United Kingdom Internal Market Bill — Exemptions from Free Internal Market Laws — Consultation with Devolved Administrations — 10 Dec 2020 at 14:44

The majority of MPs voted not to replace specific taxation, health and chemicals related exemptions to the laws intended to ensure a free internal market within the United Kingdom with a broader exemption for proportionate requirements which pursue legitimate aims; they also voted to require consultation with, but not consent from, devolved administrations in relation to many potential future changes to the free internal market laws.

MPs were considering the United Kingdom Internal Market Bill^[1][2].

The motion supported by the majority of MPs in this vote was:

• That this House agrees with the Lords in their amendments 8B, 8C, 8D, 8F, 8G, 8H, 8J and 8K, but disagrees with the Lords in their amendment 8L, insists on its disagreement with the Lords in their amendments 13 and 56, and proposes amendment (a) to the Bill in lieu of Lords amendments 8L, 13 and 56.

Lords amendment 8B^[3] stated:

• Page 5, line 28, leave out “consult” and insert “seek the consent of”

Lords amendment 8C^[3] stated:

• Page 5, line 29, at end insert—
• “(7A) If consent to the making of the regulations is not given by any of those authorities within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent.
• (7B) If regulations are made in reliance on subsection (7A), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned.

Lords Amendments 8B and 8C impact Clause 6 of the Bill^[4] which is titled: Relevant requirements for the purposes of the non-discrimination principle. The amendment supported by the majority of MPs in this vote requires consent to be sought from the devolved administrations prior to amending the scope of the non-discrimination principle, but does not require such consent to be obtained.

Lords amendment 8D^[3] stated:

• Page 7, line 4, at end insert—
• “(8A) Before making regulations under subsection (7), the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.
• (8B) If consent to the making of the regulations is not given by any of those authorities within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent.
• (8C) If regulations are made in reliance on subsection (8B), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned.”

This impacts Clause 8 of the Bill^[4] and requires the seeking of consent from the devolved administrations prior to making regulations varying the definition of "legitimate aim". (If a disadvantageous requirement imposed on incoming goods lacked a "legitimate aim" it is considered to breach the non-discrimination principle against goods from other parts of the United Kingdom). The amendment supported by the majority of MPs in this vote requires consent to be sought from the devolved administrations prior to amending the definition, but does not require such consent to be obtained.

Lords amendment 8F^[3] stated:

• Page 8, line 31, at end insert—
• “(4A) Before issuing, revising or withdrawing guidance under subsection (4), the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.”

This impacts Clause 12 of the Bill^[4] and relates to the issuing of guidance in relation to access for goods to the UK market.

Lords amendment 8G^[3] began:

• Insert the following new Clause—
• “Duty to review the use of Part 1 amendment powers
• (1) In this section “the Part 1 amendment powers” are the powers conferred by sections 6(5), 8(7) and 10(2) (powers to amend certain provisions of Part 1).
• (2) The Secretary of State must, during the permitted period—
• (a) carry out a review of any use that has been made of the Part 1 amendment powers,
• (b) prepare a report of the review, and
• (c) lay a copy of the report before Parliament.
• (3) In carrying out the review the Secretary of State must—
• (a) consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland,
• (b) consider any relevant reports made, or advice given, by the Competition and Markets Authority under Part 4, and
• (c) assess the impact and effectiveness of any changes made under the Part 1 amendment powers.

This relates to powers to amend the scope of the non-discrimination principle, and exclusions from the market access principle, in relation to the UK market for goods, and requires additional reporting and consultation steps.

Lords amendment 8H^[3] stated:

• Page 12, line 43, leave out subsection (4) and insert—
• “(4) Before making regulations under subsection (2), the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.
• (5) If consent to the making of the regulations is not given by any of those authorities within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent.
• (6) If regulations are made in reliance on subsection (5), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned.”

This relates to Clause 17 of the Bill^[4] which relate to regulations amending the exemptions to the free UK internal market for services. The amendment supported by the majority of MPs in this vote requires consent to be sought from the devolved administrations prior to amending the exemptions, but does not require such consent to be obtained.

Lords amendment 8J^[3] stated:

• Page 14, line 28, at end insert—
• “(8A) Before making regulations under subsection (7), the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.
• (8B) If consent to the making of the regulations is not given by any of those authorities within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent.
• (8C) If regulations are made in reliance on subsection (8B), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned.”

This relates to Clause 20 of the Bill and the amendment of the definition of "legitimate aim" in relation to requirements placed on service providers. A legitimate aim is one of the elements required for a requirement to not be considered discriminatory. The amendment supported by the majority of MPs in this vote requires consent to be sought from the devolved administrations prior to amending the definition, but does not require such consent to be obtained.

Lords amendment 8K^[3] stated:

• Insert the following new Clause—
• “Duty to review the use of Part 2 amendment powers
• (1) In this section “the Part 2 amendment powers” are the powers conferred by sections 17(2) and 20(7) (powers to amend certain provisions of Part 2).
• (2) The Secretary of State must, during the permitted period—
• (a) carry out a review of any use that has been made of the Part 2 amendment powers,
• (b) prepare a report of the review, and
• (c) lay a copy of the report before Parliament.
• (3) In carrying out the review the Secretary of State must—
• (a) consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland,
• (b) consider any relevant reports made, or advice given, by the Competition and Markets Authority under Part 4, and
• (c) assess the impact and effectiveness of any changes made under the Part 2 amendment powers.
• (4) The permitted period is the period beginning with the third anniversary of the passing of this Act and ending with the fifth anniversary.
• (5) If either of the Part 2 amendment powers has not been used by the time the review is carried out, this section has effect—
• (a) as if the report required by subsection (2), so far as relating to that power, is a report containing—
• (i) a statement to the effect that the power has not been used since it came into force, and
• (ii) such other information relating to that statement as the Secretary of State considers it appropriate to give, and
• (b) as if the requirements of subsection (3) did not apply in relation to that power.”

This relates to powers to amend the scope of the non-discrimination principle, and exclusions from the market access principle, in relation to the UK market for goods, and requires additional reporting and consultation steps.

Lords amendment 8L^[3], which was rejected in this vote, stated:

• Leave out Clause 10 and insert the following new Clause—
• “''Exclusions from market access principles: public interest derogations';
• (1) The United Kingdom market access principles do not apply to, and sections 2(3) and 5(3) do not affect the operation of, any requirements which—
• (a) pursue a legitimate aim,
• (b) are a proportionate means of achieving that aim, and
• (c) are not a disguised restriction on trade.
• (2) A requirement is considered to pursue a legitimate aim if it makes a contribution to the achievement of—
• (a) environmental standards and protection,
• (b) animal welfare,
• (c) consumer standards, including digital and artificial intelligence privacy rights,
• (d) employment rights and protections,
• (e) health and life of humans, animals or plants,
• (f) protection of public health, or
• (g) equality entitlements, rights and protections.
• (3) A requirement is considered disproportionate if the legitimate aim being pursued in the destination part of the United Kingdom is already achieved to the same or higher extent by requirements in the originating part of the United Kingdom.”

Lords amendment 56^[3], which was rejected in this vote, stated:

• Leave out Schedule 1

Clause 10 of the Bill^[4] operated with Schedule 1 to provide for exemptions to the Market Access Principles including matters related to tax, threats to human, animal or plant health, chemicals and fertilisers and pesticides, the rejected amendment sought to replace these specific exemptions with a broader exemption for proportionate requirements which pursue legitimate aims.

Lords amendment 13^[3], which was rejected in this vote, stated:

• Page 8, line 9, leave out subsections (6) and (7)

Hat it not been rejected in this vote this amendment would have impacted Clause 11 of the Bill which was titled: Modifications in connection with the Northern Ireland Protocol. The Bill provides for exemptions from the Market Access Principles to allow for restrictions aimed at preventing, or reducing, the spread of a pest or disease which is present in one part of the UK but not in, or is not so prevalent in, another.

Subsection (7), which was retained following this vote, relates to the operation of this exemption, and states:

• a pest or disease is to be taken to be present in Northern Ireland if it is, or may be, present in qualifying Northern Ireland goods (including when the goods are in Great Britain).

(Subsection (6) provides for subsection (7) to take effect).

Commons amendment (a) in lieu of Lords amendments 13,56, and 8L^[5] stated:

• Page 7, line 25, at end insert—
• “(4) Before making regulations under subsection (2), the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.
• (5) If consent to the making of the regulations is not given by any of those authorities within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent.
• (6) If regulations are made in reliance on subsection (5), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned.”

This impacts Clause 10 of the Bill^[4] which is titled Further exclusions from market access principles and empowers ministers to amend the list of exclusions from the United Kingdom market access principles. The amendment supported by the majority of MPs in this vote requires consent to be sought from the devolved administrations prior to amending the exclusions, but does not require such consent to be obtained.

Requirements applying to parts of the United Kingdom are likely to have been implemented by devolved administrations.

[The substantive element of this vote is relates to the scope of exemptions to the laws intended to ensure a free internal market. If a requirement to merely consult devolved administrations is present in the Bill or not is not considered substantive.]

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• [1] Parliament's webpage on the United Kingdom Internal Market Bill, Parliament.uk
• [2] Explanatory notes to the United Kingdom Internal Market Bill, 9 September 2020, Parliament.uk
• [3] Lords amendments to the United Kingdom Internal Market Bill, 10 December 2020, Parliament.uk
• [4] United Kingdom Internal Market Bill, as introduced to the House of Lords, 30 September 2020, Parliament.uk
• [5] Amendment paper. Commons Consideration of Lords Message as at 10 December 2020, Parliament.uk

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