Publication - Strategy/plan

After Brexit: The UK Internal Market Act and devolution

Published: 8 Mar 2021

Devolution has benefitted Scotland hugely, allowing decisions that matter to people in Scotland to be taken here. Developments since the Brexit vote put this at risk - culminating in the UK Internal Market Act, which directly constrains devolution. This paper explains why and the choice we now face.

After Brexit: The UK Internal Market Act and devolution
Footnotes

Footnotes

1. Para 16, https://www.gov.uk/government/publications/uk-internal-market/uk-internal-market.

2. This approach sought to explore common ground with the UK Government around a solution that would protect Scotland's place in the EU single market from within the UK: https://www.gov.scot/publications/scotlands-place-europe/.

3. https://www.gov.uk/government/speeches/the-governments-negotiating-objectives-for-exiting-the-eu-pm-speech.

4. The Scottish Government's proposals set out a prospectus for a rebalancing of powers in the UK to take account of EU exit, with additional powers in areas like migration and employment rights coming to Scotland. These proposals were similarly rejected without meaningful consideration.

5. There has been some recognition at Westminster of the need for a fundamental cultural and attitudinal shift in how devolution is recognised and respected as a permanent part of the UK's constitutional arrangements. The Public Administration and Constitutional Affairs Committee for example produced a report in 2017 on Brexit and devolution that recognised the implications of EU exit for the UK's constitutional arrangements: Devolution and Exiting the EU: reconciling differences and building strong relationships - Public Administration and Constitutional Affairs Committee - House of Commons (parliament.uk).

6. Leader of the House of Commons' answer to Imran Ahmad Khan, House of Commons, 26 Nov 2020: Business of the House - Thursday 26 November 2020 - Hansard - UK Parliament.

7. See Annex C for analysis of economic performance during modern devolution.

8. https://nationalperformance.gov.scot/.

9. Written Statement: Legal challenge to the UK Internal Market Act 2020 (19 January 2021) | GOV.WALES.

10. Joint Ministerial Committee communiqué: 24 October 2016 - GOV.UK (www.gov.uk).

11. Brexit - gov.scot (www.gov.scot).

12. Coronavirus (COVID-19): the case for extending the Brexit transition period - gov.scot (www.gov.scot).

13. European Union (Withdrawal) Act 2018 (legislation.gov.uk).

14. European Union (Withdrawal) Bill - Parliamentary Business : Scottish Parliament.

15. SS. 30 and 63, Scotland Act 1998 (legislation.gov.uk).

16. THE UK WITHDRAWAL FROM THE EUROPEAN UNION (LEGAL CONTINUITY) (SCOTLAND) BILL - A reference by the Attorney General and the Advocate General for Scotland (Scotland) (supremecourt.uk); Continuity Bill update - gov.scot (www.gov.scot).

17. P17, Scotland's Devolved Settlement and the Role of the Courts (supremecourt.uk).

18. Scotland Act 2016 (legislation.gov.uk).

19. Scotland Bill (Hansard, 21 July 1998) (parliament.uk).

20. Post-Devolution Primary Legislation affecting Scotland (publishing.service.gov.uk).

21. The Smith Commission Report-Overview (parliament.scot).

22. Para 148, R (on the application of Miller and another) (Respondents) v Secretary of State for Exiting the European Union (Appellant) and 2 Judicial Reviews (supremecourt.uk).

23. Para 151, ibid.

24. https://news.liverpool.ac.uk/2018/03/02/watch-professor-michael-dougan-uks-internal-market-dependent-eu-rules/.

25. UK internal market (publishing.service.gov.uk).

26. Para 72, ibid.

27. Joint Ministerial Committee communiqué: 24 October 2016 - GOV.UK (www.gov.uk).

28. Welsh Government, letter to the Duchy of Lancaster & Alok Sharma, 7 July 2020: https://gov.wales/sites/default/files/inline-documents/2020-07/letter-to-gove-and-sharma.pdf.

29. Devolved administrations were given no advance copy of the proposals, despite the far-reaching implications for devolution.

30. United Kingdom Internal Market Act 2020 (legislation.gov.uk).

31. Para 75 highlights that similar provisions apply to goods, under section 8.

32. When the Internal Market Bill was originally introduced, it contained provisions that would have allowed for UK Ministers to act in conflict with international law by acting in contradiction to the EU Withdrawal Agreement in respect of the Northern Ireland Protocol. It would have enabled the UK Government to disregard parts of the Protocol agreement with the EU on state aids, unfettered Northern Irish access to British markets and tariffs on goods moving from Great Britain to Northern Ireland. The EU launched infringement proceedings against the UK Government in respect of this part of the Bill and the Withdrawal Agreement; and the relevant clauses received criticism in the House of Lords with peers removing them. The UK Government initially reintroduced the clauses, but eventually conceded to further amendments from peers which stripped the clauses from the Bill.

33. New UK Shared Prosperity Fund to bypass Holyrood - BBC News.

34. New Turing scheme to support thousands of students to study and work abroad - GOV.UK (www.gov.uk).

35. UKIM,Briefing,Paper,-,Prof,Michael,Dougan,15,September,2020.pdf (liverpool.ac.uk).

36. Consolidated version of the Treaty on the Functioning of the European Union (legislation.gov.uk).

37. For example, in Wales, concerns have been raised that the UK Government could act in direct conflict to the Welsh Government's decision not to build an M4 relief road: M4 relief road: UK ministers 'could bypass Welsh Government' - BBC News.

38. Scottish Replacement For EU Structural Funds - gov.scot (www.gov.scot).

39. MEPs ask if Scotland, Wales can rejoin Erasmus student program – POLITICO.

40. Scotland Act 2016 (legislation.gov.uk).

41. Scottish Parliament Environment, Climate Change & Land Reform Committee, Stage 1 Report on the UK Withdrawal from the European Union (Continuity) (Scotland) Bill, p8-10, Stage 1 report on the UK Withdrawal from the European Union (Continuity) (Scotland) Bill (parliament.scot); Scottish Parliament Finance & Constitution Committee, Stage 1 Report on the UK Withdrawal from the European Union (Continuity) (Scotland) Bill, p14-15, Stage 1 Report on the UK Withdrawal from the European Union (Continuity) (Scotland) Bill (azureedge.net); same, letter to Duchy of Lancaster, 6 October 2020, FOR_ISSUE_Internal_Market_Bill_LCM_report(4).pdf (parliament.scot).

42. SCVO, 25 Jan 2021, Scotland and the Shared Prosperity Fund – SCVO.

43. Para 125, the UK Internal Market White Paper, UK internal market (publishing.service.gov.uk).

44. www.gov.scot/publications/scotlands-role-development-future-uk-trade-arrangments/pages/1/.

45. This is on a provisional basis on the EU side: pending ratification of the European Parliament.

46. Gordon Brown: Trust has broken down in way UK is run - BBC News; Keir Starmer: only a federal UK 'can repair shattered trust in politics' | Politics | The Guardian.

47. https://www.gov.scot/publications/scotlands-place-europe/.

48. Para 10, the UK Internal Market White Paper, UK internal market (publishing.service.gov.uk).

49. https://www.parliament.scot/S5_Finance/General%20Documents/Summary_of_Comparative_research.pdf.

50. https://www.parliament.scot/S5_Finance/General%20Documents/201908_FINAL_Canadian_Internal_Market_Research.pdf.

51. https://www.boe.es/buscar/pdf/2013/BOE-A-2013-12888-consolidado.pdf.

52. Para 58, p28, UK internal market (publishing.service.gov.uk).

53. For example, para 60, p28, ibid.

54. Ibid.

55. P174, Christopher Whatley, Scots and the Union: Then and Now (Edinburgh: Edinburgh University Press. 2nd edition, 2014).

56. Sir Archibald Sinclair, The state of the nation enquir'd into, shewing, the necessity of laying hold of the present opportunity, to secure our laws and liberties, from English influence; and procure a free trade with that nation (Edinburgh; n.d., ca. 1704).

57. See T.M. Devine, Scotland's Empire 1600-1815, London; 2003, c3; Linda Colley, Britons: Forging the Nation 1707-1837, London; 1992, P 117-145.

58. Colin Kidd, Union and Unionisms: Political Thought in Scotland 1500-2000, Cambridge; 2008, p27.

59. https://www.gov.scot/collections/economy-statistics/#productivitystatistics.

60. Ibid.

61. the Annual Survey of Hours and Earnings (ASHE).

62. Ibid.

63. National Performance Framework | National Performance Framework.

64. Scotland's Economic Strategy - gov.scot (www.gov.scot).

65. Annex A, UK internal market (publishing.service.gov.uk).

66. Germany - OECD Data; United Kingdom - OECD Data.


Contact

Email: Eilidh.Macdonald@gov.scot