The United Kingdom Internal Market Bill (the "Bill") has featured regularly in the news since its introduction, most prominently due to its interaction with the Northern Ireland protocol of the Withdrawal Agreement. However, it is also controversial for its potential effect on devolution.
This piece is the first in a four-part series that will explain how the Bill is intended to work, and how it will interact with the devolution settlement. This Part 1 introduces the Bill. Parts 2 and 3 respectively will explain the mutual recognition and non-discrimination principles the Bill sets out. Part 4 will then assess the Bill's relationship to devolution. As so much has been written about it elsewhere, we will not assess the provisions relating to the Northern Ireland protocol.
The Bill was introduced in the UK Parliament on 9 September 2020, to establish a set of rules said to be intended to support the 'internal market' for goods and services in the UK once the constraints imposed by EU law fall away when the Brexit transition period expires at the end of the year. These rules would in large part replace the constraints that EU law (and particularly Article 34 TFEU) currently places on the ability of the various legislatures and governments within the UK to affect the free movement of goods. While EU law focuses on trade between member states, the EU free movement rules also significantly reduce the scope for measures that would restrict intra-UK trade.
The UK Government's objectives for the Bill , according to the White Paper published in July 2020, are to provide frictionless trade, fair competition and the protection of business and consumers. The Bill sets out two 'market access principles' that are to be used to achieve these aims, which are the principles of mutual recognition and non-discrimination. The enactment of these principles will mean that regulators, local authorities, the devolved legislatures and governments, and the UK Government (and perhaps even the UK Parliament) will be constrained in their ability to impose new regulations that affect goods and services. These proposed restrictions on the post-Brexit freedom of action of the devolved institutions, including the Scottish Parliament, has created controversy.
The Bill will confer functions on the Competition and Markets Authority to monitor and report on the functioning of the internal market. The CMA will also be able to consider and report on the impact of specific regulation, either at the request of the government that proposes to make it or has made it or (after it has been made) at the request of another government within the UK that considers that the regulation has or will have a detrimental effect on the internal market. The CMA will not be able to strike down legislation, but its views and recommendations are likely to carry significant political weight in any inter-government disputes.
The Bill completed its passage through the House of Commons on 29 September, having been amended by the Government to clarify some aspects of its intended operation. It is currently making its way through the House of Lords, where it is expected to have a more difficult passage.
The upcoming briefings in this series will explain the market access principles and consider how they might interact with devolution in Scotland.