Thursday, 10 September 2020

UK Internal Market Bill


This previous post (8 September) noted the controversy over whether the government was going to breach in any way the Withdrawal Agreement. Mr Brandon Lewis MP (Secretary of State for Northern Ireland) confirmed that the proposed Internal Market Bill would "break international law in a very specific and limited way."

 
On 9 September) the Internal Market Bill was published. The government issued this explanation of the purposes of the Bill. The explanation states -


"The UK Internal Market Bill will

guarantee companies can trade unhindered in every part of the UK as they have done for centuries, ensuring the continued prosperity of people and business across four parts of the UK, while maintaining our world-leading high standards for consumers, workers, food, animal welfare and the environment.


From 1 January 2021, powers in a range of policy areas previously exercised at an EU level will flow directly to the devolved administrations in Holyrood, Cardiff Bay and Stormont for the first time. This will give the devolved legislatures power over more issues than they have ever had before, including over air quality, energy efficiency of buildings and elements of employment law, without removing any of their current powers.


Once the Transition Period ends, rules that have regulated how each home nation trades with each other over the past 45 years will fall away. Without urgent legislation to preserve the status quo of seamless internal trade, rules and regulations set in Scotland, England, Wales and Northern Ireland could create new barriers to trade between different parts of the UK, unnecessary red tape for business and additional costs for consumers."


The House of Commons Order Paper for 9 September stated the purposes of the Bill -


"Bill to make provision in connection with the internal market for goods and services in the United Kingdom (including provision about the recognition of professional and other qualifications); to make provision in connection with provisions of the Northern Ireland Protocol relating to trade and state aid; to authorise the provision of financial assistance by Ministers of the Crown in connection with economic development, infrastructure, culture, sport and educational or training activities and exchanges; to make regulation of the provision of distortive or harmful subsidies a reserved or excepted matter; and for connected purposes."


Withdrawal Agreement:

 
Withdrawal Agreement (WA) and Political Declaration 

 
The Withdrawal Agreement governs, in international law, the EU-UK relationship.


The Northern Ireland Protocol is an integral part of the WA and will apply in full from the end of the Transition Period. The Protocol commences at page 292 of the WA.


The Withdrawal Agreement was concluded in October 2019 and is significantly different from the arrangements negotiated by the government of Theresa May during her time as Prime Minister.  A more detailed look at the Protocol is on this blog - 10 November 2019.


The preamble to the Protocol highlights the need for avoidance of physical infrastructure or related checks and controls and states that nothing in the protocol prevents the UK from ensuring unfettered market access for goods moving from Northern Ireland to the rest of the UK's internal market. 


EU Single Market and Customs Union:

 
As a member of the EU, the UK was within the EU's single market and customs union. Generally-speaking, those arrangements have continued to apply during the transition period.


After 2020, the transition period will have ended and the UK will be outside the EU single market and customs union. Relations between the UK and the EU will then be governed by the Withdrawal Agreement and by any other agreements existing between the UK and the EU - e.g. a "trade deal" if one is secured.


Devolution within the UK:

 
Powers are devolved within the UK to Scotland, Wales, and to Northern Ireland.


After the transition period, the fact of devolution means that there is a possibility of divergence in some areas (e.g. agricultural products) between the four parts of the UK.


The Bill:
United Kingdom Internal Markets Bill

 
The Bill is divided into 7 parts with a total of 54 clauses and 2 Schedules. Explantory Notes are available HERE.


In general terms, the Bill seeks to preserve the UK's internal market once EU laws no longer apply in the UK.


At this stage, rather than attempting an analysis of the entire Bill, it seems appropriate to focus on a number of particular issues of particular legal concern.


Clauses 42 to 45:



and Clause 45(4)

Here we have a Bill seeking to grant powers to Ministers of the Crown to make regulations about "exit procedures" (Clause 42) including those exit procedures which apply because of the Northern Ireland Protocol.


Ministers may (under Clause 43) make Regulations about State Aid and the regulations may dictate how Article 10 of the Northern Ireland Protocol is to be interpreted. Remember here that Article 10 is an item of international law. Perhaps even more crucially, the Minister will get domestic law powers to disapply Article 10 - that is, to disapply a treaty provision. Under Clause 44, ONLY the Secretary of State may give the European Commission a notification or information regarding State Aid.
 

By Clause 45, clauses 42 and 43 have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent. Regulations made under Clauses 42 and 43 are not to be regarded as unlawful on the grounds of any incompatibility or inconsistency with relevant international or domestic law.


The term relevant international or domestic law is amplified by Clause 45(4). In effect, the Bill appears to be an attempt to protect Ministerial Regulations from challenge in the courts on any ground including, it would appear from Clause 45(4)(g), common law grounds for judicial review.


 

 Professor Mark Elliott (Cambridge) was first off the mark with his post The Internal Market Bill - a perfect constitutional storm. Professor Elliott refers to clause 45 as "constitutional dynamite" and notes 


" ... Clause 45 also provides that regulations made under clauses 42 and 43 are to have effect if they breach the law deriving from the Withdrawal Agreement to which s7A of the EU (Withdrawal) Act 2018 gives direct effect and upon which it confers supremacy. Clause 45 thus not only resiles from specific provisions of the Northern Ireland Protocol: it also makes inroads into a fundamental legal feature of the 2018 Act which was inserted into it by the EU (Withdrawal) Agreement Act 2020 in order to give effect to a basic architectural aspect of the Withdrawal Agreement itself. In particular, Article 4 of the Withdrawal Agreement provides that certain provisions of the Agreement and of EU law ‘shall produce in respect of and in the United Kingdom [after Brexit] the same legal effects as those which they produce within the Union and its Member States’. Clause 45 of the Bill is flatly inconsistent with this key aspect of the Agreement. In this way, clause 45 lays bare the UK Government’s willingness to weaponize parliamentary sovereignty in order to renege not just on specific commitments but to undermine the broader legal scheme of the Withdrawal Agreement."

 
Elliott goes further -


"The second stick of constitutional dynamite found in clause 45 concerns judicial review. Clause 45 provides that regulations made under clauses 42 and 43 ‘have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent’. The definition of ‘relevant international or domestic law’ is nothing if not comprehensive. As well as including obvious candidates such as that Withdrawal Agreement, the Northern Ireland Protocol and EU law, it extends to international law, certain EU- and Brexit-related UK legislation and ‘any other legislation, convention or rule of international or domestic law whatsoever, including any order, judgment or decision of the European Court or of any other court or tribunal’. Attempting to immunise secondary legislation, such as regulations made under clauses 42 and 43, against challenge on such a broad range of grounds is extraordinary, and rams home the point that the Government is seeking to ensure that Ministers are equipped to breach international law. But the reference to ‘any … rule of … domestic law’ is also striking and can certainly be read as an attempt to exclude any judicial review on normal domestic law or human rights grounds of regulations made under clauses 42 and 43."


Elliott then considers whether Clause 45 is actually sufficient to oust judicial review. It may be but it is also arguable that it may not. The Bill - if it becomes law - therefore sets the scene for a further challenge throught the courts as to whether judicial review is or is not ousted.


This is an extradordinary Bill seeking to enable UK Ministers to legislate in disregard of international law and, in doing so, they would be able to claim that it was the will of Parliament so they had no choice in the matter ! The UK government is throwing the rule of law to the winds since, as Elliott concludes, the Bill is a "fundamental attack on the rule of law, and a diminution of the UK's commitment to the rules-based international order."


It cannot truly be said that any Minister supporting this Bill is actually respecting the Ministerial Code which requires respect for the law (including international law).  No self-respecting Attorney-General or Lord Chancellor should continue in office within a government seeking legislation seeking to unilaterally avoid an international commitment of the United Kingdom.


Former Prime Minister Sir John Major commented - "'Our signature on any Treaty or Agreement has been sacrosanct... If we lose our reputation for honouring the promises we make, we will have lost something beyond price that may never be regained.' That is, of course, the essence of the matter. International trust in the UK is at risk of being lost with unpredictable consequences for the future.

Links:
Withdrawal Agreement (WA) and Political Declaration 

 
The Northern Ireland Protocol is an integral part of the WA and will apply in full from the end of the Transition Period. The Protocol commences at page 292 of the WA.


UK Internal Market White Paper (https://www.gov.uk/government/publications/uk-internal-market) published on 16 July 2020 

UK and EU - Colin Murray (Reader in Public Law, Newcastle) - The Internal Market Bill and the Withdrawal Agreement 

EU Relations Law - Jack Williams (Monckton Chambers) -  Clause 45 of the Internal Market Bill: a striking attempt to exclude judicial review

ECIPE - David Henig - The UK traps itself in the EU relationship problems

The Irish Times - Ronan McCrea (Professor of Constitutional and European Law - UCL) - EU is losing leverage over a London no longer bound by its word 

House of Commons Library Research Briefing - Internal Market Bill 

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