Devolution controversy over Internal Market Bill

Internal Market Bill
As the deadline for the UK to leave the EU draws ever closer fresh controversy surrounds the negotiations and government plans. Source: George Hodan (via NeedPix.com)
The government has announced a potential new Internal Market Bill. The bill has caused controversy with fears over devolution and Irish border.

By Tom Kingsbury, Dewi Morris, Morgan Perry and Hallum Cowell | Political Editors

With the Brexit deadline quickly approaching, UK and EU negotiators are attempting to create a deal with which the UK can exit the Union at the end of the year. 

This week has brought fresh scrutiny of the Brexit negotiations as the Internal Market Bill was unveiled on September 9, a document which could be used to override the Withdrawal Agreement. 

The potential new law has resulted in strong reactions from devolved nations and the EU.

The UK held a referendum on membership in the European Union in July 2016, voting 51% in favour of leaving the economic and political union. 

The impact of that vote is still keenly felt today as, over four years later, negotiation, controversy and argument is still in full swing on both sides of the divide. 

What is the Internal Market Bill?

On September 9, the government published a new Brexit law which would affect the customs arrangement between Northern Ireland and the rest of the UK. 

The bill would override a significant part of the EU Withdrawal Agreement relating to the current Northern Ireland customs protocol.

Downing Street has said the government is not planning to circumvent the 2019 agreement, and that the bill is only a standby for if trade talks with the EU fail.

The eighth round of talks resumed in early September, as the UK and EU look to reach an agreement allowing companies to trade without taxation and customs checks. 

Boris Johnson said in a statement yesterday that an agreement must be reached by October 15 if it is to be in force by the end of the year when the Withdrawal Agreement ends.

“If we can’t agree by then, then I do not see that there will be a trade agreement between us, and we should both accept that and move on.”

He described this as “a good outcome for the UK”, and said the UK will “prosper mightily” without a new deal.

The Internal Market Bill, first proposed in July, applies to trade between all four UK nations. 

It will particularly affect Northern Ireland, allowing ministers the power to subject certain goods to tariffs when passing between Great Britain and Northern Ireland if they are deemed at risk of passing to the EU.

It will also ensure that EU state aid, which compels governments to financially support homegrown businesses, will only apply to Northern Ireland.

The Irish border, a crisis in the making?

EU Border
Borders within the EU often have little, if no, infrastructure due to the single market and freedom of movement (Source: stux, via. NeedPix.com).

When the UK leaves the EU at the end of December the border between Northern Ireland and the Republic of Ireland will be the only land border with the EU in the British Isles. This creates quite a large problem for the UK and EU governments. 

In most cases, where political entities border one another, a physical border is put in place with the necessary customs checks, security and infrastructure. 

However, due to the Good Friday Agreement, which sought to end the political violence in parts of Ireland, a physical border would be in violation of international law. 

Because the UK previously subscribed to freedom of movement, and because free trade was enshrined in EU law, this has not been an issue, and customs checks have not been required at the border.

With the UK’s departure the political landscape has changed, however.

The plan for customs in Northern Ireland, announced in May 2020, would see Northern Ireland retain a number of EU regulations on trade, making it quasi-part of the EU’s single market.  Goods would then be checked when they entered ports in Wales, England and Scotland. 

Similarly some goods being sent from other UK nations to Northern Ireland would need checks performed on them before entering the EU.

The new Internal Market Bill would see this plan overturned if it were implemented.

“A treacherous betrayal”

European Commission President Ursula von der Leyen said in a tweet that she trusts the UK “to implement the Withdrawal Agreement, an obligation under international law and prerequisite for any future partnership”.

Michelle O’Neill, Northern Ireland’s Deputy First Minister, stated that “any threats of a roll back on the [Northern] Irish protocol would represent a treacherous betrayal which would inflict irreversible harm on the all-Ireland economy, and the Good Friday Agreement”.

Scottish First Minister Nicola Sturgeon tweeted:

But Downing Street said the law would only make “minor clarifications” and “remove ambiguity”.

The Government’s most senior lawyer announced on September 8 that he would resign over the Internal Market Bill. 

Later on the same day, the Northern Ireland Secretary, Brandon Lewis, told the House of Commons that the Internal Market Bill would “break international law” in a “specific and limited way”.

Fears over devolution in a post-Brexit world

There are fears within the devolved governments of the UK that Brexit could result in some powers being rescinded (Source: Rtadams, via. Wikimedia Commons).

Since the Act of Union in 1707, the internal market agreement has meant “open and unhindered trade” between UK nations. These were later replaced with EU laws when the UK joined in 1973.

When devolution was established in 1999, it was within the context of EU membership, and devolved governments could only make decisions under EU rules.

Once the UK’s transition period out of the EU comes to an end in December, EU laws will no longer apply to the internal market of the UK. 

This means devolved governments will technically have the power to establish their own rules on areas such as animal welfare, food and environmental standards.

However, the Internal Market Bill will give the central UK government unilateral control over internal UK trade, essentially replacing overarching EU laws and handing control of some areas to Westminster. 

This is despite a negotiated agreement between the Welsh and UK Governments in 2018, which entitled powers currently at EU level to be returned to Cardiff.

“Power over more issues than they have ever had before”

At the end of the transition period, laws handled by Brussels were due to be handed back to various parts of the UK. This included areas such as air quality and building energy efficiency.

However, the Internal Market Bill will also give Westminster the ability to spend money to replace programmes traditionally funded by the EU. 

A European Regional Development Fund plaque in Bargoed (Source: Jaggery, via. Geograph).

One of the biggest examples in Wales is the European Regional Development Fund, which has funded infrsutructre and social mobility projects. Wales previously had access to around £375m a year under the various schemes. 

If the bill is successful, Number 10 would once again have control over spending in areas such as infrastructure, sport, culture and education. 

Critics are worried that this will give Westminster the power it needs to push through projects like the M4 relief road, which was rejected by the Welsh Government last year over financial and environmental concerns. 

Jeremy Miles called the attempt to reclaim spending powers “an attack on democracy and an affront to the people of Wales, Scotland and Northern Ireland”. 

The Welsh Governmnet is concerned that handing back devolved spending powers to Westminster undermines the two devolution referendums, which saw the people of Wales vote in favour of a devolved government. 

“Under our plans the devolved administrations will have power over more issues than they have ever had before,” said the UK Government in response.

“Urgent assurance” needed

The proposed bill also focuses on the spending powers needed to enhance the UK’s internal market.

Despite the UK Government’s claim that the bill will “level-up every part of the UK”, ministers from devolved parliaments are concerned this means devolved spending powers will “roll back”.

Jeremy Miles told the BBC he had asked for “assurance” from Michael Gove that the UK Government was not “seeking to take for itself expenditure powers which are currently devolved”.

Mr Gove is yet to assure Mr Miles, however he has defended the bill as a “power surge” to devolved nations.

Cross-party campaign, Wales for Europe, highlights the concern for post-Brexit devolution.

Adam Price, leader of Plaid Cymru, summarised the bill as “not a power grab but a devo-smash” as the bill gives the UK Government powers to fund projects in Wales. Price also tweeted:

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