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United Kingdom Internal Market Act 2020

United Kingdom Internal Market Act 2020
Act of Parliament
Parliament of the United Kingdom
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)
Martin Callanan, Parliamentary Under-Secretary of State for Climate Change and Corporate Responsibility (Lords)
Territorial extent 
Dates
Royal assent17 December 2020
Commencement31 December 2020 23:00
Other legislation
Amends
Status: Current legislation
History of passage through Parliament
Text of statute as originally enacted

The United Kingdom Internal Market Act 2020 (c. 27) is an act of the Parliament of the United Kingdom passed in December 2020. Its purpose is to prevent internal trade barriers within the UK, and to restrict the legislative powers of the devolved administrations in economic matters.[12] It is one of several pieces of legislation concerning trade that were passed following the European Union membership referendum, as after Brexit the UK is no longer directly subject to EU law.

The UK Government has stated that the legislation'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 has stated that the legislation is intended to introduce wide ranging constraints on devolved competence, and observed that it also authorises financial assistance by UK government ministers on devolved matters, and reserves devolved powers relating to subsidy control.[14] They said that the intent of the bill was a "power grab", and in a report published in March 2021 said that the act is "radically undermining the powers and democratic accountability of the Scottish Parliament."[15][16]

While the bill was before parliament, the Conservative MP and Minister for the Cabinet Office, Michael Gove, described the bill as a measure to preserve the territorial integrity of the United Kingdom.[17] The devolved administrations criticised the bill for its re-centralisation of control over commerce, reversing the devolution of power in the United Kingdom.[18][19]

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 had attracted controversy because of their impact on the rule of law. The act was given Royal assent on 17 December 2020, some two weeks before the United Kingdom formally left the European single market.[20]

The Welsh Government sought a judicial review of the legislation. In a hearing in April 2021, two High Court judges refused permission for a full hearing, ruling that the claim was premature in the absence of specific circumstances giving rise to the arguments raised by the Welsh Government.[21]

  1. ^ Thimont Jack, Maddy; Sargeant, Jess; Marshall, Joe; Hogarth, Raphael; Kane, James; Jones, Nick (9 September 2020). "UK Internal Market Bill". London: Institute for Government. Retrieved 17 September 2020.
  2. ^ Dougan, Michael; Hayward, Katy; Hunt, Jo; McEwen, Nicola; McHarg, Aileen; Wincott, Daniel (2020). UK and the Internal Market, Devolution and the Union. Centre on Constitutional Change (Report). University of Edinburgh; University of Aberdeen. pp. 2–3. Retrieved 16 October 2020.
  3. ^ Dougan, Michael (23 September 2020). Professor Michael Dougan: Evidence on the UK internal market bill. Finance and Constitution Committee (Report). Edinburgh: Scottish Parliamentary Corporate Body. 21st Meeting 2020, Session 5. Retrieved 15 October 2020. By imposing widespread obligations of non-discrimination and, more important, mutual recognition, the bill seeks to restrict the way that devolved competences operate in practice.
  4. ^ Masterman, Roger; Murray, Colin (2022). "The United Kingdom's Devolution Arrangements". Constitutional and Administrative Law (Third ed.). Cambridge: Cambridge University Press. pp. 471–473. doi:10.1017/9781009158497. ISBN 9781009158503. UK Internal Market Act 2020 imposed new restrictions on the ability of the devolved institutions to enact measures...mutual recognition and non-discrimination requirements mean that standards set by the legislatures in Wales and Scotland cannot restrict the sale of goods which are acceptable in other parts of the UK. In other words, imposing such measures would simply create competitive disadvantages for businesses in Wales and Scotland; they would not change the product standards or environmental protections applicable to all goods which can be purchased in Wales and Scotland.
  5. ^ Keating, Michael (2 February 2021). "Taking back control? Brexit and the territorial constitution of the United Kingdom". Journal of European Public Policy. 29 (4). Abingdon: Taylor & Francis: 491–509. doi:10.1080/13501763.2021.1876156. hdl:1814/70296. The UK Internal Market Act gives ministers sweeping powers to enforce mutual recognition and non-discrimination across the four jurisdictions. Existing differences and some social and health matters are exempted but these are much less extensive than the exemptions permitted under the EU Internal Market provisions. Only after an amendment in the House of Lords, the Bill was amended to provide a weak and non-binding consent mechanism for amendments (equivalent to the Sewel Convention) to the list of exemptions. The result is that, while the devolved governments retain regulatory competences, these are undermined by the fact that goods and services originating in, or imported into, England can be marketed anywhere.
  6. ^ Wolffe, W James (7 April 2021). "Devolution and the Statute Book". Statute Law Review. 42 (2). Oxford: Oxford University Press: 121–136. doi:10.1093/slr/hmab003. Retrieved 18 April 2021. the Internal Market Bill—a Bill that contains provisions which, if enacted, would significantly constrain, both legally and as a matter of practicality, the exercise by the devolved legislatures of their legislative competence; provisions that would be significantly more restrictive of the powers of the Scottish Parliament than either EU law or Articles 4 and 6 of the Acts of the Union...The UK Parliament passed the European Union (Withdrawal Agreement) Act 2020 and the Internal Market Act 2020 notwithstanding that, in each case, all three of the devolved legislatures had withheld consent.
  7. ^ Wincott, Daniel; Murray, C. R. G.; Davies, Gregory (17 May 2021). "The Anglo-British imaginary and the rebuilding of the UK's territorial constitution after Brexit: unitary state or union state?". Territory, Politics, Governance. 10 (5). Abingdon/Brighton: Taylor & Francis; Regional Studies Association: 696–713. doi:10.1080/21622671.2021.1921613. Taken as a whole, the Internal Market Act imposes greater restrictions upon the competences of the devolved institutions than the provisions of the EU Single Market which it replaced, in spite of pledges to use common frameworks to address these issues. Lord Hope, responsible for many of the leading judgments relating to the first two decades of devolution, regarded the legislation's terms as deliberately confrontational: 'this Parliament can do what it likes, but a different approach is essential if the union is to hold together'.
  8. ^ Dougan, Michael; Hunt, Jo; McEwen, Nicola; McHarg, Aileen (2022). "Sleeping with an Elephant: Devolution and the United Kingdom Internal Market Act 2020". Law Quarterly Review. 138 (Oct). London: Sweet & Maxwell: 650–676. ISSN 0023-933X. SSRN 4018581. Retrieved 4 March 2022 – via Durham Research Online. The Act has restrictive – and potentially damaging – consequences for the regulatory capacity of the devolved legislatures...This was not the first time since the Brexit referendum that the Convention had been set aside, but it was especially notable given that the primary purpose of the legislation was to constrain the capacity of the devolved institutions to use their regulatory autonomy...in practice, it constrains the ability of the devolved institutions to make effective regulatory choices for their territories in ways that do not apply to the choices made by the UK government and parliament for the English market.
  9. ^ Horsley, Thomas (2022). "Constitutional Reform by Legal Transplantation: The United Kingdom Internal Market Act 2020". Oxford Journal of Legal Studies. 42 (4). Oxford: Oxford University Press: 1143–1169. doi:10.1093/ojls/gqac018. PMC 9732217. PMID 36518972. The market access principles may not preclude the devolved administrations from legislating in the same way that, for example, the Devolution Acts make it unlawful (ultra vires) for the Scottish Parliament, Welsh Senedd and Northern Ireland Assembly to enact legislation [that] is contrary to Convention rights. Nonetheless, their prospective application under the UKIMA imposes significant practical limits on their political autonomy in areas of devolved competence—limits that the dominance of the far larger English market further reinforce.
  10. ^ Armstrong, Kenneth A. (May 2022). "The Governance of Economic Unionism after the United Kingdom Internal Market Act". Modern Law Review. 85 (3). Oxford: Wiley: 635–660. doi:10.1111/1468-2230.12706. So when used to disapply relevant requirements in a destination devolved jurisdiction the effect is different from that generated by the devolution statutes when they treat rules that are outside of competence as being 'not law'. In this way, the legislative competence of each jurisdiction is formally maintained, but its exercise constrained by the extraterritorial reach of regulatory norms applicable elsewhere in the UK and by the potential for regulatory competition where local producers are subject to local rules but competing goods can enter that market in compliance with the regulatory standards from where they originate
  11. ^ Lydgate, Emily (23 September 2020). Dr Emily Lydgate, University of Sussex: Evidence on the UK internal market bill. Finance and Constitution Committee (Report). Edinburgh: Scottish Parliamentary Corporate Body. 21st Meeting 2020, Session 5. Retrieved 15 October 2020. In that context, even though the new powers might not be used, I expect that the UK Government wants the legislation to be in place before those statutory instruments come into force, in case the common frameworks fall apart. What we are seeing is the UK Government responding to a threat by trying to centralise power or create a system that will function in case there is a problem...For example, England might authorise a new active substance for pesticides, or a new GMO, and would then be able to freely export those products to devolved nations, even if they had controls domestically. In so doing, England could competitively undercut producers and in effect undermine permitted divergence.
  12. ^ [1][2][3][4][5][6][7][8][9][10][11]
  13. ^ Sharma, Alok (16 July 2020). Policy paper: UK internal market (Report). Department for Business, Energy and Industrial Strategy. Retrieved 9 September 2020.
  14. ^ Russell, Michael (5 October 2020). Legislative Consent Memorandum: United Kingdom Internal Market Bill (PDF) (Report). Scottish Parliamentary Corporate Body. pp. 1–4. LCM-S5-47. Retrieved 15 October 2020.
  15. ^ Sim, Philip (15 September 2020). "What is the row over UK 'internal markets' all about?". BBC News. Retrieved 16 October 2020.
  16. ^ Cite error: The named reference AfterBr21 was invoked but never defined (see the help page).
  17. ^ Slawson, Nicola (12 September 2020). "Brexit: Gove claims internal market bill protects UK integrity from EU 'threat'". The Guardian. ISSN 0261-3077. Retrieved 12 September 2020.
  18. ^ "The Internal Market Bill: implications for devolution". Centre on Constitutional Change. Retrieved 12 September 2020.
  19. ^ Sheppard, Tommy. "Don't fall for Boris Johnson's big lie about the Internal Market Bill and its effect on devolution". The Scotsman. Retrieved 12 September 2020.
  20. ^ Armstrong, Kenneth (18 December 2020). "Governing With or Without Consent – The United Kingdom Internal Market Act 2020". UK Constitutional Law Association.
  21. ^ Cite error: The named reference BBC21WelshJR was invoked but never defined (see the help page).

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