Internal Market review provides opportunity to remodel the UK

Jonathan Edwards

As the Brexit debates raged in Parliament it dawned on me that the most ardent supporters of leaving the EU had given little or no thought to the impact on the UK constitution.

The no-dealers were completely negligent in their approach to the debate. There was no substance of any sort to their argument, they just kept on repeating that the UK should leave with no agreement and trade on World Trade Organisation terms.

Most of the thinking on the impact of specific Brexit decisions was done by the pro-European MPs, especially when Theresa May outlined her red lines.

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Internal Market

The decision to leave the Single Market meant that a new internal market would have to be created for the UK. As it happened, the new regime only applied to Great Britain as Boris Johnson’s deal effectively left Northern Ireland within the European economic frameworks and set the border on the Celtic Sea.

In early discussions with Ministers, I outlined they had two choices if they were going to leave the Single Market.

They could recentralise the responsibilities coming back from Brussels in Westminster or create a mini-EU for the UK whereby each constituent part (Wales, Scotland, England and Northern Ireland) would pool sovereignty on the returning powers with shared competency. Following the Scottish independence referendum, unionists would always talk about the UK being a “partnership of equals”, and the Brexiteers had promised Wales and Scotland a bonanza of powers from Brussels.

When the chance came the only Westminster party that understood how to turn the rhetoric into reality was the Liberal Democrats.

Both the Conservatives and Labour had near identical positions; power would be retained in Westminster. The only difference was that Labour argued that the Welsh and Scottish governments should be consulted on policy.

As I was fond of pointing out, joint responsibility is a different proposition to consulting.

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Vassal status

Much of the arguments employed by Boris Johnson was that they opposed the UK being subjected to vassal status by the EU. It didn’t register with them that was exactly what they were proposing for Wales and Scotland by centralising returning powers in Westminster, and particularly the creation of the new Internal Market.

It is with interest therefore that I read the excellent piece by Martin Shipton in Nation.Cymru that the UK Government is to review the workings of the Internal Market Act next year.

The issue for Wales and Scotland under current arrangements is that regulations our national parliaments pass could potentially be legally challengeable under the market access principles of the Act.

Indeed the Welsh Government challenged the Act in the Courts. In August 2022, the Counsel General Mick Antoniw said in a Ministerial Statement: “The Welsh Government remains clear in its opposition to the United Kingdom Internal Market Act 2020. It is an unwarranted attack on devolution and the right of the Senedd to legislate without interference in areas devolved to Wales. We will now consider how we can best take forward our challenge to the Act, to protect and assert the democratic right of this institution to make laws for the people of Wales.”

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Magnitude

Due to the magnitude of what is under consideration it is of concern that the review was announced solely in the form of a Written Statement by the Secretary of State for Business and Trade.

Written statements are vague on detail; an oral statement would have enabled MPs in the House to prise more detail. The Statement promises to consult with the devolved governments as a part of the review.

The key part of the Statement is the following “We will engage directly with the devolved governments as part of the review in a good faith process that seeks to balance the different policy choices that devolution affords us, while protecting the integrity of the internal market to ensure we can continue to drive for economic growth, jobs and higher living standards.”

The way to achieve both objectives is to share competence between Wales, Scotland and Westminster. I’m all for preserving the integrity of the internal market if my country, via my own national government, accountable to my national parliament, has responsibility for how that framework works. The added benefit of such an approach would be to ensure a race to the top on standards as opposed to the bottom.

Considering the robust position the Welsh Government took with the previous UK Government on the Act, now that their side is in charge the review becomes a major test for the Labour :Party.

The Welsh Government has an opportunity to make the case for strengthening the status of Wales within the Union. If Wales is an equal partner, then surely our national government should have a seat at the table on the regulatory bodies that govern the economic union which we reside within.

Jonathan Edwards was the MP for Carmarthen East & Dinefwr, 2010-2024