Internal Market Bill and devo

Prof Michael Dougan, University of Liverpool: Briefing Paper on UK Internal Market Bill & Devolution Some key lessons to draw about the UKIM proposals

20.The fact that the Bill’s principles are largely prospective but will apply to new rules as well as existing rules which are amended in any substantive way creates a significant disincentive to engage in legal reform or regulatory innovation.

21.Where the Bill does apply, its rules are based on a strong market dynamic: they have a wide scope of application, provide strict guarantees of market access capable of overriding / bypassing local regulatory choices, and offer only limited opportunities for exclusionor justification.

22.Even in the best of circumstances, the proposed UKIM rules would generate significant deregulatory pressures –making it much more difficult for one territory to choose / justify / enforce stricter levels of public regulation, in any situation where another territory follows more lax standards.

23.But in the particular context of the UK economy, the Bill’s principles and resultant pressures will simply not operate in a neutral manner across the constituent territories.Taming England’s relative size and power would challenge any internal market system. Instead, the Bill’s planned regime would positively magnify England’s inherent advantages yet further and risk rendering the exercise of many devolved powers redundant in practice. After all: English choices would be able to produce their full effects within Scotland and Wales, on a scale that could simply overwhelm the latter’s own preferences.  

24.Moreover, the Bill also needs to be viewed within its wider regulatory and constitutional context. Unlike the EU system: there are no guarantees that the UKIM will operate according to certain minimum common standards in fields such as health, environment, consumer and employment protection.  Indeed, the Bill is explicit that a good marketed in England even in the total absence of any relevant public interest regulation, is still entitled to benefit from the principle of mutual recognition when it comes to sale or supply in Scotland.  And again unlike the EU system: there is no attempt to combine the new UKIM principles with reforms to the UK’s overall governance structures, e.g. so as to create more independent and impartial forafor decision-making and dispute resolution between the constituent territories.  Conversely, the conferral of direct legal enforceability upon the core market access principles contained in the Bill can only serve to render its potential impacts and problems even more potent in practice –certainly compared to a system wherein the management of internal trade barriers might indeed be reserved to a system of inter-institutional dialogue and dispute resolution. 

25.So on paper, devolution might continue to look the same. Indeed, it might even look more extensive (as the UK Government has repeatedly promised after Brexit). But in practice, the operation of the UKIM has real potential to limit the capacity of the devolved institutions to pursue different economic or social choices from those made in London.

Read the whole paper here

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