The UK Government claims that its Internal Market Bill (IMB), which replaces the EU Single Market across the UK, will give new powers to devolved nations after the end of the transition period, while the devolved governments in Scotland and Wales regard it as a power grab. Who’s right? asks Vanessa Glynn
1. What is the IMB for?
All UK administrations accept the need for a framework to replace the rules of the EU Single Market to allow trade to take place in a free and orderly way across the UK. The IMB being rushed into law establishes ‘market access principles’ – mutual recognition and non-discrimination, designed to ensure that goods legally produced or for sale in one part of UK are permitted to be sold anywhere else in UK.
2. That sounds sensible, then?
As the White Paper that preceded the Bill demonstrated, economic activity across the UK is already relatively frictionless. Moreover, there is no urgency about introducing internal market rules. In itself, the end of the transition period will not immediately throw up new internal economic barriers. The devolved nations want new arrangements to be agreed between all administrations, not imposed by Westminster through the IMB. All the devolved legislatures have voted against the IMB as it stands.
3. What don’t they like?
The market access principles restrict the devolved authorities’ capacity to regulate. IMB allows the UK government to determine what standards will apply eg. whether meat treated with chemicals or GM foods can be put into our food chain. It even extends to giving the UK government powers to opine on Scotland’s building standards and setting of university fees. Frictionless economic exchange overrides all other aims of public policy.
4. Didn’t the EU Single Market restrict devolved rules anyway?
The UK Bill includes a much more restricted set of public policy justifications for exemptions from the market access principles than is permitted under EU law.
It is doubtful that Scotland’s Minimum Pricing of Alcohol, judged acceptable to EU for public health, would be permitted by this new law. The charging of university fees to UK students not resident in Scotland may also be judged discriminatory.
5. Will the Bill ensure high regulatory standards?
The Bill contains no provisions to guarantee high regulatory standards. Instead, it provides scope for businesses to sell products in a part of the UK that do not meet the standards set by the government in that part. The Bill may also create incentives for governments to compete for business by lowering the standards they require of goods and services produced in their territory. It is a charter for deregulation across the UK, with rules decided by Westminster
6. Will the Bill promote cooperation and trust between governments?
The substance of the Bill and the manner of its introduction have reduced relations between the Scottish and Welsh Governments on the one hand, and the UK Government on the other, to the worst level we have known. Even a House of Lords Committee has criticised the bill for its assault on devolution. Since the start of devolution, the UK’s approach to intergovernmental relations has been underdeveloped and fragile. There is an urgent need for new institutions and practices in this area. But, far from paving the way for building them up, the Bill has set back the prospects for these new developments.
(This EMiS article draws on work of the Centre on Constitutional Change.)