In context: The UK Internal Market Bill

The Scottish Parliament has voted to withhold legislative consent on a major UK Government Brexit-related bill. What is it all about, and what happens next?

What is the Bill about?

The UK Internal Market Bill is designed to govern how goods and services will be regulated when the UK leaves the EU’s Common Market after Brexit.

Its basic aim is to make sure that there’s compatibility in rules and laws across the four nations that would allow free trade and the movement of workers to continue smoothly. 

But there are some very controversial aspects to it.

The bill covers three main areas: 

• The regulatory framework for goods and services across the UK, which also includes things like professional qualifications;
• State aid, allowing UK ministers to make direct investment across the UK and also decide on matters of “distortive or harmful subsidies”;
• and giving UK ministers the power to make changes to areas set out in the Northern Ireland protocol, part of the previously agreed UK Withdrawal Agreement.

Why is this Bill needed?

Because of Brexit. There was never a need for the concept of an ‘internal market’ in the UK before it joined the EU in the 1970s because devolution had not yet been established and so Westminster was where all rules and laws were made.

In 1999, when devolution was first established, there was also no need to have provisions for an ‘internal market’ because the entire UK was signed up to the EU’s rules.

 Now, as the UK leaves the European bloc and the government hopes to strike independent trade deals with the EU and the rest of the world, the UK Government will be negotiating with nations for access to the UK market and so it’s important to make sure products, foods and services that are made, imported or sold in one part of the UK are accepted across the whole nation. This bill is the UK Government’s way of ensuring that. 

Why is it so controversial?

Well, first there’s the fact that it breaks international law.

The UK Government has admitted to this. The EU Withdrawal Agreement that was passed in January included the so-called Northern Ireland Protocol, which in effect prevents any hard border on the island of Ireland. 

Parts of the Internal Market Bill would allow ministers to override that agreement to stop goods checks between Northern Ireland and mainland UK. This in theory could lead to checks along the border with the Republic of Ireland instead.

UK ministers say this is important to “protect the territorial integrity of the UK”. The EU says it’s a breach of previous agreements and is suing. 

There was near-universal condemnation of the move, including from the Irish government and even US presidential candidate Joe Biden, who both said it presents a risk to the Good Friday peace agreement. 

[It] is a full frontal assault on devolution - Nicola Sturgeon

But besides that, the bill has big implications for devolution. 

Devolved governments do agree to the basic principle that there needs to be common frameworks across the nation. After all, around 60 per cent of Scotland’s trade is with the rest of the UK.

But two terms have the Scottish Government very worried: mutual recognition and non-discrimination. 

The gist of these technical terms is that UK ministers will have the power to enforce regulatory alignment on all sorts of matters across the UK without the need to consult devolved parliaments. 

This is why the Scottish Government has termed the bill “a power grab” and claimed that it could lead to a “downward spiral” on food and agricultural standards as the UK does deals that could allow countries with lower standards to sell products into the UK.

There was already fears of 'hormone beef' and 'chlorine chicken' entering the UK market, which has lead campaigners to demand safeguards on standards be put in the UK's new Agriculture Bill. Opponents of the UK Internal Market Bill say it will be the mechanism by which devolved nations will be forced to accept such products.

On top of that, constitution secretary Michael Russell warned that the bill could even lead to Scottish Government policies being challenged in court by private companies if they appear anti-competitive.

But the UK Government has dismissed these concerns as “scare stories”. 

So, what happens next?

The Scottish Government has argued that the bill should now be withdrawn.

The UK Government has expressed its disappointment that the Scottish Parliament voted not to consent to the bill, but it plans to press ahead with it regardless.

This would be the second time the UK Government has disregarded the so-called Sewel convention, which means that the UK Government would not normally legislate on matters of devolved competence. The first time was with the Withdrawal Agreement.

Cabinet Office minister Michael Gove, when appearing before the Scottish Parliament’s Finance and Constitution Committee in October, said that “leaving the European Union is not a normal occurrence, it is an exceptional one”. 

The bill passed its first reading in the House of Commons and is now with the House of Lords, where it is likely to be amended.

Last week, peers overwhelmingly backed a motion of regret that said the bill "would undermine the rule of law and damage the reputation of the United Kingdom”. 

But the large Conservative majority in the Commons makes it near certain the bill will become law.

What people have said about the bill: 

Nicola Sturgeon: 

"[It] is a full frontal assault on devolution"

Boris Johnson:

"All this bill does actually is devolve power back from Brussels to Edinburgh"

Ursula von der Leyen: 

"This bill by its very nature a breach of the obligation of good faith laid down in the withdrawal agreement"

Douglas Ross: 

"Essential to protect 545,000 jobs in Scotland"

Michael Gove: 

"A power surge"

Michael Russell: 

"A power grab"

Theresa May: 

"Will lead to untold damage to the United Kingdom’s reputation"