Devolution: The Withdrawal Bill and the concept of the UK Common Market

David Lidington’s speech on 26 February 2017 makes the promise of a ‘considerable offer’ to the devolved administrations in the form of a ‘very big change’ to the approach taken so far by HM Government to the repatriation of competences under the Withdrawal Bill. Under the original version of the Bill, Clause 11, which makes the exercise of devolved competence subject to the constraints of needing to respect ‘retained EU law’ (whilst the Westminster Parliament remains unshackled by any such requirement) effectively recentralises powers which have previously been devolved. The existing body of EU-derived rules continue to apply and constrain the devolved administrations and legislatures across policy areas which have previously been devolved to them, until such a point as Westminster or Whitehall agree to a release. In constitutional terms, the Clause moves the UK, in the opposite direction of travel to that of the last 20 years of devolution, which had been seeing an ongoing process concretising and solidifying of redistribution and resettlement of power and authority within the UK’s territorial constitution.

The Withdrawal Bill makes startlingly clear the vulnerabilities of this order against what may be a version of the UK constitution centred on a still all powerful notion of Westminster Parliamentary supremacy. The devolution settlements, set out in the Scotland Act, the Government of Wales Act and the Northern Ireland Act have all seen ongoing reform and expansion, confirmed through successive referenda, and have now reached the point where their institutions are acknowledged as permanent, with primary legislative powers to exercise across a range of devolved areas. But these settlements are contained in Acts of Parliament and under a reading of the UK constitution which continues to reify a parliamentary sovereignty located in Westminster alone there is little to defend them against being undone by another Act of Parliament, and potentially, and particularly controversially, by secondary powers under the Withdrawal Bill. Other approaches to understanding the locus of sovereignty and the status of the devolved nations are held, and the current period is one of that could see these crystalise and replace the Westminster norm, but to date the debate in Westminster and Whitehall has discounted them as yet unformed and at best imminent.

The Clause 11 restrictions have been justified by HM Government as being needed to provide stability and consistency as the scaffolding of EU law is knocked away. Until now, EU law and the discipline of the EU’s internal market has meant that the scope for differentiation within the UK has been minimised. Frameworks have been set by EU measures across the fields of agricultural policy, and environmental policy for example, which have placed limitation on how divergent the policy and law making by the different powers in the UK may be in those areas. As these frameworks are moved away from, HM Gov maintains there is a need to ensure that the devolved nations do not use their devolved powers in such a way as to create new barriers to trade within the UK – that they respect the ‘constitutional integrity’ of the UK’s internal or common market.

It is not yet clear what HM Government’s new form of Clause 11 looks like. It has said that the starting point now is that powers returning from Brussels are to devolved, rather than held at Westminster. An approach to the creation of common frameworks which would be considerably more sensitive to the approach taken to date would simply see the removal of the Clause 11 constraint on the devolveds to comply with retained EU law. As things currently stand, where frameworks are needed the Westminster Parliament could legislate, with devolved involvement drawn in through respect for the Sewel Convention. However, this does not go as far as the means of participation in matters of EU governance held by the devolved nations. They currently are able to engage directly and indirectly in the policy processes that set EU wide common frameworks within an EU governance system, which, crucially has a constitutional orientation towards subsidiarity, that decisions should be taken at the lowest effective level. There is a strong case to consider amendments to the Bill that write in formal mechanisms for devolved involvement in making of common frameworks, and that these extend to both intergovernmental and interparliamentary relations.

Observers of the EU will know just how powerful the legal concept of the EU’s internal market had been. To date, and through the adoption of harmonising legislation and through the reach of the enforcement of the free movement provisions, EU law has created a level playing field for trade across the Member States. But we need to acknowledge that this EU internal market does not necessarily demand uniformity, and gives space to local divergence and differentiation. That space for difference may be built into the legislation itself – whether in provisions of environmental legislation that allow for local variation, or in the rules of the CAP, which sees an increasingly ‘un-common’ approach to farming support and its related regulatory structures. Divergence may also be seen in the way the free movement provisions apply and the space for justification which may be afforded to protect local measures which hinder trade. So for example, Scotland may be recognised under EU internal market rules as being justified on public health grounds on introducing a minimum price per unit for alcohol – the public policy objectives outweighing the impact on trade, but what do we know about a U.K. internal market, and will it come with the guarantees that such protections can be recognised? The lack of transparency and any meaningful explanation of what the concept of the UK internal or common market is, beyond a ready appeal to it by politicians to justify harmonising UK wide measures is concerning.

It must be recognised that an internal market – any internal market, whether the UK’s or the EU’s – is not simply an economic construction, it is also profoundly political. It reflects a set of choices, about what will be valued and what interests will be protected against the pressures of ensuring freedom of movement. When looking at the EU, we know the free movement rights within its internal market are not unconditional. The internal market is placed in a constitutional setting alongside other objectives and principles, including the mainstreaming of equality, promoting environmental sustainability, and subsidiarity. The UK notion of a common market is not, as far as we are aware from the way it has been presented to date, grounded in anything like this. So we need to think about ways that these interests can be anchored down, that values can underpin a UK internal market. The adoption of amendments to the Withdrawal Bill which would provide for continued respect for such critical values should be strongly considered.  

All articles published on Click on Wales are subject to IWA’s disclaimer.

Dr. Jo Hunt is Reader in Law at Cardiff University.

Also within Politics and Policy