United Kingdom Internal Market Act 2020

The United Kingdom Internal Market Act 2020 is an act of the Parliament of the United Kingdom passed in December 2020. It is concerned with trade within the UK, as the UK is no longer subject to EU regulations. The act seeks to prevent internal trade barriers among the four constituent countries of the United Kingdom with provisions of mutual recognition and non-discrimination principles.[12]

United Kingdom Internal Market Act 2020
Act of Parliament
Long titleAn Act to make provision in connection with the internal market for goods and services in the United Kingdom (including provision about the recognition of professional and other qualifications); to make provision in connection with provisions of the Northern Ireland Protocol relating to trade and state aid; to authorise the provision of financial assistance by Ministers of the Crown in connection with economic development, infrastructure, culture, sport and educational or training activities and exchanges; to make regulation of the provision of distortive or harmful subsidies a reserved or excepted matter; and for connected purposes.
Citation2020 c. 27
Introduced byAlok Sharma, Secretary of State for Business, Energy and Industrial Strategy (Commons)
The Lord Callanan, Parliamentary Under-Secretary of State for Climate Change and Corporate Responsibility (Lords)
Territorial extentEngland and Wales, Scotland and Northern Ireland[1]
Dates
Royal assent17 December 2020
Commencement31 December 2020 23:00[2]
Other legislation
Amends
Status: Current legislation
History of passage through Parliament
Text of statute as originally enacted

The UK Government states that the act's intended purpose is to guarantee the continued seamless functioning of the UK's internal market, and to enshrine in law principles to ensure regulations from one part of the UK are recognised across the country.[13] The Scottish Government states that the act is additionally intended to authorise financial assistance by UK government ministers on devolved matters, and reserve devolved powers relating to subsidy control. They have said that the intent of the act is a "power grab".[14][15]

The Minister for the Cabinet Office, Michael Gove, described the act as a measure to preserve the territorial integrity of the United Kingdom.[16] The devolved administrations have criticised the act for its re-centralisation of control over commerce, reversing the devolution of power in the United Kingdom.[17][18]

The bill was rejected a number of times by the House of Lords. Eventually, the UK government made changes to make it more flexible, and also withdrew some provisions in Part 5 (relating to the Northern Ireland Protocol to the Brexit withdrawal agreement) that attracted controversy regarding their impact on the Withdrawal Agreement and compliance with international law. The act was given Royal Assent on 17 December 2020, some two weeks before the United Kingdom formally left the European Single Market.

Background

The United Kingdom joined the European Communities (EC) in 1973.[19] In 1987, the Single European Act, a treaty amendment that sought to increase the European integration and establishing an internal market, entered into force.[20] This internal market, known as the European Single Market, was established by 1993,[20] the same year that the EEC and related organisations were reformed into the European Union (EU).[21]

While a member of the EU and thus part of the European Single Market, the United Kingdom helped develop and was subject to common EU-wide rules on a number of policy areas, aimed at harmonising rules and removing trade barriers between the member states.[22] So these rules governed UK trade during a period when regulatory powers became devolved in the UK and the Good Friday Agreement on the Northern Ireland peace process was reached.

The majority of Scotland, Wales and Northern Ireland's trade is with the rest of the UK, with both the majority of exports and imports being with other parts of the UK. The majority of England's trade is outside the UK but the rest of the UK still accounts for over 10% of its imports and exports [3]

In a 2016 referendum, the United Kingdom voted to leave the European Union, colloquially known as Brexit. After lengthy negotiations, it left on 1 February 2020, but under the agreed withdrawal agreement it remained a part of the European Single Market until the end of a transition period lasting until 31 December 2020.

When the transition period ended on 31 December 2020, authority over a number of policy areas currently held by the EU reverted to the UK.[23] Of these areas, the UK government identified, in an April 2019 analysis, 160 policy areas that are intersecting with policy areas devolved to either the Northern Ireland Assembly (157), the Scottish Parliament (111) or the Welsh Senedd Cymru (70).[24][23] The government analysis pointed at 21 areas where legislation might be needed for a common framework, and 78 areas where agreements with the devolved legislatures was believed to be sufficient (in addition to adjustments to retained EU law).[24] Though in many key market areas regulatory policy like data and consumer protection, product standards and product safety will be reserved. [25]

UK Government Rationale

The UK Government stated that the bill's intended purpose is to guarantee the continued seamless functioning of the UK's internal market, and to enshrine in law principles to ensure regulations from one part of the UK are recognised across the country.[13] The UK government also stated that the legislation and related common frameworks were a "power surge" for devolved administration[26][27][28] This claim is contradicted by considerable analysis by legal scholars published on the issue, as well as by the House of Lords Select Committee on the Constitution.[29][30] The act also puts the reservation to Westminster of the power to regulate state aid into primary legislation.[3]

The Bill also gave UK Government formal spending powers in areas of devolved competence. The UK government stated this allows it to easily replace EU funding programmes. Previously when the UK government wanted to spend money on a devolved area such as education it would give the money to the Devolved Administration to deliver the objective. This provision empowers the UK government to fund projects directly without needing to involve the Devolved Administrations. 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.[31] Minister for the Cabinet Office, Michael Gove, described the bill as a measure to preserve the territorial integrity of the United Kingdom.[32]

Northern Ireland

Article 6 of the Northern Ireland Protocol, included in the withdrawal agreement in October 2019, includes reference to the notion of United Kingdom's internal market:[33]

Having regard to Northern Ireland's integral place in the United Kingdom's internal market, the Union and the United Kingdom shall use their best endeavours to facilitate the trade between Northern Ireland and other parts of the United Kingdom, in accordance with applicable legislation and taking into account their respective regulatory regimes as well as the implementation thereof. The Joint Committee shall keep the application of this paragraph under constant review and shall adopt appropriate recommendations with a view to avoiding controls at the ports and airports of Northern Ireland to the extent possible.

— Article 6: Protection of the UK internal market

Progress in Parliament

On 16 July 2020, the United Kingdom Government published its white paper for the Bill, which would update the UK internal market, place new definitions and structures into domestic law that would complement the what is currently on the statute book, and update the old-style language used in the Act of Union 1707 into "modern English".[34] The Government also started a consultation on the UK internal market white paper, which ran for 4 weeks and finished on 13 August.[35][36]

On 9 September 2020, the Government published the Bill.[37][38][39][40] The Bill explicitly includes provisions that are incompatible with the Withdrawal Agreement and thus, as the Government acknowledges, illegal under international law.[41] One simple and fast way to solve such an issue might be to agree a trade deal with the EU.[42] In a written statement published on 10 September 2020, the government cited the 2017 decision of the Supreme Court in R (Miller) v Secretary of State for Exiting the European Union as supporting the government's position that "Parliament is sovereign as a matter of domestic law and can pass legislation which is in breach of the UK’s Treaty obligations."[43]

On 15 September, the Bill passed its second reading in the House of Commons, by 340 MPs to 263 MPs,[44] following a failed amendment to not hold a second reading proposed by Labour party leader Keir Starmer.[45] In total, out of 364 Conservative MPs, 328 voted in favour of the bill at its second reading and two voted against.[46]

On 29 September, the Bill passed its third reading in the House of Commons by 340 votes to 256, and went to the House of Lords for consideration and review.[47] Earlier in the day, a new clause that would require "ministers to respect the rule of law and uphold the independence of the courts" was voted down 256 to 350, those voting against being from Conservative and Democratic Unionist parties.[48]

In December, after multiple defeats in the House of Lords, the UK government made changes which they said would allow a certain amount of divergence from the internal market rules for the devolved administrations where these were agreed through the common frameworks, and also allowed the Lords to remove those provisions of the Bill that were in breach of international law.[49] The act received royal assent on 17 December.

The UK government did not seek legislative consent from the Devolved Legislatures. However the Scottish Parliament still held a consent vote, where consent was denied. This was only the second act after the EU Withdrawal Act 2020 where the Scottish Parliament has withheld consent since the Parliament was established in 1998.

Provisions in Part 5 on Northern Ireland

Brandon Lewis, Secretary of State for Northern Ireland, told the House of Commons that the bill would "break international law in a specific and limited way",[41] by overriding article four of the Brexit withdrawal agreement, specifically by modifying the movement, sale, certification, and oversight of products in Northern Ireland. The Government said that the decision to do so was prompted by potential bans on the sale of GB agri-food products in Northern Ireland, should trade negotiations with the European Union fail.[50] The bill was criticised by the European Union for similar reasons.[51]

On 8 December 2020, Duchy of Lancaster Chancellor Michael Gove and European Union Vice-President of the European Commission for Interinstitutional Relations, Maroš Šefčovič, reached an 'agreement in principle' by which the UK government withdrew some provisions in Part 5 of the Bill.[52]

Provisions

Mutual recognition and non-discrimination principles

The Internal Market Act aims at preventing trade barriers within the United Kingdom as a consequence of leaving the European Union, central to this are the two principles of mutual recognition and non-discrimination.[3]

While the act continues to allow devolved government to set its own standards for products and sale of goods and services,[53] the mutual recognition principle disapplies these rules to goods and services from other parts of the UK, ensuring that when goods and services can be legally sold in one part of the UK, they can legally be sold in all other parts too. Some exceptions apply.[3] For example a regulation like Scottish Minimum Alcohol pricing would be unaffected as long as it didn't seek to charge higher minimums on Northern Irish whiskey. However a Scottish law that required a change to how whisky is produced could only be applied to whisky produced in Scotland, and couldn't be used to prevent the sale of Northern Irish whisky not made in accordance with the new Scottish laws.[54]

The principle of non-discrimination prevents government departments, devolved governments, local authorities and other regulatory bodies from enacting regulation or enforcing it in a way that discriminates between goods produced in, and services provided from, other parts of the UK. This includes both direct discrimination, and indirect discrimination that puts products and services from other parts of the UK at a disadvantage, compared to local products and services. Some service categories are explicitly exempted – these include broadcasting, financial services and postal services.[3][55]

Mutual Recognition of Professional Qualifications

The act also ensures that professional qualifications from one part of the UK are automatically recognised in all other parts; this means that people are free to move to other parts, while not having to re-qualify. Some exceptions apply, including when there is a process in place for having one's qualifications recognised (i.e. not automatically).[3]

Office of the Internal Market

The legislature also establishes an Office of the Internal Market (OIM) with in the Competition and Markets Authority (CMA). The objective of the OIM is monitor the UK Internal Market and report on issues within. It can instigate such investigations into issues itself or at the behest of the UK government or one of the devolved administrations. It also required representation of Scotland, Wales and Northern Ireland on the board of the CMA.[56] It should also be noted that in its negotiations with the EU the UK had set out its intent to give the CMA oversight of any future State Aid Regime in the UK.[57]

Northern Ireland Protocol

Part 5 of the bill was designed to ensure Northern Ireland retained unfettered access to the rest of the UK Internal Market whilst still abiding by the terms of the Northern Ireland Protocol, However it also gave ministers the power to unilaterally override the protocol. These provisions in Part 5 of the Bill, clauses 40 to 45, caused much controversy.[58] There were concerns about their impact on the rule of law. The UK government ultimately withdrew the concerning clauses before enactment.[52] Other provisions place duties on UK and devolved ministers to not take actions that might fetter Northern Ireland's commerce with the rest of the UK.

Section 46 (originally clause 40) provides that UK government ministers, devolved government ministers and anybody else exercising a function of public nature, when exercising a function relating to the protocol or the movement of goods within the UK, must have special regard for Northern Ireland’s place in the UK internal market and customs territory and the need for a free flow of goods between Great Britain and Northern Ireland.

Section 47 (clause 41) provides that UK government ministers, devolved government ministers and anybody else exercising a function of public nature, must not exercise a function that would result in any new Northern Ireland-Great Britain check, control or administrative process in some circumstances after the transition period ends.

Sections 48 and 49 (clauses 43 and 44) empowers only the Secretary of State to comply with state aid requirements in the protocol to give the European Commission a notification or information relating to state aid and to make secondary legislation in relation to state aid in the protocol.

The UK government withdrew clauses 42 and 45 before enactment. Clause 42 would have empowered ministers to make secondary legislation about the application of exit procedures or a description of goods moving from Northern Ireland to Great Britain. Clause 45 would have provided such secondary legislation to have effect, irrespective of whether it was incompatible or inconsistent with domestic or international law.[59]

Spending powers

It provides UK Government with the ability to directly spend on projects within Scotland, Wales and Northern Ireland, even if those policy areas normally fall under devolved competence, such as education or infrastructure.

Subsidy Control

The act makes regulating Subsidy (but not the granting of subsidy) a matter reserved for the UK government, something the UK government argue it already was, whereas the Scottish and Welsh government argue it was devolved.[60][3] This regulation had previously been done by the EU (see State aid (European Union)). The UK government had stated there will be no system put in place, beyond the WTO requirements. The government will publish guidance on how to comply with these requirements. However, the statement also notes that the government will publish a consultation on whether it should go further than its international commitments. This implies that in the future the government will consider stronger obligations – though it is not clear whether this amount to anything like the obligations of state aid.[61]

Constitutional Status

The act is a protected enactment which gives it a protected constitutional status, so that it cannot be superseded by devolved legislation even in areas of devolved legislatures' competence.[3]

It is unclear whether and how the bill would affect future UK Primary Parliament legislation that was contrary to the market access principles. The usual principle is that an Act of Parliament cannot constrain Parliament's ability to make future Acts, but it is possible that the courts might treat the Act as a “constitutional statute”. They would then only recognise legislation purporting to breach the market access principles if that legislation expressly made clear that it was to apply notwithstanding the Internal Market Act.[62]

Effect on Devolution

The act has a number of effects on the constitutional arrangements regarding devolved legislative powers. Principle amongst these is the effect that the market access principles will have on the practical ability of the devolved administrations to regulate economic activity.[4][5][6][9] It also expressly reserves the regulation of distortive or harmful subsidies to the UK Government, and gives them spending powers in numerous policymaking areas. These risk undermining the authority of the devolved institutions to determine infrastructure priorities within their respective jurisdiction.[4]

The UK government argues that the market access principles do not affect the powers of the devolved legislatures and governments. However, while the powers remain similar "on paper", the principles undermine devolved competences in two ways. These relate to its status as a protected enactment, and to the disproportionate market size and power of the economy under English jurisdiction.[4] Because the devolved governments will be unable to disapply the market access principles, if they attempt to introduce new or stricter regulatory standards, they will only apply to goods produced within the devolved jurisdiction. This means that these standards will have little or no practical effect other than to disadvantage their own economy, severely restricting their ability to introduce regulatory divergence, or pursue different economic or social choices to those made in Westminster.[6][9][7]

Reactions in the UK

Resignations

Publication of the bill has led to several resignations in government and the civil service.

On 8 September 2020, Jonathan Jones resigned his job as head of the Government Legal Department owing to concerns about "the legal implications of Britain's failure to secure a post-Brexit trade deal with the EU".[63]

On 14 September 2020, Rehman Chishti resigned his position as the Prime Minister's Special Envoy for Freedom of Religion or Belief, noting in his resignation letter that "I can't support [the] Internal Market Bill in its current form, which unilaterally break UK's legal commitments.[64]

On 16 September 2020, Richard Keen, Baron Keen of Elie resigned his position as Advocate General for Scotland citing concerns arising from the UK Internal Market Bill, noting in his resignation letter to Boris Johnson that he found it "increasingly difficult to reconcile what I consider to be my obligations as a Law Officer with your policy intentions".[65]

On 18 September 2020, barrister Amal Clooney resigned as the UK's special envoy on media freedom, noting in her resignation letter that "it is lamentable for the UK to be speaking of its intention to violate an international treaty signed by the prime minister less than a year ago."[66]

Devolved Administrations

Prior to the passage of the bill, the Government's plans for UK's internal market, post-Brexit, raised constitutional questions for the Devolved Administrations, for instance on the way of resolving dispute.[67] The HM Treasury and Department for Business, Energy and Industrial Strategy initially jointly worked with all the Scottish and Welsh Governments and the Northern Ireland Civil Service in developing Internal Market policy.

The Scottish and Welsh Administrations have criticised the bill as they preceive that its re-centralisation of control over commerce, reversing the devolution of power in the United Kingdom.[68][69] The SNP have stated "The Tory power grab bill represents the biggest threat to devolution in decades, and would enable Westminster to overrule the democratic will of the Scottish Parliament". The UK government disputes the DA's interpretation say it is instead a power surge for devolution.

Under the proposals, the Westminster government will have the power to give cash directly to Scottish councils, fund infrastructure projects, cultural and sporting events and educational facilities. The move is a controversial one as under the devolution settlement the Scottish Parliament has for more than 20 years made spending decisions in these areas. By granting local councils and MPs the ability to go over the head of Holyrood and appeal to Westminster for cash, it has set up the prospect of future clashes between the Scottish and UK governments over priorities.

A government spokesperson said of the new spending powers“The UK government will be empowered to make investments in Scotland, Wales and Northern Ireland. This does not stop the Scottish Government from investing in whatever they want to invest in. When the SNP say this is a power grab, I don’t know what powers we’re grabbing. They will have even more powers. MSPs will have more say than they ever had before. It is a power surge for Scotland and a double win for communities. The people of Scotland have two governments, both of them represent the people of Scotland and it’s right that the UK Government and UK Parliament should be able to decide how British taxpayers’ money is spent. [70]

Northern Ireland

In Northern Ireland, First Minister Arlene Foster said Northern Ireland businesses need "unfettered access" to the market in Britain along with guarantees they would not be discriminated against.[71] Foster said that "it was 'important' that Northern Ireland has unfettered access to the rest of the U.K." but that the issue was a "matter for the ministers in Whitehall and in Westminster".[72] Christopher Stalford, a DUP assembly-member for South Belfast said in Stormont on 14 September 2020 that "there is great rejoicing over one sinner that repents" – a biblical reference to Johnson's proposed change of heart on the Northern Ireland Protocol.[72]

Deputy First Minister Michelle O'Neill said that "Brandon Lewis and the entire British cabinet do not care about what happens to us in the north. They have demonstrated that time and time again they are prepared to use us here in the north as a pawn in the Brexit negotiations – this is an international agreement which was painstakingly struck after months of negotiations."[71] O'Neill said the Withdrawal Agreement protects the Good Friday Agreement and it was "astounding" the UK government "thinks it's fine" to wreck an international treaty they had signed up to.[73]

The DUP's chief whip at Westminster Sammy Wilson is quoted as saying to BBC Radio Ulster that he would "reserve judgment" until he saw the bill in full, but that the "Northern Ireland question was back on the agenda".[72]

Scotland
Mike Russell is the Scottish Minister with responsibility for the Scottish Government position on the UK Internal Market as part of his ministerial brief on EU exit and constitutional matters

The Scottish Government pulled out of joint work with the UK government and other Devolved Administration on developing policy on the UK Internal Market following a speech by Mike Russell in March 2019.[74] The UK government regretted the Scottish Government decision and encouraged them to return to joint working.

The Scottish Government rejected the UK government's internal market plans since first proposed in July 2020, with the First Minister of Scotland Nicola Sturgeon quoted as saying that the plans are "riding roughshod over the powers of the Scottish parliament".[72] It did not rule out legal action.[75] Sturgeon described the Bill as "an abomination which would cripple devolution" and that "the UK government are not only set to break international law – it is clear they are now set to break devolution".[76] She tweeted on 9 September 2020 that it is a "full frontal assault on devolution" and later said it was an "abomination on almost every level".[72]

The Scottish Government states that the bill is additionally intended to authorise financial assistance by UK government ministers on devolved matters, and reserve devolved powers relating to subsidy control. They have said that the intent of the bill is a "power grab".[77][15]

The Scottish National Party's Westminster Leader Ian Blackford said to Boris Johnson during Prime Minister's Questions on 9 September 2020 that Johnson was "creating a rogue state where the rule of law does not apply".[72] and that "the time for Scotland’s place as an independent, international, law-abiding nation is almost here".[72] Former acting Scottish Labour leader Alex Rowley has described it as "a farce that threatens the very foundations of the United Kingdom".[76]

On 7 October 2020, the Scottish Parliament voted 90 to 28 to refuse legislative consent.[78]

Wales
Jeremy Miles Welsh Government's Counsel General has proposed taking legal action against the act

The Welsh Government has described it as "an attack on democracy and an affront to the people of Wales, Scotland and Northern Ireland" and accused Westminster of "stealing powers".[79]

First Minister of Wales, Mark Drakeford, called the Government's UK internal market plans a "power grab".[72] He said it represented a "smash and grab" on the devolved governments and takes back powers that have been devolved to Wales, Northern Ireland and Scotland for 20 years.[80][76] Plaid Cymru leader, Adam Price, said that the bill signifies "the destruction of two decades of devolution".[76]

The Welsh Government's Counsel General and Minister for European Transition Jeremy Miles is quoted as saying on 8 September 2020 that "the U.K. government plans to sacrifice the future of the union by stealing powers from devolved administrations ... the bill is an attack on democracy."[72]

Westminster

Members of the Commons and the Lords, on both sides of the Houses, have expressed their concern at those clauses of the Bill that would seek to set aside unilaterally the Northern Ireland protocol of the UK's withdrawal agreement.

The bill has drawn criticism from all five living former prime ministers: John Major, Tony Blair, Gordon Brown, David Cameron, and Theresa May.[81] May said that "the United Kingdom government signed the withdrawal agreement with the Northern Ireland Protocol. This Parliament voted that withdrawal agreement into UK legislation. The government is now changing the operation of that agreement. How can the government reassure future international partners that the UK can be trusted to abide by the legal obligations of the agreements it signs?"[41] John Major said "For generations, Britain's word – solemnly given – has been accepted by friend and foe. Our signature on any treaty or agreement has been sacrosanct. If we lose our reputation for honouring the promises we make, we will have lost something beyond price that may never be regained."[82]

Another former Conservative leader, Michael Howard, has said "Does [the minister] not understand the damage done to our reputation for probity and respect for the rule of law by those five words uttered by his ministerial colleague in another place on Tuesday – words that I never thought I would hear uttered by a British minister, far less a Conservative minister. How can we reproach Russia or China or Iran when their conduct falls below internationally accepted standards when we are showing such scant regard for our treaty obligations?"[83]

Conservative MP Sir Roger Gale, said he would not support the Bill: "put simply, I will not vote to break the law".[84] Similarly, former Attorney General Geoffrey Cox and former Chancellor of the Exchequer Sajid Javid, who both, until February 2020, served in Johnson's government and are both Conservative MPs, also said that they could not support the bill.[85][86]

Nonetheless, the government has not had any resignations over the bill yet, including by the Lord Chancellor or the Attorney General, whose roles have a special focus on the rule of law.[87] Neither has the Conservative Party seen any of its MPs leave the party over the bill yet.

Conservative MP William Cash has spoken positively of the bill in the House of Commons, concluding: "The Bill is needed as an insurance policy and as a guarantee of our national sovereignty within the meaning of the Vienna convention, and our national security."[88]

On 15 September 2020, at the second reading of the bill in the House of Commons, Tory MPs Roger Gale and Andrew Percy voted against the bill while 30 others abstained.[89][90]

On 20 October 2020, while moving to the second reading of the bill, the House of Lords voted 395 against 169 approving the motion of regret "that Part 5 of the bill contains provisions which, if enacted, would undermine the rule of law and damage the reputation of the United Kingdom", an amendment proposed by Lord Judge, former Lord Chief Justice.[91] The vote over this amendment was the biggest defeat (a margin of 226) for the government in the Lords since 1999.[92] Conservative Party Lords voting against the government included the recently resigned Advocate General for Scotland, Lord Keen; former Chief of Staff to Theresa May, Gavin Barwell; former party leader Michael Howard; former Chancellors of the Exchequer, Kenneth Clarke and Norman Lamont; and former European Commissioner Christopher Tugendhat.

Lord Neuberger English Judge and Former President of the UK Supreme Court

The original parts of the bill that would have allowed The UK Government to break the Northern Ireland Protocol of its Withdrawal Agreement with the EU received extensive criticism from across the legal profession. It was highlighted that it set a bad precedent both domestically and for other regimes when it can to international law and undermined the UK's reputation[93]

Charles Livingstone, writing in the house journal of The Law Society of Scotland, stated that these rules would in large part, though not entirely, reflect 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.[94]

On 7 October 2020, former President of the Supreme Court, Lord Neuberger, condemned the clause in the Bill that would prevent judicial review:[78]

Once you deprive people of the right to go to court to challenge the government, you are in a dictatorship, you are in a tyranny. The right of litigants to go to court to protect their rights and ensure that the government complies with its legal obligation is fundamental to any system ... You could be going down a very slippery slope.

Former Conservative Attorney General Dominic Grieve QC said that this "ouster clause ... goes to the heart of parliamentary democracy", preventing the government being challenged over its actions.[78] Former Home Secretary Michael Howard told the meeting that he was "opposed to the clauses in the bill which breach international law".[78] Other senior barristers who stated their opposition (at an online conference arranged by the International Bar Association) included SNP MP Joanna Cherry QC, Labour peer Helena Kennedy QC, and Jessica Simor QC.[78]

The former President of the Supreme Court, David Neuberger, criticised the clause that would prevent any judicial review of the act's operation. Lord Neuberger indicated that in a situation where the right to challenge the government in court is removed, "you are in a dictatorship, you are in a tyranny".[78]

Competition law expert Alan Davis of Pinsent Masons, the law firm behind Out-Law, said: "The act is likely to provide greater clarity to businesses trading in the UK in the years ahead, whether they are based here or overseas. If new regulatory barriers to trade within the UK are created, the act can be used as a sword or a shield to overcome them." [95]

Church leaders
Archbishop of Canterbury Justin Welby is one of the 26 Church of England Bishops that sit in the House of Lords.

In a letter to The Financial Times on 19 October 2020, the Primates of the Anglican Communion churches of the four nations of the United Kingdom said that the Bill would "create a disastrous precedent" by "equip[ping] a government minister to break international law. This has enormous moral, as well as political and legal, consequences".[96][97]

Cabinet Office Minister Lord True commented in response to Archbishop's comments in the Lords that "I did have some reflections during the course of the debate and, at one point, found myself asking if Henry VIII's foundation of the Church of England was fully in accord both with our domestic law and international obligations”.[98]

Business

The Confederation of British Industry supported the legislation highlighting "the Bill should ensure that following the UK’s exit from the EU, no new barriers to trade between England, Scotland and Wales should be established, and for the legislation to work effectively in Northern Ireland, the Bill must work in lockstep with the Northern Ireland Protocol."[99]

The Federation of Small Businesses welcomed the principles of Mutual Recognition and nondiscrimination noting that "Both principles are critical to the proper functioning of the UK Internal Market for small and micro businesses." [100]

The British Retail Consortium's head of devolved nations said in response to the BEIS white paper "We must not lose sight of the fact that consumers and our economy as a whole benefits enormously from the UK’s largely unfettered internal single market, as economies of scale and regulatory consistency helps reduce business costs which in turn keeps down shop prices and provides greater consumer choice. Increasingly differential approaches towards public policy in different parts of the UK may well offer new flexibilities, however it also risks a more fragmented environment for firms operating across the UK." [101]

British Chambers of Commerce set out their view as “a fragmented system would create additional costs, bureaucracy and supply chain challenges that could disrupt operations for firms across the UK. As these proposals progress, business communities will want practical considerations - not politics - at the heart of the debate and shaping solutions [102]

The National Farmers Union supported the legislation. [103] Scottish NFU's position was more nuanced as though highlighting that the UK internal market is vital for Scottish farmers they raised concerns that the bill would damage work on common frameworks [104] The Ulster Farmers' Union welcomed the UK Government’s initiative to put in place a legislative framework to safeguard the functioning of the UKIM [105]

Allie Renison, Head of Europe and Trade Policy at the Institute of Directors, said:[106]

Directors want to see as much predictability and stability as possible when the Brexit transition period ends. Keeping disruption of trading arrangements to a minimum is crucial, particularly as the Withdrawal Agreement provides for unprecedented new arrangements between Great Britain and Northern Ireland. Codifying the UK Internal Market in law for continuity purposes after Brexit is an important aim, but further clarity is still needed for directors to understand the full practical operation of them. At present, EU law provides a transparent level playing field for businesses, where enforcement and dispute settlement rules are clear. Maintaining that clarity for commerce across the UK once transition ends is critical. However, directors will be wary of any moves that could increase the likelihood of no deal.

Academia

Professor Michael Dougan pf Liverpool University stated "there are sound reasons to believe that the issue of UK regulatory divergence,and the consequent need for internal market management, will indeed becomea real and practical matter". He further set out that in the trade theory sets out a "toolkit" for managing territorial differences. The first is harmonisation of laws is very effective at removing barriers to trade and distortions of competition, since it establishes common rules for the participating territories –though for that reason, it comes with considerable costs in terms of accommodating different preferences and respecting local democracy.

In the absence of harmonisation, two major principles provide alternative solutions to the problem of cross-border trade. First, non-discrimination between domestic and imported goods / services. That is why the second major alternative to harmonisation,as provided by ourtrade law “tool box”,is so important. Mutual recognitionis the principle that, if good or service X is lawful in Territory A, then good or service X should also be capable of lawful provision in Territory B –even if the latter has different regulatory standards and still expects its own producers / providers to respect them. Mutual recognition is an extremely effective tool for promoting cross-border trade: after all, it successfully addresses many (non-discriminatory) barriers to trade; and does so without the need for regulatory harmonisation. But mutual recognition is also a more controversial trade principle: it means that Territory B has to live with the practical consequences (in terms of freely imported goods and services) that result from other territories following different and indeed lower regulatory standards. In practice, cross-border trade based on mutual recognition might remove barriers to trade while exaggerating distortions of competition; as well as significantly limiting Territory B’s ability to enforce its own economic and social preferenceseven within its own jurisdiction. [107]

Several academics suggested that the bill as originally introduced could restrict the way that certain legislative powers of the devolved administrations of Scotland and Wales can operate, on account of the greater market size and power of the English economy.[12] Professor Katy Hayward has highlighted that the legislation has less of a restrictive impact on the effectiveness of devolved legislation in Northern Ireland than it does in Scotland and Wales; but this is because the powers of the NI Assembly are already constrained by the Ireland/Northern Ireland Protocol. She that the legislation does little to address issues with the flow of trade from GB to NI[109] She also highlight that the uncertainty caused by the original clauses in bill on Northern Ireland meant "Whatever it means in practice, we can be sure it would mean acute legal, political and economic uncertainty to Northern Ireland at a time of post-Covid-19 crisis and recession."

The UK government has stated that the legislation does not impact on the powers Devolved Legislatures or prevent them from passing any legislation as they do now. However, several academics stated in commentary on the bill, that while the powers remain similar "on paper", the principles undermine devolved competences in two ways. These relate to its status as a protected enactment, and to the disproportionate market size and power of the economy under English jurisdiction.[4] Because the devolved governments will be unable to disapply the market access principles, if they attempt to introduce new or stricter regulatory standards, they will only apply to goods produced within the devolved jurisdiction. This means that these standards will have little or no practical effect other than to disadvantage their own economy, severely restricting their ability to introduce regulatory divergence, or pursue different economic or social choices to those made in Westminster. Academics such as Michael Dougan called for a pre legislative consultation mechanism and others such as Dr Nicola McEwen recommended an exemptions regime built on the common frameworks programme and its basis of mutual agreement. [6][9][7] After defeats in the Lords, the Government made amendments to introduce these suggestions.[110] These changes were primarily accredited to retired Scottish judge Lord Hope to whom tributes were paid during the final House of Lords debate. It was said had "used his skill and experience in drafting and interpreting the law to pick away at the issues and come up with a solution".[111]

Political Parties

Labour, Liberal Democrats, Scottish National Party and Plaid Cyrmu all opposed the bill in Parliament. The Democratic Unionist Party of Northern Ireland was generally supportive, However Sinn Fein, The Social Democrat and Labour Party, and the Alliance Party all heavily criticised the original part of the bill that would of allowed the Northern Ireland Secretary of State to break the Northern Ireland Protocol.

External reactions

European Commission

After The Financial Times had sight of the Bill on 6 September and said that Government of the UK appeared intent on breaking international law, Commission President Ursula von der Leyen warned Johnson not to break international law, saying that the UK's implementation of the withdrawal agreement was a "prerequisite for any future partnership".[112] On 1 October 2020, the European Commission sent to the UK Government "a letter of formal notice for breaching its obligations under the Withdrawal Agreement" because the latter's refusal to remove the contentious clauses in the Bill.[113] The letter marks "the first step of an infringement process".[114]

Ireland

On 9 September, Irish Taoiseach (Premier) Micheal Martin tweeted "Any negotiation process can only proceed on the basis of trust. When one party to a negotiation decides that they can change what’s already agreed and incorporated into law, it really undermines trust. This is a critical time in the #Brexit process and the stakes are very high."[115]

United States

The Speaker of the House of Representatives Nancy Pelosi said "if the U.K. violates that international treaty and Brexit undermines the Good Friday accord, there will be absolutely no chance of a U.S.-U.K. trade agreement passing the Congress".[116]

During the passage of the bill Joe Biden (before being elected President) also warned he would not sign a trade deal with the UK if the Prime Minister pressed ahead with the controversial clauses of the bill regarding the Northern Ireland Protocol.[117]

See also

References
  1. Section 59 of the Act
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