scottish Parliament."
While it was before parliament, the Conservative MP and Minister for the Cabinet Office, Michael Gove, described the bill as a measure to preserve the territorial integrity of the United Kingdom. The devolved administrations criticised the bill for its re-centralisation of control over commerce, reversing the devolution of power in the United Kingdom.
The bill was rejected a number of times by the House of Lords. Eventually, the UK government made changes to make it more flexible, and also withdrew some provisions in Part 5 (relating to the Northern Ireland Protocol to the Brexit withdrawal agreement) that attracted controversy regarding their impact on the rule of law. The act was given Royal Assent on 17 December 2020, some two weeks before the United Kingdom formally left the European Single Market.
The Welsh Government sought a judicial review of the legislation. In a hearing in April 2021, two High Court judges refused permission for a full hearing, ruling that the claim was premature in the absence of specific circumstances giving rise to the arguments raised by the Welsh Government.
The United Kingdom joined the European Communities (EC) in 1973. In 1987, the Single European Act, a treaty amendment that sought to increase the European integration and establish an internal market, entered into force. This internal market, known as the European Single Market, was established by 1993, the same year that the EEC and related organisations were reformed into the European Union (EU).
While a member of the EU and thus part of the European Single Market, the United Kingdom helped develop and was subject to common EU-wide rules on a number of policy areas, aimed at harmonising rules and removing trade barriers between the member states. These rules governed UK trade during a period when regulatory powers became devolved in the UK and the Good Friday Agreement on the Northern Ireland peace process was reached.
According to estimates published by the European Commission, more than half of Scotland, Wales and Northern Ireland's trade is with the other parts of the UK, in both exports and imports. The majority of England's trade is outside the UK, but the rest of the UK still accounts for more than 10% of its imports and exports.
In a 2016 referendum, the United Kingdom voted to leave the European Union, colloquially known as Brexit. After lengthy negotiations, it left on 1 February 2020, but under the agreed withdrawal agreement it remained a part of the European Single Market until the end of a transition period lasting until 31 December 2020.
When the transition period ended on 31 December 2020, authority over a number of policy areas held by the EU reverted to the UK. Of these the UK government identified, in an April 2020 analysis, 154 policy areas that intersect with devolved competence.
Article 6 of the Northern Ireland Protocol, included in the withdrawal agreement in October 2019, includes reference to the notion of United Kingdom's internal market:
Having regard to Northern Ireland's integral place in the United Kingdom's internal market, the Union and the United Kingdom shall use their best endeavours to facilitate the trade between Northern Ireland and other parts of the United Kingdom, in accordance with applicable legislation and taking into account their respective regulatory regimes as well as the implementation thereof. The Joint Committee shall keep the application of this paragraph under constant review and shall adopt appropriate recommendations with a view to avoiding controls at the ports and airports of Northern Ireland to the extent possible.— Article 6: Protection of the UK internal market
In October 2016, following the first meeting of the Joint Ministerial Committee for two years (and its first following the EU membership referendum), Downing Street announced the formation of a Joint Ministerial Committee on EU Negotiations (to be known as “JMC(EN)”). As well as working collaboratively on the EU negotiations, its terms of reference include "issues stemming from the negotiation process which may impact upon or have consequences for the UK Government, the Scottish Government, the Welsh Government or the Northern Ireland Executive". At its meeting in October 2017, the JMC(EN) discussed the progress being made on consideration of common frameworks and agreed the principles that will underpin that work. A key function of the common frameworks, agreed at the meeting, is to:
enable the functioning of the UK internal market, while acknowledging policy divergence
The common frameworks are a mechanism for the UK and devolved governments to mutually agree some amount of regulatory consistency for policy areas where returning EU powers are within devolved competence. They are sector-specific and jointly agreed between the UK government and the devolved administrations.
The amendments in the enacted version of the European Union (Withdrawal) Act 2018 put in place the presumption that retained EU law, in areas of devolved competence, will remain within the remit of the devolved legislatures. That legislation allows the UK government to restrict devolved competence by way of regulations, but puts the onus on Whitehall to specify particular powers it intends to protect from modification.
In that context, the common frameworks process led to a long-running disagreement between the UK government and the devolved governments. This was particularly focused on what would happen where a common framework agreement could not be reached. The UK government argued that in such an instance they should be able to decide on regulations unilaterally for the UK as a whole. The Scottish government rejected this argument. There was dispute over whether the devolved administrations should merely be consulted on proposed legislative changes, or that such changes should require their consent.
Publication of the bill
Following the 2019 UK election, the UK Government said in the queen's speech, in a part titled "The Union", that they intended to "maintain and strengthen" the UK's internal market following Brexit. An analysis published by the Cabinet Office in April 2020 pointed at 18 areas where legislation might be needed for a common framework, 22 areas where agreements with the devolved legislatures were believed to be sufficient (in addition to adjustments to retained EU law), and 115 areas where there were no plans for common frameworks. Certain areas of regulatory policy, including data and consumer protection, product standards and product safety (but not food or pesticides) are reserved in the devolution settlement.
On 16 July 2020, the UK Government published its white paper for the bill, which it said would guarantee the continued seamless functioning of the UK's internal market, and enshrine in law principles to ensure regulations from one part of the UK are recognised across the country. The government started a consultation on the UK internal market white paper, which ran for four weeks and finished on 13 August. The UK government also stated that the legislation and related common frameworks were a "power surge" for the devolved administrations. This notion is contradicted by the vast majority of analysis by legal scholars published on the issue, as well as by the House of Lords Select Committee on the Constitution. In reality the legislation significantly constrains devolved competences both legally and practically. Both the Welsh and Scottish governments referred to the legislation as a "power grab".
On 9 September 2020, the government published the bill. The bill explicitly included provisions that were incompatible with the Withdrawal Agreement and thus, as the government acknowledges, illegal under international law. In a written statement published on 10 September 2020, the government cited the 2017 decision of the Supreme Court in R (Miller) v Secretary of State for Exiting the European Union as supporting the government's position that "Parliament is sovereign as a matter of domestic law and can pass legislation which is in breach of the UK’s Treaty obligations."
The bill put the reservation to Westminster of the power to regulate state aid into primary legislation. It also gave UK Government formal spending powers in areas of devolved competence. This provision gives the UK Government the power to fund projects directly without the involvement of the devolved administrations.
Labour, Liberal Democrats, Scottish National Party and Plaid Cyrmu all opposed the bill in parliament. The Democratic Unionist Party of Northern Ireland was generally supportive, however Sinn Fein, the Social Democrat and Labour Party, and the Alliance Party all heavily criticised the original part of the bill that would have allowed the Northern Ireland Secretary of State to break the Northern Ireland Protocol.
Shortly after the bill was published there were several resignations due to its content. On 8 September 2020, Jonathan Jones resigned his job as head of the Government Legal Department owing to concerns about "the legal implications of Britain's failure to secure a post-Brexit trade deal with the EU". On 14 September, Rehman Chishti resigned his position as the Prime Minister's Special Envoy for Freedom of Religion or Belief, noting in his resignation letter that "I can't support [the] Internal Market Bill in its current form, which unilaterally break UK's legal commitments." On 16 September, Richard Keen, Baron Keen of Elie resigned his position as Advocate General for Scotland citing concerns arising from the UK Internal Market Bill, noting in his resignation letter to Boris Johnson that he found it "increasingly difficult to reconcile what I consider to be my obligations as a Law Officer with your policy intentions". On 18 September, barrister Amal Clooney resigned as the UK's special envoy on media freedom, noting in her resignation letter that "it is lamentable for the UK to be speaking of its intention to violate an international treaty signed by the prime minister less than a year ago."
Part 5 of the bill: Northern Ireland protocol
Some provisions in Part 5 of the bill, clauses 40 to 45, caused considerable controversy both in the UK and internationally. There were concerns about their impact on the rule of law. The UK government ultimately withdrew them before enactment.
Brandon Lewis, Secretary of State for Northern Ireland, told the House of Commons that the bill would "break international law in a specific and limited way", by overriding article four of the Brexit withdrawal agreement; specifically by modifying the movement, sale, certification, and oversight of products in Northern Ireland. The government said that the decision to do so was prompted by potential bans on the sale of GB agri-food products in Northern Ireland, should trade negotiations with the European Union fail. The bill was criticised by the European Union for similar reasons.
The Attorney General Suella Braverman stated the UK Government’s legal position about the possible impact of the Bill on the Northern Ireland Protocol:
It is an established principle of international law that a state is obliged to discharge its treaty obligations in good faith. This is, and will remain, the key principle in informing the UK’s approach to international relations. However, in the difficult and highly exceptional circumstances in which we find ourselves, it is important to remember the fundamental principle of Parliamentary sovereignty. ¶ Parliament is sovereign as a matter of domestic law and can pass legislation which is in breach of the UK’s Treaty obligations. Parliament would not be acting unconstitutionally in enacting such legislation. This ‘dualist’ approach is shared by other, similar legal systems […].
Senior members of the bar and the judiciary, including the former President of the Supreme Court, David Neuberger, criticised the clause that would prevent any judicial review of its operation. Lord Neuberger indicated that in a situation where the right to challenge the government in court is removed, "you are in a dictatorship, you are in a tyranny".
On 8 December 2020, Chancellor Michael Gove and European Union Vice-President of the European Commission for Interinstitutional Relations, Maroš Šefčovič, reached an 'agreement in principle' by which the UK government withdrew some provisions in Part 5 of the bill.
Provisions in part 5
Section 46 (originally clause 40) provides that UK government ministers, devolved government ministers and anybody else exercising a function of public nature, when exercising a function relating to the protocol or the movement of goods within the UK, must have special regard for Northern Ireland’s place in the UK internal market and customs territory and the need for a free flow of goods between Great Britain and Northern Ireland.
Section 47 (clause 41) provides that UK government ministers, devolved government ministers and anybody else exercising a function of public nature, must not exercise a function that would result in any new Northern Ireland-Great Britain check, control or administrative process in some circumstances after the transition period ends.
Sections 48 and 49 (clauses 43 and 44) empowers only the Secretary of State to comply with state aid requirements in the protocol to give the European Commission a notification or information relating to state aid and to make secondary legislation in relation to state aid in the protocol.
The UK government withdrew clauses 42 and 45 before enactment. Clause 42 would have empowered ministers to make secondary legislation about the application of exit procedures or a description of goods moving from Northern Ireland to Great Britain. Clause 45 would have provided such secondary legislation to have effect, irrespective of whether it was incompatible or inconsistent with domestic or international law.
Passage through parliament
On 15 September, the bill passed its second reading in the House of Commons, by 340 MPs to 263 MPs, following a failed amendment to not hold a second reading proposed by Labour party leader Keir Starmer. In total, out of 364 Conservative MPs, 328 voted in favour of the bill at its second reading and two voted against.
On 29 September, the bill passed its third reading in the House of Commons by 340 votes to 256, and went to the House of Lords for consideration and review. Earlier in the day, a new clause that would require "ministers to respect the rule of law and uphold the independence of the courts" was voted down 256 to 350, those voting against being from Conservative and Democratic Unionist parties.
In December, after multiple defeats in the House of Lords, the UK government made changes which they said would allow a certain amount of divergence from the internal market rules for the devolved administrations, where these were agreed through the common frameworks. It also allowed the Lords to remove those provisions of the Bill that were in breach of international law. The act received royal assent on 17 December, and came into force on 31 December.
The UK government did not seek legislative consent from the devolved legislatures. However the Scottish Parliament still held a consent vote, where consent was denied. This was only the second act after the EU Withdrawal Act 2020 where the Scottish Parliament has withheld consent since the Parliament was established in 1998.
Developments after enactment
In January 2021, the Counsel General for Wales, Jeremy Miles, announced the Welsh Government would seek judicial review of the legislation. The Welsh Government argued that it would curtail the power of the Senedd, the devolved legislature in Wales. The UK government argued the Act did not alter devolved competences. In a hearing in April 2021, two judges of the High Court of Justice ruled that the judicial review could not proceed "in the absence of specific circumstances giving rise to the arguments raised by the claimant and a specific legislative context in which to test and assess those arguments."
Mutual recognition and non-discrimination principles
The act aims at preventing trade barriers arising within the United Kingdom as a consequence of leaving the European Union; this hinges on the two principles of mutual recognition and non-discrimination.
While the act continues to allow devolved government to set its own regulations, the mutual recognition principle disapplies these rules to goods and services from other parts of the UK, ensuring that when goods and services can be legally sold in one part of the UK, they can legally be sold in all other parts too.
The principle of non-discrimination forbids devolved governments from enacting regulations that discriminate between goods produced in, and services provided from, other parts of the UK. This includes both direct discrimination, and indirect discrimination that puts products and services from other parts of the UK at a disadvantage, compared to local products and services. Some service categories are explicitly exempted – these include broadcasting, financial services and postal services.
The act also ensures that professional qualifications in from one part of the UK are automatically recognised in all other parts; this means that people are free to move to other parts, while not having to re-qualify. Some exceptions apply, including when there is a process in place for having one's qualifications recognised (i.e. not automatically).
Office of the Internal Market
The legislation establishes an Office of the Internal Market (OIM) within the Competition and Markets Authority. The objective of the OIM is monitor the UK internal market and report on any problems. It can instigate such investigations into issues itself, or at the behest of the UK government or one of the devolved administrations. It also required representation of Scotland, Wales and Northern Ireland on the board of the CMA.
The act makes regulating subsidy (but not the granting of subsidy) a matter reserved for the UK government, something the UK government argue it already was, whereas the Scottish and Welsh government argue it was devolved. This regulation had previously been done by the EU (see State aid (European Union)). The UK government had stated there will be no system put in place, beyond the WTO requirements. The government will publish guidance on how to comply with these requirements. However, the statement also notes that the government will publish a consultation on whether it should go further than its international commitments. This implies that in the future the government will consider stronger obligations – though it is not clear whether this amount to anything like the obligations of state aid.
Effect on devolution
The act has a number of effects on the constitutional arrangements regarding devolved legislative powers. Principal amongst these is the effect that the market access principles will have on the practical ability of the devolved administrations to regulate economic activity. It also expressly reserves the regulation of distortive or harmful subsidies to the UK Government, and gives them spending powers in numerous policymaking areas. These powers risk undermining the authority of the devolved institutions to determine infrastructure priorities within their respective jurisdiction.
The UK government argues that the market access principles do not affect the powers of the devolved legislatures and governments. However, while the powers remain similar "on paper", the principles undermine devolved competences in two ways. These relate to its status as a protected enactment, and to the disproportionate market size and power of the economy under English jurisdiction. Because the devolved governments will be unable to disapply the market access principles, if they attempt to introduce new or stricter regulatory standards, they will only apply to goods produced within the devolved jurisdiction. This means that these standards will have little or no practical effect other than to disadvantage their own economy, severely restricting their ability to introduce regulatory divergence, or pursue different economic or social choices to those made in Westminster.
In an editorial in January 2021 concerning rising support for Scottish independence and its potential to break up the union, the Financial Times indicated that the Internal Market Act was an inappropriate response:
An example of what not to do was the government’s Internal Market Act, in which London retook control of structural funds previously disbursed by the EU.
Responses in the UK
The Scottish and Welsh governments criticised the bill for its re-centralisation of control over commerce, which they see as reversing the devolution of power in the United Kingdom. The SNP have stated "The Tory power grab bill represents the biggest threat to devolution in decades, and would enable Westminster to overrule the democratic will of the Scottish Parliament". The UK government disputes the devolved administrations' interpretation saying it is instead a power surge for devolution.
In Northern Ireland, First Minister Arlene Foster said Northern Ireland businesses need "unfettered access" to the market in Britain along with guarantees they would not be discriminated against. Foster said that "it was 'important' that Northern Ireland has unfettered access to the rest of the U.K." but that the issue was a "matter for the ministers in Whitehall and in Westminster". Christopher Stalford, a DUP assembly-member for South Belfast said in Stormont on 14 September 2020 that "there is great rejoicing over one sinner that repents" – a biblical reference to Johnson's proposed change of heart on the Northern Ireland Protocol.
Deputy First Minister Michelle O'Neill has said that "Brandon Lewis and the entire British cabinet do not care about what happens to us in the north. They have demonstrated that time and time again they are prepared to use us here in the north as a pawn in the Brexit negotiations – this is an international agreement which was painstakingly struck after months of negotiations." O'Neill said the Withdrawal Agreement protects the Good Friday Agreement and it was "astounding" the UK government "thinks it's fine" to wreck an international treaty they had signed up to.
The DUP's chief whip at Westminster, Sammy Wilson, is quoted as saying to BBC Radio Ulster that he would "reserve judgement" until he saw the bill in full, but that the "Northern Ireland question was back on the agenda".
The Scottish Government rejected the UK government's internal market plans since first proposed in July 2020, with the First Minister of Scotland Nicola Sturgeon quoted as saying that the plans are "riding roughshod over the powers of the Scottish parliament". It did not rule out legal action. Sturgeon described the bill as "an abomination which would cripple devolution" and that "the UK government are not only set to break international law – it is clear they are now set to break devolution". She tweeted on 9 September 2020 that it is a "full frontal assault on devolution" and later said it was an "abomination on almost every level".
The SNP's Westminster Leader Ian Blackford said to Boris Johnson during Prime Minister's Questions on 9 September 2020 that he was "creating a rogue state where the rule of law does not apply" and that "the time for Scotland's place as an independent, international, law-abiding nation is almost here". Former acting Scottish Labour leader Alex Rowley has described it as "a farce that threatens the very foundations of the United Kingdom".
On 7 October 2020, the Scottish Parliament voted 90 to 28 to refuse legislative consent.
The Welsh Government has described it as "an attack on democracy and an affront to the people of Wales, Scotland and Northern Ireland" and accused Westminster of "stealing powers".
First Minister of Wales, Mark Drakeford, called the UK internal market plans a "power grab". He said it represented a "smash and grab" on the devolved governments and takes back powers that have been devolved to Wales, Northern Ireland and Scotland for 20 years. Plaid Cymru leader, Adam Price, said that the bill signifies "the destruction of two decades of devolution".
The Welsh Government minister and Counsel General, Jeremy Miles, is quoted as saying on 8 September 2020 that "the U.K. government plans to sacrifice the future of the union by stealing powers from devolved administrations ... the bill is an attack on democracy."
Members of the Commons and the Lords, on both sides of the Houses, expressed their concern at those clauses of the bill that would seek to set aside unilaterally the Northern Ireland protocol of the UK's withdrawal agreement. With the Lords ultimately making successful amendments to remove Part 5 of the bill.
The bill drew criticism from all five living former prime ministers: John Major, Tony Blair, Gordon Brown, David Cameron, and Theresa May. May said that "the United Kingdom government signed the withdrawal agreement with the Northern Ireland Protocol. This Parliament voted that withdrawal agreement into UK legislation. The government is now changing the operation of that agreement. How can the government reassure future international partners that the UK can be trusted to abide by the legal obligations of the agreements it signs?" John Major said "For generations, Britain's word – solemnly given – has been accepted by friend and foe. Our signature on any treaty or agreement has been sacrosanct. If we lose our reputation for honouring the promises we make, we will have lost something beyond price that may never be regained."
Another former Conservative leader, Michael Howard, has said "Does [the minister] not understand the damage done to our reputation for probity and respect for the rule of law by those five words uttered by his ministerial colleague in another place on Tuesday – words that I never thought I would hear uttered by a British minister, far less a Conservative minister. How can we reproach Russia or China or Iran when their conduct falls below internationally accepted standards when we are showing such scant regard for our treaty obligations?"
Conservative MP Roger Gale said he would not support the bill: "put simply, I will not vote to break the law". Similarly, former Attorney General Geoffrey Cox and former Chancellor of the Exchequer Sajid Javid, who both, until February 2020, served in Johnson's government and are both Conservative MPs, have also said that they cannot support the bill.
Nonetheless, the government did not have any resignations over the bill, including by the Lord Chancellor or the Attorney General, whose roles have a special focus on the rule of law. Neither has the Conservative Party seen any of its MPs leave the party over the bill yet.
Conservative MP William Cash has spoken positively of the bill in the House of Commons, concluding: "The Bill is needed as an insurance policy and as a guarantee of our national sovereignty within the meaning of the Vienna convention, and our national security."
On 20 October 2020, while moving to the second reading of the bill, the House of Lords voted 395 against 169 approving the motion of regret "that Part 5 of the bill contains provisions which, if enacted, would undermine the rule of law and damage the reputation of the United Kingdom", an amendment proposed by Lord Judge, former Lord Chief Justice. The vote over this amendment was the biggest defeat (a margin of 226) for the government in the Lords since 1999. Conservative Party Lords voting against the government included the recently resigned Advocate General for Scotland, Lord Keen; former Chief of Staff to Theresa May, Gavin Barwell; former party leader Michael Howard; former Chancellors of the Exchequer, Kenneth Clarke and Norman Lamont; and former European Commissioner Christopher Tugendhat.
Former Supreme Court judge and other legal views
Once you deprive people of the right to go to court to challenge the government, you are in a dictatorship, you are in a tyranny. The right of litigants to go to court to protect their rights and ensure that the government complies with its legal obligation is fundamental to any system ... You could be going down a very slippery slope.
Former Attorney General Dominic Grieve QC, who lost his seat after his Conservative whip was removed for rebelling against Johnson in September 2019, said that this "ouster clause ... goes to the heart of parliamentary democracy", preventing the government being challenged over its actions. Former Home Secretary Michael Howard told the meeting that he was "opposed to the clauses in the bill which breach international law". Other senior barristers who stated their opposition (at an online conference arranged by the International Bar Association) included SNP MP Joanna Cherry QC, Labour peer Helena Kennedy QC, and Jessica Simor QC.
In a letter to The Financial Times on 19 October 2020, the Primates of the Anglican Communion churches of the four nations of the United Kingdom said that the bill would "create a disastrous precedent" by "equip[ping] a government minister to break international law. This has enormous moral, as well as political and legal, consequences".
The Confederation of British Industry supported the legislation, highlighting "the Bill should ensure that following the UK's exit from the EU, no new barriers to trade between England, Scotland and Wales should be established, and for the legislation to work effectively in Northern Ireland, the Bill must work in lockstep with the Northern Ireland Protocol."
The Federation of Small Businesses welcomed the principles of Mutual Recognition and non-discrimination noting that "Both principles are critical to the proper functioning of the UK Internal Market for small and micro businesses."
The British Retail Consortium's head of devolved nations said in response to the BEIS white paper "We must not lose sight of the fact that consumers and our economy as a whole benefits enormously from the UK's largely unfettered internal single market, as economies of scale and regulatory consistency helps reduce business costs which in turn keeps down shop prices and provides greater consumer choice. Increasingly differential approaches towards public policy in different parts of the UK may well offer new flexibilities, however it also risks a more fragmented environment for firms operating across the UK."
British Chambers of Commerce set out their view as follows: "a fragmented system would create additional costs, bureaucracy and supply chain challenges that could disrupt operations for firms across the UK. As these proposals progress, business communities will want practical considerations – not politics – at the heart of the debate and shaping solutions."
The National Farmers Union supported the legislation. Scottish NFU's position was more nuanced as though highlighting that the UK internal market is vital for Scottish farmers they raised concerns that the bill would damage work on common frameworks. The Ulster Farmers' Union welcomed the UK Government's initiative to put in place a legislative framework to safeguard the functioning of the UKIM
Directors want to see as much predictability and stability as possible when the Brexit transition period ends. Keeping disruption of trading arrangements to a minimum is crucial, particularly as the Withdrawal Agreement provides for unprecedented new arrangements between Great Britain and Northern Ireland. Codifying the UK Internal Market in law for continuity purposes after Brexit is an important aim, but further clarity is still needed for directors to understand the full practical operation of them. At present, EU law provides a transparent level playing field for businesses, where enforcement and dispute settlement rules are clear. Maintaining that clarity for commerce across the UK once transition ends is critical. However, directors will be wary of any moves that could increase the likelihood of no deal.
After The Financial Times had sight of the bill on 6 September and said that Government of the UK appeared intent on breaking international law, Commission President Ursula von der Leyen warned Johnson not to break international law, saying that the UK's implementation of the withdrawal agreement was a "prerequisite for any future partnership". On 1 October 2020, the European Commission sent to the UK Government "a letter of formal notice for breaching its obligations under the Withdrawal Agreement" because the latter's refusal to remove the contentious clauses in the bill. The letter marked "the first step of an infringement process".
On 9 September, Irish Taoiseach (Premier) Micheal Martin tweeted "Any negotiation process can only proceed on the basis of trust. When one party to a negotiation decides that they can change what’s already agreed and incorporated into law, it really undermines trust. This is a critical time in the #Brexit process and the stakes are very high."
The Speaker of the House of Representatives Nancy Pelosi said "if the U.K. violates that international treaty and Brexit undermines the Good Friday accord, there will be absolutely no chance of a U.S.-U.K. trade agreement passing the Congress".
During the passage of the bill Joe Biden (before being elected President) also warned he would not sign a trade deal with the UK if the Prime Minister pressed ahead with the controversial clauses of the bill regarding the Northern Ireland Protocol.
- Devolution in the United Kingdom
- United Kingdom’s internal market
- United Kingdom Common Framework Policies
- Law of the United Kingdom
- Thimont Jack, Maddy; Sargeant, Jess; Marshall, Joe; Hogarth, Raphael; Kane, James; Jones, Nick (9 September 2020). "UK Internal Market Bill". London: Institute for Government. Retrieved 17 September 2020.
- Dougan, Michael; Hayward, Katy; Hunt, Jo; McEwen, Nicola; McHarg, Aileen; Wincott, Daniel (2020). UK and the Internal Market, Devolution and the Union. Centre on Constitutional Change (Report). University of Edinburgh, University of Aberdeen. pp. 2–3. Retrieved 16 October 2020.
- Dougan, Michael (23 September 2020). Professor Michael Dougan: Evidence on the UK internal market bill. Finance and Constitution Committee (Report). Edinburgh: Scottish Parliamentary Corporate Body. 21st Meeting 2020, Session 5. Retrieved 15 October 2020.
By imposing widespread obligations of non-discrimination and, more important, mutual recognition, the bill seeks to restrict the way that devolved competences operate in practice.
- Keating, Michael (2 February 2021). "Taking back control? Brexit and the territorial constitution of the United Kingdom". Journal of European Public Policy. Abingdon: Taylor & Francis. 28: 6–7. doi:10.1080/13501763.2021.1876156. hdl:1814/70296.
The UK Internal Market Act gives ministers sweeping powers to enforce mutual recognition and non-discrimination across the four jurisdictions. Existing differences and some social and health matters are exempted but these are much less extensive than the exemptions permitted under the EU Internal Market provisions. Only after an amendment in the House of Lords, the Bill was amended to provide a weak and non-binding consent mechanism for amendments (equivalent to the Sewel Convention) to the list of exemptions. The result is that, while the devolved governments retain regulatory competences, these are undermined by the fact that goods and services originating in, or imported into, England can be marketed anywhere.
- Kenny, Michael; McEwen, Nicola (1 March 2021). "Intergovernmental Relations and the Crisis of the Union". Political Insight. SAGE Publishing. 12 (1): 12–15. doi:10.1177/20419058211000996. S2CID 232050477.
That phase of joint working was significantly damaged by the UK Internal Market Act, pushed through by the Johnson government in December 2020...the Act diminishes the authority of the devolved institutions, and was vehemently opposed by them.
- Wolffe, W James (7 April 2021). "Devolution and the Statute Book". Statute Law Review. Oxford: Oxford University Press. doi:10.1093/slr/hmab003. Retrieved 18 April 2021.
the Internal Market Bill—a Bill that contains provisions which, if enacted, would significantly constrain, both legally and as a matter of practicality, the exercise by the devolved legislatures of their legislative competence; provisions that would be significantly more restrictive of the powers of the Scottish Parliament than either EU law or Articles 4 and 6 of the Acts of the Union...The UK Parliament passed the European Union (Withdrawal Agreement) Act 2020 and the Internal Market Act 2020 notwithstanding that, in each case, all three of the devolved legislatures had withheld consent.
- Hayward, Katy (19 October 2020). "How does the UK Internal Market Bill relate to Northern Ireland?". London School of Economics. Retrieved 1 February 2021.
...although the Bill only curtails devolved competence in specific ways (e.g. by making state aid a reserved rather than a devolved matter), it will undermine the effectiveness of devolved legislation in relation to goods and services. The UK Internal Market Bill would also be a protected enactment, meaning that the devolved legislatures cannot legislate in a way that contravenes the Bill. Devolved legislatures may be able to make laws to, for example, raise standards, but because they cannot stop goods made to a lower standard from being sold in their market from elsewhere in the UK, the effect of those laws will be limited
- Lydgate, Emily (23 September 2020). Dr Emily Lydgate, University of Sussex: Evidence on the UK internal market bill. Finance and Constitution Committee (Report). Edinburgh: Scottish Parliamentary Corporate Body. 21st Meeting 2020, Session 5. Retrieved 15 October 2020.
In that context, even though the new powers might not be used, I expect that the UK Government wants the legislation to be in place before those statutory instruments come into force, in case the common frameworks fall apart. What we are seeing is the UK Government responding to a threat by trying to centralise power or create a system that will function in case there is a problem...For example, England might authorise a new active substance for pesticides, or a new GMO, and would then be able to freely export those products to devolved nations, even if they had controls domestically. In so doing, England could competitively undercut producers and in effect undermine permitted divergence.
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By introducing uncertainty over new UK Government spending powers in the devolved areas, and by limiting the ability of the devolved governments to pursue their own policy priorities, the Bill is more likely to undermine rather than strengthen the union, and creates the space for political conflict, grievance and a breakdown in inter-governmental relations.
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