Alex's Thoughts on the Internal Market Bill

"Let me begin my stating that I entirely understand why concerns have been expressed about this Bill. Notwithstanding the opinion of distinguished commercial law silk, David Wolfson QC, who wrote “No, this Bill does not amount to a breach of the rule of law”, it is absolutely right that questions are asked and this is considered with the utmost care. 

It is important to note that last night’s vote was simply on the Second Reading (main debate) of the Bill; the detailed consideration of the relevant sections will follow in the coming days. I will be working to get this Bill into a state which meets some of the concerns that have been addressed, and I will be considering any proposed amendments.

Before turning to the areas that have attracted particular attention, it should be noted that the overwhelming majority of this Bill (Parts 1,2,3,4,6 and 7) has nothing to do with the application of Treaty law. Instead it contains common sense measures to safeguard mutual recognition and non-discrimination within the UK. That’s necessary, because when EU law on food standards is superseded, we need to guard against the theoretical opening up of trade barriers within the UK.  

That could happen because the setting of many standards is devolved; accordingly, if there was divergence in the future between, say, Scotland and England, on food hygiene requirements, that could lead to de facto trade barriers – not something that we would want to see. So, as I say, this Bill implements mutual recognition and non-discrimination, and it was right to give the Bill a Second Reading on that basis alone - as indeed one 'objector' stated on the BBC Today programme. 

Part 5 

The issue instead stems from Part 5 of the Bill. It is important to note that the Bill itself does not change international law.  

Clause 42, for example, gives UK ministers the power to table regulations to disapply or modify exit summary declarations (and any other exit procedures) for goods moving NI–GB. At present that protocol requires exit summary declarations for goods moving NI-GB. But those regulations only come into effect if they too get through Parliament.

Second, it has been made clear that any powers under this Act are not intended to be used unilaterally, but only ever in response to an emergency. In practical terms, that emergency would eventuate where the EU had, in effect, themselves abrogated the Treaty.  

Were they to do so, it may become necessary for the UK to take immediate action to secure trade flows within the UK internal market. That’s why the Lord Chancellor referred to Part 5 as an insurance policy – or a “break glass in case of emergency” set of provisions. They are not a first resort, but a last resort. 

So why now, you may ask? Concerns have been expressed by the British chief negotiator about the EU’s refusal so far to guarantee the UK “third-country listing” for export of products of animal origin, citing “uncertainties” over our biosecurity controls. The implications of that potential refusal are enormous. It would mean that companies in GB would be unable to “export” to customers in NI, even though we are part of the same country.  

That would be unconscionable. It is also at odds with the grant of third-country listing in meat products to countries as diverse as Brazil, Israel, Namibia and Russia. It’s why, when the EU chief negotiator suggested on Twitter that the EU needed to know UK food standard rules before deciding whether to grant GB third country status, David Frost responded: 

 “the EU knows perfectly well all the details of our food standards rules because we are operating EU rules. The situation on 1.1.21 is accordingly perfectly clear. We have discussed this frequently with the EU including last week.” 

In other words, the UK remains committed to resolving disputes through the mechanisms set out within the Treaty – the joint committee and, if necessary, the arbitral mechanism. These measures are in place if, and only if, the Treaty has to all intents and purposes been abrogated, and the UK needs to safeguard its very integrity.  

Those who have studied the WA may be aware of the powers that exist under Article 12 to take short term unilateral action, but these could be insufficient to provide certainty and protect the integrity of the UK in the event of, say, a blockade. 

Next Steps 

The question now is whether we can agree with the EU a deeper trading relationship along the lines of the free trade agreement the EU has with Canada – or whether we have a trading relationship based on the 2019 deal without a free trade agreement on the lines of Australia’s.  

Progress has been made across a number of areas and the technical detail is well understood by both sides. The differences that remain are largely of a political nature and I am hopeful that these can be resolved."