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Chamber and committees

Constitution, Europe, External Affairs and Culture Committee

UK Internal Market

Letter from Convener to the Minister for Intergovernmental Relations, 22 February 2022

UK Internal Market

Dear Mr Gove

The Constitution, Europe, External Affairs and Culture Committee has today published a report on our inquiry into the UK internal market: UK Internal Market Inquiry | Scottish Parliament.

We identified three significant and interrelated tensions arising from and/or exacerbated by the UK leaving the EU –

  • First, tension between open trade and regulatory divergence;
  • Second, tension within the devolution settlement;
  • Third, tension in the balance of relations between the Executive and the Legislature.

The Committee recognises, in relation to the first of these tensions, the economic benefits for businesses and consumers in ensuring open trade across the UK.

But equally we recognise that the fundamental basis of devolution is to decentralise power so as to allow policy and legislation to be tailored to meet local needs and circumstances. The Committee believes that policy innovation and regulatory learning are one of the key successes of devolution.

Our view is that it is essential, as recognised by the Joint Ministerial Council (JMC) in 2017, that devolution, outside the EU, continues to provide “as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory as is afforded by current EU rules.”

The Committee recognises that UKIMA seeks to address the first tension. But from the clear consensus in the evidence we received it is the Committee’s view that UKIMA places more emphasis on open trade than regulatory autonomy compared to the EU Single Market. It is also the Committee’s view that this has led to tensions within the devolved settlement.

On this basis the Committee invites the UK Government to explain how in its view UKIMA will provide “as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory as is afforded by current EU rules.”

The Committee also invites you to respond to the weight of evidence in our report which suggests that UKIMA undermines the devolution settlement. Specifically, the Committee would welcome your response to the following(1) –

  • The clear consensus within the evidence which the Committee received that UKIMA places more emphasis on open trade than regulatory autonomy compared to the EU single market;
  • The animal protection charity, Onekind’s view that UKIMA “undermines devolution and will limit the ability to the Scottish Parliament and Government to improve farmed animal welfare standards”;
  • Scottish Health Action on Alcohol Problems’ view that UKIMA “could create risks for the integrity of the existing devolution settlement”;
  • Professor Armstrong’s view that the Act “places too much emphasis on market liberalisation over local rights to regulate”;
  • The Institute for Government’s view that UKIMA “has fewer and much more narrowly defined exemptions, and therefore places new constraints on the governments of the UK”;
  • Professor Weatherill’s view that UKIMA “contains a structural bias in favour of market access, and against local regulatory culture”;
  • Professor McEwen and colleagues’ view that UKIMA “arguably creates a powerful disincentive to engage in legal reform or policy innovation, in response to changing social and economic” preferences;
  • Dr McCorkindale’s view that the Subsidy Control Bill “cuts across devolved competence in significant ways”

The Committee recognises that Common Frameworks have the potential to resolve the tensions within the devolved settlement through managing regulatory divergence on a consensual basis while facilitating open trade within the UK internal market.

But the Committee believes there is a risk that the emphasis on manging regulatory divergence at an inter-governmental level may lead to less transparency and Ministerial accountability and tension in the balance of relations between the Executive and the Legislature.

The Committee is concerned that this may result in reduced democratic oversight of the Executive and a less consultative policy-making process. Our view is that there is a need for a much wider public debate with regards to how to deliver appropriate levels of parliamentary scrutiny and public and stakeholder engagement at an inter-governmental level especially in relation to the operation of common frameworks.

The Committee, therefore, invites the views of the UK Government on how to resolve this tension and ensure appropriate levels of public and stakeholder engagement and parliamentary scrutiny of inter-governmental working especially in relation to the operation of common frameworks.

The Committee also invites you to appear before us to consider further the issues raised in our report and your written response. It would be helpful if you officials would liaise with our clerks to find a mutually convenient date.

Yours Sincerely

Clare Adamson MSP, Convener of the Constitution, Europe, External Affairs and Culture Committee

 

  1. Donald Cameron MSP and Maurice Golden MSP dissented from this paragraph

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