LABOUR have announced a “fast-track” review of a UK act which the Scottish Government previously labelled the “the most significant and far-reaching assault on devolution since 1999”.
The post-Brexit Internal Market Act was passed by the Conservatives late in 2020 with the aim of ensuring there were no barriers to trade within the UK as a result of exiting the EU.
However, it drew legal action from the Welsh Government, which was backed by their SNP counterparts, as it was branded an “attack” on devolved government competence.
Strong opposition focused especially on a measure called “mutual recognition”. This said that any goods or services created within the UK can be sold anywhere within the UK – meaning for example that Scotland’s higher food standards could be undermined by English laws.
In March 2021, the Scottish Government said the passing of the act “constitutes the most significant and far-reaching assault on devolution since 1999”.
They went on: “The Scottish Government agrees that EU exit, which people in Scotland decisively rejected in 2016, raises a series of complex questions for the UK's constitutional arrangements. However the act offers, at every turn, the wrong answers to these questions.
“The act presents a prospectus for the unilateral exercise of power by UK ministers that is not necessary, and is incompatible with the aims and purpose of devolution.”
In October of this year, experts at UK in a Changing Europe noted that Labour had pledged to reset relationships with the devolved administrations, adding: “A meaningful reset of intergovernmental relationships must recognise and confront the problem of the United Kingdom Internal Market Act.”
On Thursday, the Labour Government said it would be fast-tracking a review of the act, accepting that it had caused “frustration”.
Labour said they would be seeking opinions from their devolved counterparts as part of the process.
The UK Government pledged to launch a review in January 2025 and complete it by summer 2025 – ahead of the legal deadline for a review by December 2025.
Deputy First Minister Kate Forbes said: “We note the UK Government’s intention to review the Internal Market Act. The Act is a major constraint on devolved competence, which was imposed on Scotland against the wishes of the Scottish Parliament.
“The Scottish Government is clear that the powers of the Scottish Parliament must be fully restored.”
Douglas Alexander, the Scottish Labour MP and Trade Policy Minister, said: “The UK internal market is essential for the UK economy, allowing people and business to buy and sell goods, provide services and work across the four nations of the UK.
“This UK Government is committed to engaging with the devolved governments, and we recognise frustration with how the UK Internal Market Act has operated in the past, particularly the lack of clarity in terms of how it operates.”
He added: “This government is delivering our Plan for Change with investment and reform to deliver growth and put more money in people’s pockets. Reviewing this act is a key part of that.”
The Scottish Government has been asked for their response.
