Letter to parliamentarians on the UK Internal Market Bill

Dear Parliamentarians, 

As civil society groups from across the UK, we are writing to express our serious concerns about the threat the UK Internal Market Bill poses to the devolution settlements, the rule of law and the UK’s high standards in a number of areas, including housing, health and environmental regulations.

Threat to the rule of law

If enacted, the UK Internal Market Bill would violate international law by giving Ministers the power to disapprove elements of the EU/UK Withdrawal Agreement, specifically the Northern Ireland Protocol. This is a highly concerning move by the UK government, one which we strongly oppose and one which is only slightly mitigated by the upcoming amendment proposed by the government. Further, the provisions under Clause 45 appear to exclude judicial review of regulations made under Clauses 42 and 43. Judicial review is an important constitutional safeguard and the Bill as it stands risks excluding the possibility of legal oversight by the courts. 

The UK government has claimed that making these changes unilaterally to the Protocol is necessary to protect peace in Northern Ireland. However, the protocol was at the heart of protecting the Belfast/Good Friday agreement and the principle of non-diminution of rights as the UK exits the EU. The Bill risks compromising this role and if the UK government is already stating that they are prepared to renege on its commitments under this agreement before the transition period has even ended, then it bodes poorly for the future of other elements of that agreement as we move forward. 

Threat to devolution

This Bill will undermine devolution to an unprecedented extent because it does not contain any mechanisms to balance the market access commitment with the regulatory autonomy of the devolved nations – as a result, it will have a strongly centralising effect. The overly broad scope of the mutual recognition and non-discrimination duties and severe lack of grounds to justify local requirements will cripple policy innovation in Wales, Scotland and Northern Ireland. This represents a high cost considering:

·       The lack of evidence that new barriers to internal trade would even emerge in the immediate aftermath of the transition period

·       The inherent disincentive for the devolved nations to regulate in such a way as to erect new barriers when this would be against their interest

·       The existing workaround common frameworks

Furthermore, the Bill recognises hardly any role for the devolved institutions in what should be collaborative processes and as evidenced by the White Paper’s recognition that the existing devolution settlements do not contain a reservation of state aid - Part 7 of this Bill constitutes a direct reversal of devolution in this area.

Threat to standards 

If enacted as is, the Bill will enable trade from England to bypass devolved regulatory standards in a vast array of areas (see some case studies annexed to this letter). This will indirectly prevent the devolved institutions from improving existing standards, implementing new higher standards and will even create an incentive to lower standards to ensure local businesses are able to compete.

Strong safeguards against a race to the bottom are especially necessary in the UK due to economic and constitutional imbalance between England and the devolved nations. Yet this Bill is highly unusual in this regard as it does not include any scope for justifying regulatory requirements on grounds of, for example social policy, environmental and animal welfare standards, labour standards, the interests of consumers and the promotion and protection of cultural diversity.

Legislative consent from the devolved legislatures 

The UK government is not legally prevented from proceeding with legislation that does not have the legislative consent from the devolved legislatures. Doing so, however, is, to quote a House of Commons Library report “a constitutionally unprecedented course of action”. As seen with both the EU Withdrawal Act 2018 and the Withdrawal Agreement Act 2020, the UK government has ignored the devolved legislatures refusal to grant legislative consent but proceeded regardless. We are concerned that this sets a dangerous precedent in which the devolved administrations are repeatedly ignored in their objections to legislation that drives roughshod over the devolution settlements. 

This will further damage intra-UK trust – an essential precondition for the proper functioning of an internal market.

Concern regarding the Clause 46 spending powers

The Bill provides significant spending powers to ministers in areas of devolved competence including in areas previously covered by EU funding. In keeping with the overall lack of consideration given in the Bill to protect devolved interests, there is no indication of a role for the devolved governments in the delivery of these funds.  The inclusion of these powers in this Bill raises significant concerns for the third sector because it suggests a departure from a focus on equality and cohesion in favour of internal market infrastructure spending.

Lack of proper parliamentary scrutiny 

Finally, we are also concerned about what has been announced so far when it comes to parliamentary scrutiny of the Bill. This is a piece of legislation that will have significant impacts on the devolution settlements, the peace process and the maintenance of regulatory standards across the whole of the UK. Normal timetable for legislation is far longer and the government has failed to provide a justification for rushing it through in this manner. This makes effective and proper scrutiny, not only by parliamentarians but also by civil society near impossible. Time and time again, we asked the government to commit to proper scrutiny of the Withdrawal Agreement Act 2020. In its response, the government said it took “its commitment to parliamentary scrutiny very seriously”. The government reneged on that commitment when it rushed the Withdrawal Agreement Act through Parliament in January and is doing so again with the UK Internal Market Bill. As a result, they are leaving out the voices of civil society and other stakeholders in the process. As has been made clear over the past weeks, legislating at speed can often result in problems later down the line.

These issues are further detailed in this briefing

Yours Sincerely, 

Appendix: Case Studies

The following case studies all serve to illustrate that differentiated approaches to regulation at the devolved level are often warranted and serve a clear public interest objective. This would be completely undermined by the UK Internal Market Bill because it does not provide any scope to justify these approaches. While existing differences are excluded, the Bill brings them within scope if they are updated.

 Case Study 1 – Banning certain Single Use Plastic items

The Welsh Government is currently consulting on this and UK Governments have put forward their own proposals.  The Welsh proposals are aligned with the EU’s Single Use Plastics (SUP) Directive and would ban nine products while the UK proposals would ban only three. As a result, plastic cutlery, plates, balloon sticks, some food containers, some cups and oxo-degradable products which include some types of bottles and carrier bags – would be banned in Wales but not England. This bill would enable producers in England to sell these products in Wales irrespective of the higher Welsh environmental standards.

 Case Study 2 – Food Standards

Food standards are currently subject to considerable EU harmonisation. After the transition period it will fall to the devolved nations and England to set their own standards in this area. If a devolved nation chose to regulate to a higher standard, it will not be able to prevent lower standard products from other regions being sold on its market – thereby rendering the higher standard pointless and harmful to local business.  This reasoning is also applicable to imports – so if the UK ultimately secures a trade deal with the US which permits the import of chlorinated chicken or hormone fed beef, the devolved legislatures will not be able to prevent the sale of those products on their markets even if they don't meet local food standards.

Furthermore, mutual recognition would also prevent the imposition of labelling requirements to support consumer choice and information.

 Case Study 3 - Bottled Spring Water

By virtue of the Spring Water and Bottled Drinking Water (Wales) Regulations 2015, Wales has specific requirements in relation to bottled water for it to be labelled as ‘spring’ water (it must be bottled at the source and meet specific anti-contamination protocols). Under these principles, bottled water produced in other parts of the UK could be sold as ‘spring water’ in Wales despite not meeting these requirements which runs counter to the interests of Welsh consumers.

 Case Study 4 – Housing

Wales already has its own standards in this area with the Welsh Housing Quality Standard, Homes for Life and Development Quality Requirements for grant-funded social and affordable housing. Likewise, Scotland has its own Building Regulations, the Social Housing Quality Standards, and Housing for Varying Needs standards that inform the design and build of new housing stock.  Under these proposals construction companies from other parts of the UK could bypass standards in one jurisdiction so long as they were complying with those from another region, even if there were a substantive difference in the level of standards being met. This would undermine the Welsh Government’s own desires to see Development Quality Requirements evolve further in Wales and apply across all tenures by 2025.

The licencing of private landlords also appears to be caught by the Bill as an authorisation requirement meaning this would be subject to mutual recognition.  As a result a landlord registered in one part of the UK would not need to satisfy local requirements to provide services.

 Case Study 5 - Minimum Alcohol pricing

Both Wales and Scotland have legislated to introduce minimum alcohol pricing. This has been successfully argued by the Scottish Government to serve a public health interest under EU law. While excluded from the scope of the Bill as it is a pre-existing requirement, had the Internal Market Bill already been in force prior to this, it probably wouldn’t have been possible to introduce the Welsh and Scottish requirements owing to the very high threshold required for a public health derogation. Furthermore, substantial updates, which might include for example a change to the price per unit, would bring the legislation within scope making it no longer applicable to businesses from England – a significant barrier to policy improvement.

Devolution and the rule of law is threatened by the UK Internal Market Bill warns campaigning groups and trade unions ahead of Commons debate

In a letter to MPs and Peers, civil society organisations warn of their “serious concerns” about the Internal Market Bill [1]. The letter, with signatories including the Pesticide Action Network UK and Unison, warns that the proposed internal market rules pose a threat to the devolution settlements, the rule of law and the UK’s high standards in a number of areas, including housing, health and environmental regulations.

The market access principles in the Bill will in practice limit the devolved administrations’ efforts to legislate in areas like environmental protections and tackling obesity [2]. Because the Bill lacks any meaningful grounds to justify devolved choices, it would, for example, enable producers in England to sell plastic cutlery in Wales irrespective of an upcoming local ban on single-use plastics. As a result, the Government’s proposals have a “strongly centralising effect” and “undermine devolution to an unprecedented extent”.  

Further, the amendment put forward by the government serves only as a parliamentary rubber stamp, the government will still be breaking international law even if Parliament approves [3]. Brian Gormally, director of the Committee on the Administration of Justice in Northern Ireland said that the Protocol “removed the threat” of a hard border on the isle of Ireland and the UK government making unilateral changes to it would “destroy the peace process”. 

Brian Gormally, director of the Committee on the Administration of Justice said: 

“A hard border on the island of Ireland would destroy the peace process. The Ireland/Northern Ireland Protocol and the Withdrawal Agreement removed that threat. It wasn't perfect but it did include protection of human rights and equality, it was an international agreement and it was enshrined in domestic law. Now, with the Internal Market Bill, Ministers will be empowered to change it unilaterally at will. That breaks international law and it also breaks our trust in the good faith of the British Government."

Josie Cohen, Head of Policy and Campaigns, Pesticide Action Network UK said: 

“This bill threatens to curtail attempts by the devolved administrations to better protect the health of their citizens and the environment from harmful pesticides. It also risks driving a race to the bottom in terms of pesticide standards, which is a far cry from Government promises that EU exit will allow us to create a more sustainable form of agriculture less-dependant on hazardous chemicals”

Charles Whitmore, Co-ordinator of the Wales Civil Society Forum on Brexit and Research Associate at Wales Governance Centre said: 

“The UK Internal Market Bill is an unprecedented challenge to devolution by Westminster. The narrative that the Bill is both necessary and represents a ‘power surge’ for the devolved nations is deeply disingenuous. The Bill removes devolution of state aid, gifting these powers back to London, and contains spending powers for the UK Government in devolved areas which are unnecessary for maintaining the UK’s already, highly integrated market. What's more, the UK Government claims to use these powers to replace EU funding, a matter which in Wales is governed in partnership between the devolved administration and the third sector with a focus on equality and cohesion, not by Westminster which seems intent on prioritising the industrial strategy and now internal market infrastructure”.

ENDS 

Notes to editors

[1] Letter to parliamentarians, available here

[2] Professor Nicola McEwen, ‘The Internal Market Bill: Implications for Devolution’: https://www.centreonconstitutionalchange.ac.uk/news-and-opinion/internal-market-bill-implications-devolution 

[3] For further information on the government’s amendment, see analysis by Professor of Public Law at Cambridge University, Mark Elliott here: 

https://twitter.com/ProfMarkElliott/status/1306497479832199170 

About the Brexit Civil Society Alliance

Brexit Civil Society Alliance is a UK wide alliance of charities, voluntary and campaigning organisations. The Alliance does not take a position on the 2016 EU referendum but seeks to raise concerns on behalf of its members and work to ensure that the Brexit process delivers on three principles: open and accountable lawmaking; a high standards UK; and no governance gap after Brexit. Read more about the Alliance here.