Tuesday, 15 September 2020

Internal Market Bill Second Reading ~ a note

The UK Internal Market Bill passed its Second Reading in the House of Commons on Monday 14 September. The vote was 340 to 263 (majority 77). 30 Conservative MPs abstained and two voted against the bill. See Hansard for the full debate. The House has therefore affirmed the bill in principle - (Erskine May para. 28.45). The next stage is Committee of the Whole House - UK Parliament UK Internal Market Bill and a number of amendments to the Bill have been tabled.

The Internal Market Bill contains a number of provisions (Clauses 42 to 45) which, if they become law and are actually applied, will place the UK in breach of the withdrawal agreement. Furthermore, it is arguable that the Bill itself is a breach of certain of the UK's obligations under the withdrawal agreement - for example, Article 5 (Good Faith) which requires the parties to refrain from "any measures which could jeopardise the attainment of the objectives of" the Agreement.

See also the article by Raphael Hogarth - The Internal Market Bill breaks international law and lays the ground to break more law.  

Against arguments that the UK is breaking international law are the views of Lord Keen of Elie QC (Advocate General for Scotland) as set out in evidence to the EU Security and Justice Committee on 15 September 2020. Keen pointed to Art 16 of the Northern Ireland Protocol  - (it starts at page 292 of the withdrawal agreement and Article 16 is at page 321).  Art 16 permits the UK to take appropriate safeguard measures if  application of the protocol results in certain conditions arising BUT those conditions (serious economic, societal or environmental difficulties or diversion of trade) cannot yet be said to have arisen.  Furthermore, action under Art 16 is expressly made subject to the procedure set out in Annex 7 which requires the UK to notify the EU of the problems encountered.

Previous posts relevant to this Bill are 10 September 2020, 11 September, and 12 September.


When Round 8 of the Future Relationship negotiations ended on 10 September, the EU's Chief Negotiator (Michel Barnier) issued a statement in which he said - "There are also many uncertainties about Great Britain's sanitary and phyto-sanitary regime as from 1 January 2021. More clarity is needed for the EU to do the assessment for the third-country listing of the UK."

Maybe this was just an effort to get the UK government to set out its position from 1 January 2021 on those matters. Nonetheless, Barnier's comment also indicated a possibility that the UK might not be given third-country listing even though, up to the end of 2020, the UK adheres to the same rules as EU member States. It appears to have been assumed by the UK government that third-country listing would be automatic.

The UK Internal Market Bill was first presented to Parliament on 9 September - the day before Barnier's statement and, in fact, the White Paper on the Bill was issued on 16 July 2020. The White Paper did not envisage any need for the UK to have legislation enabling Ministers to act contrary to the UK's obligations under the withdrawal agreement.

That was also the case with a further document issued in May 2020 -  The UK Government's approach to the Northern Ireland Protocol   This document emphasised that the UK's approach would be guided by the overall aim of preserving and strengthening Northern Ireland's place in the UK under the 1998 Good Friday (Belfast) Agreement. The document went on to say that the Protocol was designed as a practical solution to avoiding a hard border on the island of Ireland. The Protocol was not codified as a permanent solution and it contains a mechanism for the elected institutions in Northern Ireland to decide what happens to the Protocol alignment provisions in a consent vote with the first such vote to be held in 2024.  It is then stated unequivocally that - "Whilst the Protocol is in force, both the UK and the EU must respect and abide by the legal obligations it contains, as well as our other international law obligations."

Against this background, it is particularly hard to see why the government inserted into the Bill clauses 42 to 44 and the "notwithstanding" clause 45. 

Clause 42 - disapplication or modification of export declarations or other exit procedures. Refers to goods moving from Northern Ireland to Great Britain. Clause 43 - making Regulations which could disapply or modify the effect of Article 10 of the Withdrawal Agreement. Clause 44 on State Aid. Clause 45 seeking to render actions taken under Clauses 42(1) and 43(1) immune from legal challenge.

The Second Reading debate:

In the second reading debate, the Prime Minister sought to justify the Bill as "a safety net, ..an insurance policy, .. a very sensible measure." He said - " 

" .... I regret to have to tell the House that in recent months the EU has suggested that it is willing to go to extreme and unreasonable lengths, using the Northern Ireland protocol in a way that goes well beyond common sense simply to exert leverage against the UK in our negotiations for a free trade agreement ...."

The Prime Minister claimed that he still wanted to achieve a "Canada-style free trade agreement" but it was necessary for the government to have the powers in the Bill. He stated that the "EU has said that if we fail to reach an agreement to its satisfaction, it might very well refuse to list the UK’s food and agricultural products for sale anywhere in the EU". The intention of the Bill "is clearly to stop any such use of the stick against this country, and that is what it does."

During the second reading debate, the former Labour Party Leader Mr Edward Miliband MP stood in for the Leader of the Opposition (Keir Starmer). Miliband drew attention to a document issued by the Northern Ireland Affairs Committee - Unfettered access: Customs arrangements in Northern Ireland after Brexit: Government response to the committee's 1st report of Sessions 2019-20 - published 14 September 2020. 
The committee had recommended that the government set out, in a timely fashion, how it would facilitate unfettered access if it did not secure a waiver from export declarations and exit summary declarations in the Joint Committee. The government response is at para 16 of the document and the Minister stated that talks had begun in March and "continued throughout the summer in a spirit of good faith and mutual respect for the delicate arrangements in Northern Ireland.”
In the light of that statement, suggestions that the EU is not acting in good faith are all the more surprising.
The EU has requested the UK to withdraw the problematic clauses by the end of September. Although negotiations are on-going, it appears that the scene is being set for the Brexit process to end up with no future trading relationship with the EU. That would be the hardest of all hard Brexits and one which was certainly not sold to the electorate at the time of the referendum even if, as some believe, it was the true goal of some of the more ultra-Brexiteers. Given the likely economic and political consequences, it is still to be hoped that this does not come about and that good sense prevails.
The Bill still has some way to go and will not necessarily emerge from the Commons in its original form. Then there is the House of Lords where there is perhaps likely to be greater concern about the international law implications of Clauses 42 to 45.  The government is likely to argue that the Salisbury Convention applies to this Bill but, given the international law implications, it must surely be arguable that the conventon should not apply. Further, I would not be surprised to hear Ministers threatening reform of the Lords if they don't get their way.
This Bill prepares the ground for Ministers to breach international law and, when doing, be protected from challenge in the domestic courts. By allowing this Bill to proceed, MPs have significantly reduced the UK's position as an upholder of the international rule of law. 
15 September 2020  
Update 23 September:
The Bill passed its committee stage in the House of Commons. A number of amendments were made - including a requirement that Regulations under Clauses 42, 43 and 45 require House of Commons approval before they may commence.
Update 30 September:

The Bill completed its House of Commons stages on 30 September 2020. 

Update 30 September:

The Bill's First Reading in the House of Lords took place.

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