Internal Market Act 2020: position paper

International comparators

49. While internal markets in other multi-level devolved or federal states have of course developed in their specific histories and context, there are important lessons to learn in comparing these examples to the UK Internal Market Act.

50. Academics have noted that the UK’s Internal Market Act is an outlier when compared to other internal market regimes,^[21] and that, “whilst the legislation draws on familiar tools of internal market management, it does so in a way that is ill-adapted to the distinctive features of the UK, wherein one territory, England, is so much larger in market terms than the rest”.^[22]

51. The Act affords less autonomy to its constituent units in shaping market regulations and has far less in the way of automatic exemptions or derogations from Market Access Principles. A comparative assessment of its provisions stated that the ways in which the IMA ‘departs from existing blueprints’ has resulted in an internal market that is ‘marked by a high degree of centralisation, substantial means of political control, a simultaneous propensity towards judicialisation and a far-reaching potential for deregulation’.^[23]

52. The IMA is distinct from internal market regimes elsewhere in the world, whether in terms of reaching consent prior to implementation, meaningful consent provisions underpinning its operation, or ensuring sensible, proportionate derogations and exceptions to the general application of market access requirements.

53. These differences are explored in more detail in the annex to this paper.

Recommendation 8: Commission further research into how a proportionate and agreed alternative model of regulatory co-operation can learn from international comparators. The IMA is an outlier when compared with market regimes in other multi-level devolved or federal states, which manage to protect local regulatory autonomy and ensure market efficiencies without the rigid centralisation, legal uncertainty and arbitrariness of the IMA.