UK Internal Market Bill House of Lords Committee Stage Briefing October 2020

UK Internal Market Bill 

House of Lords Committee Stage Briefing 

October 2020

Read the briefing in PDF Format here.

This is a joint briefing from the Wales Civil Society Forum on Brexit and the Brexit Civil Society Alliance, intended for peers as the UK Internal Market Bill is being debated at Committee Stage in the House of Lords. 

The Wales Civil Society Forum on Brexit is a partnership between the Wales Governance Centre and Wales Council for Voluntary Action to provide information on the law and policy of Brexit to civil society organisations in Wales

The Brexit Civil Society Alliance is a UK wide alliance of charities, voluntary and civil society 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.

Introduction 

Almost every provision of the UK Internal Market Bill has been subject to universal criticism from the devolved governments, academia and civil society. Furthermore the argument that this legislation needs to be in place prior to the end of the transition period is inaccurate. The internal market barriers that are used to justify the Bill are hypothetical and unlikely to emerge given that it is against the incentives of the devolved administrations to introduce them. Even if concerns were to materialise, the European Union (Withdrawal) Act 2018 addresses the issue in s12 by providing the ability to freeze devolved competence in problematic areas of EU retained law pending the establishment of Common Frameworks.

As such, there is a strong argument to withdraw this legislation while a more suitable intergovernmental approach and better consultation are used to develop an appropriate system of governance. If that is not possible, the Bill will need amendments in a number of key areas which we have outlined below. 

Protecting the devolution settlements and safeguarding regulatory standards 

The devolution settlements are undermined to a serious extent in this Bill because: 

1. The Market Access Principles are excessively broad and do not provide the justification grounds one would normally expect in areas like social policy, environmental and animal welfare standards, labour standards, the interests of consumers and the promotion and protection of cultural diversity. Under these rules devolved legislation will no longer be applicable to all goods and services within the devolved nations. The regulatory impact assessment recognises that this will limit the ability of Wales, Scotland and Northern Ireland to introduce distinct approaches to environmental and social policy thereby undermining the very purpose of devolution.

2. Strong safeguards against creating an environment of regulatory competition between the four parts of the UK are especially necessary due to the economic and constitutional imbalance between the nations. Yet this is precisely what this Bill risks creating due to the absolute nature of the Market Access Principles and the underlying lack of processes to agree minimum standards, and justify legitimate requirements.

3. The Bill fails to ensure that devolved interests are reflected and protected in its architecture as it provides little to no role for the devolved institutions in many key areas, occasionally resorting to a weak duty to consult (clauses 3(10) and 6(7)). The Bill also undermines the considerable body of intergovernmental work that has already taken place in the shape of the Common Frameworks. Instead, these should be recognised in the Bill and the process further used to establish common UK approaches, like minimum standards agreed at the intergovernmental level in areas that will also be excluded from the scope of the market access principles.

To address these issues we recommend that peers support amendment 51 in the name of Lord Stevenson of Balmacara. This amendment puts in place a unified and expanded system of public interest exceptions, sometimes referred to as derogations. This would enable the devolved governments to maintain and introduce new rules where this represents a proportional contribution to a public interest goal.

Financial Assistance Powers and State Aid

If enacted as is, the Bill reverses the devolution in this area. 

1. Clause 50 directly reverses the devolution of state aid.

2. Clauses 48 and 49 provide spending powers to the UK Government in areas of devolved policy competence to, inter alia, replace EU funding. Much of this funding has traditionally flowed through devolved authorities into the voluntary sector with equality and social cohesion mainstreamed in its delivery. The Government has made it clear these powers would be used to centralise the distribution of these funds, thereby putting at risk the invaluable local relationships and experience which inform the use of these funds.

To address this we encourage peers to:

Vote for the amendments in the name of Lord Thomas, Lord Stevenson, Lord Fox, Baroness Finlay of Llandaff which opposes that Clause 50 stand part of the Bill. 

Vote for the amendments 167, 168, 132 in the name of Lord Stevenson of Balmacara. 

Threat to the rule of law

We share the concerns about the threat this Bill poses to the rule of law expressed by peers across the House during the Second Reading of the Bill. 

The UK government has claimed that making these changes unilaterally to the Protocol is necessary to protect peace in Northern Ireland. However:

1. 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. 

2. It overrides the human rights and equality protections of the Belfast Agreement.

3. It sets an extremely dangerous precedent in disapplying international human rights law, and more generally in limiting the effectiveness of judicial review.

To address this we encourage peers to:

Vote for the amendments in Lord Judge, Lord Falconer of Thoroton, Lord Howard of Lympne, Lord Bishop of Leeds and Lord Bishop of Leeds which opposes Clause 44. 

Vote for the amendments in the name of Lord Judge, Lord Falconer of Thoroton, Lord Howard of Lympne and Lord Newby, which opposes Clauses 45, 46 and 47 stand part of the Bill. 

Government Overreach

The Bill provides extensive delegated powers for the Secretary of State to unilaterally amend key provisions including:

1. The scope of which rules fall within mutual recognition and non-discrimination (with a weak duty to consult the devolved governments - Clauses 3 (8) and 6 (5).

2.  the potential grounds to derogate from the market access principles, by for example changing the definition of a ‘legitimate aim’ (clauses 8 (7) and 20 (7)).

3. The list of exclusions in schedules 1 and 2, the latter of which can even be amended by the made affirmative procedure (Clauses 10 and 17). This could for example be used to bring health services within the scope of the legislation.

To address this we encourage peers to support amendments which would subject it to the consent of devolved authorities: 

Vote for amendments 16 (to clause 3), 29 (to clause 6), 41 (to clause 8), 48 (to clause 10), 74 (to Clause 17), Amendment 99 (to Clause 20) in the name of Baroness Hayter of Kentish Town.  

Vote for amendments 15 (to Clause 3) amendment 30 (to Clause 6) in the name of Baroness Finlay of Llandaff. 

UK Internal Market Bill – Joint Briefing from the Wales Civil Society Forum on Brexit and the Brexit Civil Society Alliance

UK Internal Market Bill – Briefing Paper

This is a joint briefing from the Wales Civil Society Forum on Brexit and the Brexit Civil Society Alliance, intended for MPs and peers as the UK Internal Market Bill is being debated in Parliament. 

The Wales Civil Society Forum on Brexit is a partnership between the Wales Governance Centre and Wales Council for Voluntary Action to provide information on the law and policy of Brexit to civil society organisations in Wales. 

The Brexit Civil Society Alliance is a UK wide alliance of charities, voluntary and civil society 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. 

Executive Summary

This legislation is incredibly broad in its scope and is a massive overreaction to a problem the scale of which is unlikely to emerge in the immediate aftermath of the transition period given that introducing significant barriers to UK internal trade would harm the devolved regions the most. Rushing legislation of this nature through the UK Parliament, in all probability against the wishes of the devolved nations, is unjustified at best.

Not only is it a remarkably flippant disregard for the rule of law, but it cuts across devolution in very significant ways, with potential ramifications in areas previously covered by EU funding, housing, devolved environmental, food, consumer and public health standards and even the UK’s international human rights treaty commitments.

• The Bill breaches the UK’s International Commitments.

• It directly reverses the devolution of state aid contrary to the UK Government commitments to respect the devolution settlements throughout the Brexit process

• It gives the UK Government spending powers in areas of devolved competence which appear to be replacements for EU Funding

• The Mutual Recognition and Non-Discrimination Principles are excessively broad with very few grounds for derogation which will put devolved standards and the ability for policy innovation under considerable strain

• It fails to ensure that devolved interests are reflected and protected in its architecture as it provides little to no role for the devolved institutions in many key areas. Ordinarily, Internal Market governance by mutual recognition requires institutions and processes involving all regions as equals to foster constructive discussion and trust. Yet this bill does nothing to address this underlying governance requirement which may ultimately further damage the already strained relationship between the devolved administration and the UK government.

Full briefing is available in PDF below.