Main Menu

New legislation

Internal market bill opens up new border divisions

Alok Sharma

Alok Sharma: providing clarity

Westminster and Holyrood are set for renewed clashes over the Brexit deal as a new Bill is published setting out rules for trading within the UK.

The UK government says the Internal Market Bill will protect jobs and trade across the whole of the United Kingdom after the Transition Period ends on 31 December.

However, the permanent secretary to the Government Legal Department, Sir Jonathan Jones, has resigned in protest.

Sir Jonathan, the government’s most senior lawyer, is understood to believe the bill breached the government’s obligations under international law.

In the Commons on Tuesday, Northern Ireland Secretary Brandon Lewis admitted the bill would break international law in a “very specific and limited way”.

Opposition parties, particularly the SNP, claim that it undermines the devolution settlement and amounts to a power grab. 

Scottish Constitution Secretary Michael Russell said: “It beggars belief that the UK Government is asking the Scottish Government to recommend consent to the Internal Market Bill.

Follow Daily Business on LinkedIn

“This is not a genuine partnership of equals and we couldn’t recommend consent to a Bill that undermines devolution and the Scottish Parliament, and which, by the UK Government’s own admission, is going to break international law.

“This is a shabby blueprint that will open the door to bad trade deals and unleashes an assault on devolution the like we have not experienced since the Scottish Parliament was established. We cannot, and will not, allow that to happen.”

The Department of Business, Energy and Industrial Strategy says it will establish world-leading high standards for consumers, workers, food, animal welfare and the environment.  

From 1 January 2021, powers in a range policy areas previously exercised at an EU level will flow directly to the devolved administrations in Holyrood, Cardiff Bay and Stormont for the first time.

The UK Government has also laid out plans to establish an independent monitoring body, the Office for the Internal Market (OIM), to support the smooth running of trade within the United Kingdom.

Michael Russell

Michael Russell: ‘we will not allow it to happen’ (pic: Terry Murden)

The body will sit within the Competition and Markets Authority (CMA) and provide independent, technical advice to parliament and the devolved administrations on regulation that may damage the UK’s internal market.

In a statement the UK government said: “This will give the devolved legislatures power over more issues than they have ever had before, including over air quality, energy efficiency of buildings and elements of employment law, without removing any of their current powers.

“Once the Transition Period ends, rules that have regulated how each home nation trades with each other over the past 45 years will fall away.

“Without urgent legislation to preserve the status quo of seamless internal trade, rules and regulations set in Scotland, England, Wales and Northern Ireland could create new barriers to trade between different parts of the UK, unnecessary red tape for business and additional costs for consumers.

“Today’s Bill will avoid this uncertainty for business by creating an open, fair, and competitive market across the United Kingdom, ensuring regulations from one part of the country will be recognised in another.

Follow Daily Business on Facebook

“Each devolved administration will still be able to set their own standards as they do now, while also being able to benefit from the trade of businesses based anywhere in the UK.  The rules in this bill will also bind the UK Government when acting on behalf of England in areas of devolved competence.  

Business Secretary Alok Sharma said: “For centuries the UK’s internal market has been the cornerstone of our shared prosperity, delivering unparalleled stability and economic growth across the Union.

“Today’s Bill will protect our highly integrated market by guaranteeing that companies can continue to trade unhindered in every part of the UK after the Transition Period ends and EU law falls away.

“By providing clarity over rules that will govern the UK economy after we take back control of our money and laws, we can increase investment and create new jobs across the United Kingdom, while our maintaining world-leading standards for consumers, workers, food and the environment.

“Without these necessary reforms, the way we trade goods and services between the home nations could be seriously impacted, harming the way we do business within our own borders.

“Now is not the time to create uncertainty for business with new barriers and additional costs that would trash our chances of an economic recovery.”

Scottish Secretary Alister Jack said: “We are taking action to protect the vital UK internal market, while respecting and strengthening devolution, by ensuring that goods can continue to travel barrier-free through the UK when the Transition Period ends.

Alister Jack

Alister Jack: powers returned

“Without this legislation there would be a serious risk to our jobs and businesses which is not surprising given the rest of the UK is Scotland’s biggest market, worth £55 billion a year, and a massive sixty per cent of all our exports.

“EU powers are also being returned to us so we can further invest in communities and businesses in Scotland to help us bounce back from the economic shock of coronavirus.

“Our proposals to safeguard the UK internal market are complementary to our ongoing work to develop UK-wide frameworks and I hope the devolved administration will work with us as we take this forward.”

The Bill will also enable the UK Government to provide financial assistance to Scotland, Wales, and Northern Ireland with new powers to spend taxpayers’ money previously administered by the EU.

From January 2021, the UK will be able to invest in communities and businesses nationwide with powers covering infrastructure, economic development, culture, sport, and support for educational, training and exchange opportunities both within the UK and internationally – much of which were previously done at an EU level.

Chancellor of the Duchy of Lancaster Michael Gove said:  The devolved administrations of the UK will enjoy a power surge when the Transition Period ends in December. Holyrood, Stormont and Cardiff Bay will soon have more powers than ever before and there will be no change to the powers the devolved administrations already have.

“This Bill will also give the UK Government new spending powers to drive our economic recovery from COVID-19 and support businesses and communities right across the UK.

“No longer will unelected EU bodies be spending our money on our behalf. These new spending powers will mean that these decisions will now be made in the UK, focus on UK priorities and be accountable to the UK Parliament and people of the UK.” 



Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.