CCC Director, Michael Keating, responds to the UK Government's Internal Market Bill, explaining the impact this is likely to have on devolution and the devolved settlements.
The UK devolution settlement has always been open to two interpretations. One is that the United Kingdom remains a unitary state in which Westminster has merely ‘lent’ powers to Scotland, Wales and Northern Ireland and can take them back at any time. Evidence for this includes the declarations that Westminster’s ability to legislate is unaffected and, the Supreme Court Ruling in the Miller case on the Sewel Convention that it would normally do this only with the consent of the relevant devolved legislature is merely a ‘political’ convention with no binding force.
The other interpretation is that it is not a unitary state, but a union of nations. Devolution builds on this and represents a major constitutional reform, taking the UK in a federalizing direction, if not quite creating a federation. Evidence for this is the rather clear division of powers, with Westminster only having reserved powers and everything else being devolved. Provisions in the revised Scotland and Wales Acts, which recognize the Sewel Convention in statute, and pledged that their parliaments are permanent features which can be abolished only by referendums in those nations, gives further credence to this interpretation.
The UK Governments Internal Market of July describes the United Kingdom as a ‘unitary state’. The Internal Market Bill, published on 9 September, follows through on this logic. It may or may not add up to a ‘power grab’, depending on how the new powers are used but it certainly changes the nature of the settlement.
The 1999 devolution settlements for Scotland Northern Ireland and later provisions in Wales, are based on the ‘reserved powers’ model. That is, a clearly defined list of competences is reserved to Westminster and everything else is devolved. There is no hierarchy of laws, under which Westminster ones prevail. While Westminster could legislate in devolved areas and take back powers, it did not do so.
EU law is based on different principles. In areas where the EU is competent, its laws prevail over both state and sub-state law. Its competencies have expanded over the years, especially in pursuit of the Internal Market programme. This ‘competence-creep’, however, is constrained by the fact that laws are made in the Council of the EU, representing the member states, and approved in the European Parliament. They must respect the principles of subsidiarity (that measure must be taken at the lowest level possible) and proportionality (they must be no more detailed than necessary). National parliaments and, in some circumstances, sub-state governments, can appeal to the Court of Justice of the EU if they view that these principles have been violated.
The Internal Market Bill imports this logic into the UK devolved system, except that the decision-maker will not be a body representing the nations but UK Ministers and the Westminster Parliament. It gives ministers powers to regulate a potentially wide range of otherwise devolved matters in the name of the internal market, a concept which the UK Government itself will define and elaborate, with the assistance of the Competition and Markets Authority, which it appoints. Ministers will gain sweeping powers and can get more, through statutory instrument rather than primary legislation.
The mutual recognition principle, which applies to all four parts of the UK, will also serve to strengthen the centre. It provides that goods, services and professionals meeting the standards of any part of the UK can be traded or work in all the others. As England is by far the largest part, and the UK Government sets the rules there, it will gain further sway.
Further powers are given to UK ministers to spend in devolved areas. It is true, existing powers can be used for this purpose but the new provision is sweeping and obviously intended to be used. UK ministers can also attach conditions to such spending, which is not the case with the present transfers under the block grant and the Barnett Formula.
So the UK will gain more powers and it will exercise them on its own. There is no equivalent in the UK to the binding subsidiarity and proportionality principles in the EU.
This is all part of a new activist unionism, aimed at reinforcing the role, and the visibility of the UK Government in the devolved areas. It moves away from the federal-type of logic that seemed to be gaining ground after the 2014 referendum as a compromise between unionism and nationalism and indicates a return to a more unitary conception of the state.