Select committee: Constitution Committee
17th Report - United Kingdom Internal Market Bill
Published 16 October 2020
Constitution Committee United Kingdom Internal Market Bill Report on parliament.uk ↗
At a glance31 recommendations and 51 conclusions · Government response published 23 December 2020 (deadline 16 December 2020)
The government's response
Summary written by Accountability Index from the government's response. It is not the government's own words.
The government states that it has "considered the Report's findings and recommendations in great detail" and that amendments to the Act "have sought to address the Committee's primary concerns", while maintaining that the Act is needed to protect seamless trade across the UK.
- On delegated powers, the government introduced a one-month consent period for the devolved administrations, and says that if consent is not received the Secretary of State "must publish a statement explaining why he has proceeded in the absence of consent".
- It removed the power in clause 3(8), saying it is "now content" that removal "will not substantially undermine" the internal market system, though its position "remains that the majority of the powers in the Act are needed".
- On financial assistance, it states the power "does not take away responsibilities from the DAs" and that it "intends to continue to work in partnership" with them. It does not accept a statutory duty to consult.
- Clauses 44, 45 and 47 were withdrawn following an agreement with the EU on the Northern Ireland Protocol. The government states the Act "is compatible with the ECHR".
What the committee recommended 82
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Sources
- 17th Report - United Kingdom Internal Market Bill ↗The committee's report, parliament.uk
- Government response to the Committee's report on the United Kingdom Internal Market Bill ↗The government's response, 23 December 2020, parliament.uk
Recommendations and conclusions 82
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1
While the United Kingdom’s departure from the European Union constitutes an exceptional circumstance, it does... Conclusion (the committee's words)While the United Kingdom’s departure from the European Union constitutes an exceptional circumstance, it does not justify failing to consult on the proposals in the United Kingdom Internal Market Bill at an earlier stage.
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2
It is regrettable that the consultation on the United Kingdom Internal Market Bill has been... Conclusion (the committee's words)It is regrettable that the consultation on the United Kingdom Internal Market Bill has been so limited. A consultation that is open for four weeks, with a bill published four weeks after it closes, does not allow the Government to engage a wide range of stakeholders; nor does it give time for adequate reflection.
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3
It is concerning that the devolved institutions consider the engagement they had with the UK... Conclusion (the committee's words)It is concerning that the devolved institutions consider the engagement they had with the UK Government on these proposals to have been poor. At a time when the Government is seeking to strengthen the Union, the handling of the United Kingdom internal market risks undermining those efforts and reducing trust.
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4
As the operation of the devolution arrangements and the respective power of the devolved institutions... Conclusion (the committee's words)As the operation of the devolution arrangements and the respective power of the devolved institutions are constitutional matters, we would expect to see them amended by primary rather than secondary legislation—or by using a statutory procedure that requires the consent of the devolved legislatures. It would also reassure the devolved administrations if changes to the internal market arrangements were subject to the parliamentary scrutiny brought to bear on primary legislation, which allows for amendments to be considered, and over a period of time which permits their views to be heard.
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5
The lack of specificity about the consultation requirements in the Bill is problematic. Recommendation (the committee's words)The lack of specificity about the consultation requirements in the Bill is problematic. The Government must set out the process for consultation with the devolved administrations on the management and adjustment of the internal market arrangements.
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6
The Government should explain why a joint decision-making process for adjusting the proposed internal market... Recommendation (the committee's words)The Government should explain why a joint decision-making process for adjusting the proposed internal market arrangements was not included in the Bill.
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7
It may be that the governance arrangements for policing the internal market will be determined... Conclusion (the committee's words)It may be that the governance arrangements for policing the internal market will be determined as part of the wider review of inter-governmental relations. However, if that is the UK Government’ s intention, it leaves a significant gap in the operation of the United Kingdom Internal Market Bill that must be addressed.
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8
The Government should explain why the Competition and Markets Authority is the right body to... Recommendation (the committee's words)The Government should explain why the Competition and Markets Authority is the right body to have oversight of the monitoring of the UK internal market and why an Office of the Internal Market could not have been established independently, under the joint control of the UK Government and the devolved administrations.
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9
The Government should seek to make the Office of the Internal Market more clearly accountable... Recommendation (the committee's words)The Government should seek to make the Office of the Internal Market more clearly accountable to the different legislatures in the UK.
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10
The Government should explain why such a broad power for the UK Government to spend... Recommendation (the committee's words)The Government should explain why such a broad power for the UK Government to spend money in devolved territories has been included in this Bill.
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11
The Government should explain how it intends to use the power in clause 48 to... Recommendation (the committee's words)The Government should explain how it intends to use the power in clause 48 to spend in devolved territories, what the processes would be for consulting the devolved administrations and how any such spending would affect block grant funding.
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12
If the Government intends to use the power to spend money in devolved areas for... Conclusion (the committee's words)If the Government intends to use the power to spend money in devolved areas for limited purposes, it must justify the broad scope of the power, which could be used with less restraint by future governments. In any event, to ensure practical cooperation around the use of the power, the Bill should be amended to include a requirement that ministers, in exercising their power to spend directly in devolved areas, consult with the relevant devolved administration.
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13
The UK Government must work intensively with the devolved administrations to amend and clarify the... Conclusion (the committee's words)The UK Government must work intensively with the devolved administrations to amend and clarify the proposals in the Bill in order to give the best chance of securing the legislative consent of the devolved legislatures.
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14
We consider that adhering to the principles agreed for formulating common frameworks would improve the... Conclusion (the committee's words)We consider that adhering to the principles agreed for formulating common frameworks would improve the likelihood of reaching agreement on how to progress the Bill. We are not convinced that opportunities for managing the UK internal market through the common frameworks process have been exhausted. This contributes to our doubts about the necessity for the Bill.
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15
The Government should explain why the Bill does not mention common frameworks and how it... Recommendation (the committee's words)The Government should explain why the Bill does not mention common frameworks and how it expects the arrangements for the UK internal market will relate to the common frameworks.
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16
The Government has failed to explain why a combination of retained EU law, its existing... Conclusion (the committee's words)The Government has failed to explain why a combination of retained EU law, its existing powers to amend that law, and common frameworks could not provide the certainty required at the end of the transition period to secure an effective UK internal market. Such an approach would obviate the need for the Bill.
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17
The Government should explain why, given the devolved administrations are required by the devolution statutes... Recommendation (the committee's words)The Government should explain why, given the devolved administrations are required by the devolution statutes to comply with international agreements ratified by the UK, the Bill is needed to ensure adherence to common standards for goods and services arising out of such agreements.
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18
The need for reform of intergovernmental relations and the lack of progress has damaged the... Conclusion (the committee's words)The need for reform of intergovernmental relations and the lack of progress has damaged the relationship between the UK Government and the devolved administrations. Better Joint Ministerial Committee structures and processes would foster a more open and collaborative approach to dealing with the challenges of operating the devolution arrangements in the new circumstances after EU membership. ( Paragraph 69)
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19
We recommend that the commencement of the United Kingdom Internal Market Bill should not take... Recommendation (the committee's words)We recommend that the commencement of the United Kingdom Internal Market Bill should not take place before the conclusion of the review of intergovernmental relations and the publication of the Dunlop review.
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20
We welcome the remarks of the Chancellor of the Duchy of Lancaster about listening to... Conclusion (the committee's words)We welcome the remarks of the Chancellor of the Duchy of Lancaster about listening to the concerns of and working with the devolved administrations on the Bill. These words need to be followed by actions: by amending the Bill, providing clarity and reassurance about some of its provisions, and taking steps to improve inter- governmental relations.
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21
The Government should explain how the consultation process for amending the relevant requirements for goods... Recommendation (the committee's words)The Government should explain how the consultation process for amending the relevant requirements for goods would work and how disputes would be resolved.
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22
We agree with the DPRRC that the power in clause 3(8) has not been justified... Conclusion (the committee's words)We agree with the DPRRC that the power in clause 3(8) has not been justified and should be removed from the Bill.
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23
The Government should set out its reasons for protecting existing, and not future, divergence and... Recommendation (the committee's words)The Government should set out its reasons for protecting existing, and not future, divergence and explain the types of divergence clause 4 would protect against that will not be addressed through common frameworks.
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24
The Government should set out its reasons for protecting existing divergence and explain how it... Recommendation (the committee's words)The Government should set out its reasons for protecting existing divergence and explain how it would expect the term “substantive” to be applied to future divergence in regulatory requirements.
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25
If devolved legislation is to be set aside automatically by the Bill, this in effect... Conclusion (the committee's words)If devolved legislation is to be set aside automatically by the Bill, this in effect curtails devolved competence. Such a change should be made only after consultation with the devolved institutions; as we noted at paragraphs 13–14, such engagement has been limited and unsatisfactory.
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26
The Government should explain why the Bill does not amend the devolution statutes explicitly to... Recommendation (the committee's words)The Government should explain why the Bill does not amend the devolution statutes explicitly to limit the competence of the devolved legislatures in respect of the non-discrimination principle.
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27
The Government should explain whether clause 6 seeks to constrain Parliament’s law-making power. Recommendation (the committee's words)The Government should explain whether clause 6 seeks to constrain Parliament’s law-making power. If clause 6 is not intended to constrain Parliament, the Government should explain why it is not framed more accurately as a limitation only on the devolved legislatures.
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28
The Government should explain why clause 6 treats legislation intended for England differently from that... Recommendation (the committee's words)The Government should explain why clause 6 treats legislation intended for England differently from that passed by the devolved legislatures.
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29
We agree with the DPRRC that the broad power in clause 6(5) has not been... Conclusion (the committee's words)We agree with the DPRRC that the broad power in clause 6(5) has not been justified and should be removed from the Bill.
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30
If clause 6(5) remains in the Bill, the Government should explain how the consultation process... Recommendation (the committee's words)If clause 6(5) remains in the Bill, the Government should explain how the consultation process for amending the non-discrimination principle would work and how disputes would be resolved.
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31
The Government should explain its reasons for the narrower set of legitimate aims in clause... Recommendation (the committee's words)The Government should explain its reasons for the narrower set of legitimate aims in clause 8(6) compared with the equivalent provisions in EU law.
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32
The House may wish to consider amending the list of legitimate aims in clause 8(6)... Conclusion (the committee's words)The House may wish to consider amending the list of legitimate aims in clause 8(6) to include some of the other purposes listed in Article 36 of the Treaty on the Functioning of the European Union.
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33
We agree with the DPRRC that the power in clauses 8(7) has not been justified... Conclusion (the committee's words)We agree with the DPRRC that the power in clauses 8(7) has not been justified and should be removed from the Bill.
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34
If clause 8(7) remains in the Bill, the Government should explain why there is no... Recommendation (the committee's words)If clause 8(7) remains in the Bill, the Government should explain why there is no duty to consult the devolved administration in respect of the power in clauses 8(7). In our view the Bill should be amended to include such a duty.
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35
The Government should set out its reasoning for protecting existing divergence and explain how it... Recommendation (the committee's words)The Government should set out its reasoning for protecting existing divergence and explain how it would expect the term “substantive” to be applied to future divergence. As with clause 4, the Government should explain what purpose is served by clause 9 that could not be achieved using common frameworks.
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36
The Government should justify why there is no consultation requirement for the exercise of the... Recommendation (the committee's words)The Government should justify why there is no consultation requirement for the exercise of the power in clause 10(2). In our view the Bill should be amended to include such a duty.
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37
We agree with the DPRRC that the power in clause 10(2) to amend schedule 1... Conclusion (the committee's words)We agree with the DPRRC that the power in clause 10(2) to amend schedule 1 is inappropriately wide and should be removed from the Bill.
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38
The Government should explain the need for this power to issue guidance and set out... Recommendation (the committee's words)The Government should explain the need for this power to issue guidance and set out what it could contain and how it would operate. If the Government can justify the power, it should be accompanied by a requirement to consult the devolved administrations before guidance can be issued or changed.
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39
The Government should explain how it would expect the term “substantive” to be applied to... Recommendation (the committee's words)The Government should explain how it would expect the term “substantive” to be applied to future divergence in regulatory requirements.
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40
The Government should justify why there is no consultation requirement for the exercise of the... Recommendation (the committee's words)The Government should justify why there is no consultation requirement for the exercise of the power in clause 17(2). In our view the Bill should be amended to include such a duty.
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41
We agree with the DPRRC that the power in clause 17(2) to amend schedule 2... Conclusion (the committee's words)We agree with the DPRRC that the power in clause 17(2) to amend schedule 2 is inappropriately wide and that it should be removed from the Bill.
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42
If clause 17(2) remains in the Bill, it should not allow for regulations under the... Conclusion (the committee's words)If clause 17(2) remains in the Bill, it should not allow for regulations under the made affirmative procedure.
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43
The Government should set out whether it considers that clause 19 restricts devolved competence. Recommendation (the committee's words)The Government should set out whether it considers that clause 19 restricts devolved competence. It should explain why the Bill does not amend the devolution statutes explicitly if the intent is to limit the competence of the devolved administrations in this way. ( Paragraph 108)
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44
The Government should explain whether clause 19 seeks to constrain Parliament’s law-making power. Recommendation (the committee's words)The Government should explain whether clause 19 seeks to constrain Parliament’s law-making power. If clause 19 is not intended to constrain Parliament, the Government should explain why it is not framed more accurately as a limitation only on the devolved legislatures.
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45
The Government should explain why clause 19 treats legislation intended for England differently from that... Recommendation (the committee's words)The Government should explain why clause 19 treats legislation intended for England differently from that passed by the devolved legislatures. ( Paragraph 110)
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46
We agree with the DPRRC that the power in 20(7) has not been justified and... Conclusion (the committee's words)We agree with the DPRRC that the power in 20(7) has not been justified and should be removed from the Bill.
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47
If clause 20(7) remains in the Bill, the Government should justify not including a requirement... Recommendation (the committee's words)If clause 20(7) remains in the Bill, the Government should justify not including a requirement to consult the devolved administrations in respect of the power in clause 20(7). In our view the Bill should be amended to include such a duty.
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48
The Government should explain why the Competition and Markets Authority may refuse to report on... Recommendation (the committee's words)The Government should explain why the Competition and Markets Authority may refuse to report on a provision which might affect the UK internal market and what reasons it would consider acceptable for such a refusal.
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49
The Competition and Markets Authority should be required to consult the UK Government and the... Conclusion (the committee's words)The Competition and Markets Authority should be required to consult the UK Government and the devolved administrations on its approach to these duties.
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50
We welcome the confirmation by the Lord Chancellor that information protected by legal professional privilege... Conclusion (the committee's words)We welcome the confirmation by the Lord Chancellor that information protected by legal professional privilege will not be required to be disclosed to the Competition and Markets Authority under the information-gathering powers in clause 38.
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51
We agree with the DPRRC that clauses 44(5) and 45(3)(e) are of extraordinary breadth and... Conclusion (the committee's words)We agree with the DPRRC that clauses 44(5) and 45(3)(e) are of extraordinary breadth and relate to matters which should not be the subject of secondary legislation. They are constitutionally inappropriate and should be removed from the Bill.
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52
We recommend that clause 53(2) is removed from the Bill. Recommendation (the committee's words)We recommend that clause 53(2) is removed from the Bill.
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53
We agree with the DPRRC that the delegated powers in the United Kingdom Internal Market... Conclusion (the committee's words)We agree with the DPRRC that the delegated powers in the United Kingdom Internal Market Bill are “extraordinary” and “ unprecedented”, and many of them are constitutionally unacceptable.
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54
The implications of the provisions of the United Kingdom Internal Market Bill for Northern Ireland... Conclusion (the committee's words)The implications of the provisions of the United Kingdom Internal Market Bill for Northern Ireland are potentially significant. They are also contested and difficult to assess without knowing how they will be used.
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55
Clauses 44, 45 and 47 authorise UK ministers to make regulations that would operate notwithstanding,... Conclusion (the committee's words)Clauses 44, 45 and 47 authorise UK ministers to make regulations that would operate notwithstanding, and therefore in violation of, relevant parts of the Northern Ireland Protocol. Any such regulations would place the UK in breach of its international obligations under the Withdrawal Agreement, which includes the Northern Ireland Protocol.
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56
The inclusion of a parliamentary hurdle before clauses 44, 45 and 47 may be commenced... Conclusion (the committee's words)The inclusion of a parliamentary hurdle before clauses 44, 45 and 47 may be commenced does not alter the inconsistency of these powers with the UK’s international obligations under the Withdrawal Agreement and Northern Ireland Protocol.
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57
Bringing clause 47 into force would be a repudiation of Article 4 of the Withdrawal... Conclusion (the committee's words)Bringing clause 47 into force would be a repudiation of Article 4 of the Withdrawal Agreement and hence place the UK in immediate violation of its obligations to ensure that certain provisions of the Withdrawal Agreement, and of EU law, are of direct effect and enforceable under UK law.
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58
Whether the making of the Bill by the UK Government , as distinct from either... Conclusion (the committee's words)Whether the making of the Bill by the UK Government , as distinct from either its commencement or the introduction of regulations under clauses 44 – 45, amounts to a violation of the UK’s obligations to act in good faith remains an open question of public international law.
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59
The enactment of the Bill in its current form would confer powers on ministers to... Conclusion (the committee's words)The enactment of the Bill in its current form would confer powers on ministers to disapply the Northern Ireland Protocol and unwind the supremacy of the Withdrawal Agreement in domestic law, in breach of Articles 4 and 5 of the Withdrawal Agreement. Notwithstanding the Lord Chancellor’s view that the powers were justified because there “could be a material breach by one of the parties” of their treaty obligations, as of now this would be incompatible with the UK’s international law obligations to act in good faith.
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60
Whether or not the UK may have previously breached its obligations under international law does... Conclusion (the committee's words)Whether or not the UK may have previously breached its obligations under international law does not justify further breaches of international law under the United Kingdom Internal Market Bill. It does not alter the rule of law implications of doing so.
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61
We consider the proposed breaches of international law in the United Kingdom Internal Market Bill... Conclusion (the committee's words)We consider the proposed breaches of international law in the United Kingdom Internal Market Bill unprecedented. We do not consider a ministerial refusal, due to legal uncertainty, to issue a statement of compatibility under the Human Rights Act 1998 to be analogous to the enactment of legislation authorising direct and unequivocal breaches of a recently concluded bilateral treaty.
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62
Enacting clauses 44, 45 or 47 of the Bill or making regulations under clauses 44... Conclusion (the committee's words)Enacting clauses 44, 45 or 47 of the Bill or making regulations under clauses 44 or 45 in contravention of the Northern Ireland Protocol could arguably qualify as material breaches of the Withdrawal Agreement under Article 60 of the Vienna Convention on the Law of Treaties.
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63
If the Withdrawal Agreement were to be terminated by the EU on the basis of... Conclusion (the committee's words)If the Withdrawal Agreement were to be terminated by the EU on the basis of a violation of its terms by the UK, this would unravel the policy behind the European Union (Withdrawal Agreement) Act 2020, passed by Parliament to implement the Agreement and the Northern Ireland Protocol.
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64
The Bill casts doubt on the UK’ s willingness to abide by its international commitments. Conclusion (the committee's words)The Bill casts doubt on the UK’ s willingness to abide by its international commitments.
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65
We agree that the UK is obliged to discharge its treaty obligations in good faith. Conclusion (the committee's words)We agree that the UK is obliged to discharge its treaty obligations in good faith. Such a policy is also part of our standing constitutional arrangements. We have previously concluded that “it is not appropriate for Parliament acting unilaterally as a national legislature to reinterpret … an international treaty to which the UK has become a party.”
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66
Viewed exclusively as a statement of domestic law, it is correct that Parliament may enact... Conclusion (the committee's words)Viewed exclusively as a statement of domestic law, it is correct that Parliament may enact legislation which violates the UK’s international obligations. However, this does not address the constitutional desirability of doing so.
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67
It is misleading for the Government’ s official legal position to suggest that the dualist... Conclusion (the committee's words)It is misleading for the Government’ s official legal position to suggest that the dualist doctrine of UK domestic law means that treaty obligations become binding only once they are enshrined in domestic legislation. International law operates, and binds nation states, irrespective of domestic enactment.
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68
Any suggestion that the rule of law is not threatened by the Bill because international... Conclusion (the committee's words)Any suggestion that the rule of law is not threatened by the Bill because international law is of different legal standing to domestic law under the dualist doctrine is untenable. We agree with Lord Bingham that respect for the rule of law requires respect for international law.
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69
The enactment of clauses 44, 45 and 47 would authorise clear violations of the UK’s... Conclusion (the committee's words)The enactment of clauses 44, 45 and 47 would authorise clear violations of the UK’s obligations in international law. The statements by the Government on the circumstances in which the powers in clauses 44, 45 and 47 would be used offer little reassurance, as those statements are not binding. No limitations on the use of these powers have been included in the Bill itself.
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70
Adherence to the rule of law is not negotiable. Conclusion (the committee's words)Adherence to the rule of law is not negotiable. The Government’s assurances do not alter the fact that the Bill authorises conscious and deliberate breaches of the UK’s obligations under international law. A government that brandishes the threat of breaching its international obligations, even in “specific and limited” circumstances, is one that undermines the rule of law.
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71
We are concerned that clause 47 seeks to alter the scheme provided in the HRA... Conclusion (the committee's words)We are concerned that clause 47 seeks to alter the scheme provided in the HRA without wider consideration of its constitutional implications and compliance with the UK’s international obligations under the Convention.
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72
The Secretary of State for Business, Energy and Industrial Strategy, Rt Hon Alok Sharma MP... Conclusion (the committee's words)The Secretary of State for Business, Energy and Industrial Strategy, Rt Hon Alok Sharma MP , and the Parliamentary Under Secretary of State at the Department for Business, Energy and Industrial Strategy, Rt Hon Lord Callanan , have each made statements under section 19 of the HRA that the Bill is compatible with the Convention rights. Those statements are difficult to reconcile with clause 47(2)(a), which exempts ministers from their usual duty to act in accordance with Convention rights when making regulations under clauses 44 or 45, and therefore casts doubt on the intended effect of clause 47(2)(a).
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73
Given existing case law on ouster clauses, it is not clear how a court would... Conclusion (the committee's words)Given existing case law on ouster clauses, it is not clear how a court would seek to interpret a clause that permits the possibility in principle of HRA challenges to regulations made under clauses 44 and 45 whilst limiting the practical utility of any such challenge. This threatens to draw the higher courts into an area of political controversy by requiring them to give meaning to a fundamentally unclear statutory provision.
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74
We are not persuaded by the Lord Chancellor’s construction of clause Conclusion (the committee's words)We are not persuaded by the Lord Chancellor’s construction of clause
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75
The rule of law requires that independent courts can adjudicate on the lawfulness of ministerial... Conclusion (the committee's words)The rule of law requires that independent courts can adjudicate on the lawfulness of ministerial action. The effects of clause 47 are unclear and relate to a fundamental aspect of the rule of law.
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76
Breaches of international law may occur when the ministerial powers under clauses 44 and 45... Conclusion (the committee's words)Breaches of international law may occur when the ministerial powers under clauses 44 and 45 are exercised to modify or disapply the Northern Ireland Protocol. That would represent a breach by ministers of their duty to comply with the law , as set out in the Cabinet Manual and the Ministerial Code.
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77
We are surprised by the Cabinet Secretary’s determination, referred to by the Lord Chancellor, that... Conclusion (the committee's words)We are surprised by the Cabinet Secretary’s determination, referred to by the Lord Chancellor, that ministers have acted in accordance with their responsibilities to comply with the law, given that the Bill authorises various breaches of the UK’s obligations under international law.
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78
The Government should set out how, if at all, it plans to amend the Ministerial... Recommendation (the committee's words)The Government should set out how, if at all, it plans to amend the Ministerial Code to clarify ministers’ duties regarding the rule of law and adherence to international law and treaty obligations.
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79
The Law Officers play a crucial role in advising the Government on the legality of... Conclusion (the committee's words)The Law Officers play a crucial role in advising the Government on the legality of its actions. Other ministers look to them , and to the Lord Chancellor, for guidance on the legal implications of the Government’s actions. Parliament may look to them for legal clarification and reassurance.
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80
It is essential that the Law Officers maintain the confidence not just of ministerial colleagues... Conclusion (the committee's words)It is essential that the Law Officers maintain the confidence not just of ministerial colleagues but of Parliament and the public. We are concerned that, by endorsing a course of action with the United Kingdom Internal Market Bill which ministers have acknowledged will break international law and the UK’s treaty obligations , this confidence has been undermined.
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81
Civil servants are under a duty to comply with the law. Recommendation (the committee's words)Civil servants are under a duty to comply with the law. The Government should not put them in a position where they risk breaching that duty.
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82
We do not doubt that Parliament has the legal authority to enact violations of the... Conclusion (the committee's words)We do not doubt that Parliament has the legal authority to enact violations of the UK’s international legal obligations. However, it does not follow that such action is consistent with the rule of law. Clauses 44, 45 and 47 explicitly authorise ministers to breach the UK’s obligations in international law and attempt to place significant limits on judicial review of certain regulations made under it. Those clauses represent a disregard for the rule of law.