The Internal Market Bill was introduced by the UK government to prepare for the end of the Brexit transition period. At that point, the UK will leave the European internal market, including the common rules that support it. The main purpose of the Bill is to ensure the free movement of goods, services and the recognition of professional qualifications across the different parts of the UK once these EU rules no longer apply.
Some of these rules, for example over fair competition or workers’ rights, correspond to policy fields that, in the UK, are the responsibility of the UK parliament. The UK parliament and the government that leads it can decide to stay close to EU rules, which could make it easier to trade with European countries. Alternatively, they could decide to change the rules. Whatever decisions were made, these would be applied to the whole of the UK.
Other rules correspond to policy fields that, in the UK, are the responsibility of the devolved institutions. These mostly include policy areas that set standards that businesses have to meet, for example, building standards, product standards, environmental standards, animal welfare. The UK government is concerned that the UK’s four nations might develop their own, distinctive, rules and regulations and that this could make it harder for businesses to trade freely across the UK.
The Internal Market Bill is designed to prevent these barriers. Two principles are at the heart of the Bill. Mutual recognition ensures that goods or services that can be sold legally in any one part of the UK can be sold anywhere in the UK, without having to comply with local rules. Non-discrimination means that goods or services coming into one of the four nations from another must be treated the same as those produced locally.
Neither of these principles would alter the ability of the devolved parliaments to make their own rules. But, crucially, they could limit the effect that these rules would have.
For example, the Scottish Parliament, in an effort to improve public health, might set tougher rules on the kinds of ingredients that go into Scottish food production, and the information provided on food packaging. These rules would apply to goods produced in Scotland, but they would not, under the mutual recognition principle, apply to the many more goods sold in Scotland, but produced in, or imported into, other parts of the UK. This could make it much more difficult for the Scottish policy to achieve its goal of improving public health.
This potential to weaken the ability of devolved laws to make a difference has made the Bill very controversial. Other areas of controversy include the additional powers it gives to the UK government to spend in devolved areas and, especially, its intention to move away from some of the commitments made in the Withdrawal Agreement reached with the European Union, especially as these relate to Northern Ireland/Ireland protocol.