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
Part Two: Devolution Since 1999

Part Two: Devolution Since 1999

12. The devolution settlement voted for by people in Scotland in the 1997 referendum was a "reserved powers" model. This model established that a power is devolved to the Scottish Parliament unless expressly reserved to Westminster, significantly reducing the scope for disputes over competence. Importantly, there was no hierarchy of governments in the UK. The Scottish Government is accountable to the Scottish Parliament, elected by people in Scotland, not to the UK Government. UK Ministers have had no oversight of the decisions of the democratically elected and accountable Scottish Parliament and Government in devolved areas and apart from some very limited exceptions have no powers to intervene in their decisions.

13. That settlement is now in the process of being undermined by recent legislation at Westminster.

14. The competence of the Scottish Parliament has expanded over the last 20 years to include further tax powers and some aspects of social security policy, in a manner compatible with the model of devolution endorsed by people in Scotland in 1997. The Scottish Parliament and Government are responsible for making decisions on areas that matter to people in Scotland, ensuring decisions are made more locally to reflect Scotland's specific social, demographic, industrial, cultural, environmental and geographic circumstances.

15. Recent UK legislation has started to reverse this process with, for example, the reservation of state aid in the Internal Market Act.

16. Devolution has been of huge benefit to the political, economic[7] and social wellbeing of Scotland. It has enabled the Scottish Parliament and Government to set policy in areas of fundamental economic, social and cultural importance to Scotland, such as land reform; smoking and alcohol; free personal care; access to Higher Education; access to medicines; and stewardship of natural resources. These important issues have been addressed in ways that reflect Scotland's particular needs and circumstances, and the views of people in Scotland. Devolution has enabled successive Scottish Governments to set a vision for the kind of outcomes we want to achieve in Scotland – as voted for by people in Scotland.

17. As part of the EU single market, where importance is placed on pursuing local social policy objectives alongside economic growth, devolution in Scotland has allowed for a strategic policy approach that balances sustainable economic growth with wider social and environmental goals. Devolution has also led to policy innovation across the UK, with real value generated by diversity in policy making across the devolved legislatures.

18. The Scottish Government has set out its overall purpose, and performance outcomes and indicators, in the National Performance Framework. That purpose is:

"To focus on creating a more successful country with opportunities for all of Scotland to flourish through increased wellbeing, and sustainable and inclusive economic growth."[8]

19. In considering how to exercise its powers and responsibilities, the Scottish Government looks at the effect on these national outcomes as a whole. The UK Internal Market Act's narrower focus on "barriers" to trade or purely market considerations does not encompass these wider considerations under the National Performance Framework. There are many examples of devolved powers being used to effect market changes in pursuit of these wider policy objectives, including minimum alcohol unit pricing, a ban on the sale of raw milk on health grounds, banning the use of plastic cotton buds or microbeads in cosmetics and strict recycling targets.


Contact

Email: Eilidh.Macdonald@gov.scot