The overall purpose of the UK Internal Market Bill is to ensure that businesses across the whole of the United Kingdom will continue to enjoy seamless internal trade, as they have done for centuries, after the transition period ends on 31st December 2020. Hundreds of powers previously exercised at EU level will flow directly to the UK Government and the devolved administrations in Cardiff, Edinburgh and Belfast. To allow each home nation to take full advantage of these new opportunities, and to ensure businesses can continue to trade freely across the UK, the Government needs to legislate to prevent any new barriers to trade from emerging within the UK as EU law falls away. The Bill contains a Market Access Commitment to give UK businesses certainty that their goods and services can be traded seamlessly in all home nations. This will mean there is no difference in internal trade arrangements for businesses when the Transition Period ends, meaning total continuity and total confidence for businesses, consumers and investors across the UK.
The purpose of the Bill is therefore fundamental to the integrity of the UK and I believe it is in the national interest to support it. However, I am aware that clauses within the Bill that have attracted considerable media interest and debate, and have also caused concern for some constituents.
Regarding the Bill’s relation to international law I would make two points here. First, it is my view that those parts of the Bill causing such concern are ‘in extremis’ measures that would in effect only be used if the EU were itself to act in a way, if not explicitly in breach of international law, that would nevertheless be a breach of all senses of what is acting reasonably and ‘in good faith’ (as required by the Withdrawal Agreement). Secondly, I do think we have to emphasise that those same measures do not arise at all if a deal were agreed. I remain confident that a deal will be agreed because it is in the mutual interest of both parties to come to terms, even if it is clear from this Bill that we are sending a powerful message that those terms must be acceptable to the United Kingdom, and that we will do what we have to in order to protect the integrity of the United Kingdom if terms cannot be agreed.
For this reason, whilst I respect that many will be focused on legalistic aspects of the Bill, I believe it is its relation to the model of departure we are seeking to negotiate that is most important as a context for the measures set out. Both post-referendum Prime Ministers May and Johnson committed to leaving the EU by way of exiting both the Single Market and Customs Union. During the deadlock and debate that struck our attempts to negotiate our departure post the 2017 election, a series of models for leaving came forward seeking to find that elusive Parliamentary majority. None succeeded and we ended up in a Christmas general election that finally broke the deadlock. The crucial conundrum that stopped everything until then was that the country had voted to leave and so no longer wanted to be governed by EU rules, especially as we would not have a say in them once we had left, but that in leaving the Single Market and Customs Union we would inevitably require new border checks (e.g. customs declarations) to some degree, with all that implied on the island of Ireland – and importantly, in terms of our ‘frictionless’ trade through Dover. In essence, at the election Britain elected with a powerful mandate a Government that had coalesced around a ‘Canada’ style model of departure. You might call this ‘free trade and a free country’: a ‘free trade agreement’ of the kind the EU has agreed with many nations, without such deep economic co-operation as a near nation might expect but without any supranational imposition of rules on our people, yet keeping trade tariff and quota free. It has become ever more clear in recent weeks that this is the right choice because it is the only one that balances both the maintenance of economic ties and true political separation. To leave and yet be subject to rules over which we would have no say would not be tenable, practicable or politically (and therefore economically) sustainable; and I know that many on all sides of this argument accept that. Yet I have always argued that the best way to leave remains by agreeing terms that are satisfactory to both sides, i.e. through a negotiated settlement, thus ensuring that free trade is maintained between us and our largest trading partner.
Crucially, as far as the IM Bill is concerned, the EU has accepted the idea of a Canada deal, and even offered ‘Canada plus’. Yes, if we had asked for frictionless trade like being in the Single Market and Customs Union the EU would have said, ‘fine, but you follow our rules, you can’t have your cake and eat it’. Instead, we are accepting a less ‘deep’ economic relationship, confident our businesses will adapt to this and that the mutual impact of the new reality on both importers and exporters (ie impacting the EU as well) will ensure every effort is made to minimise negative impact in practice. Whereas, on the key sticking point of State Aid the EU is insisting on rules that go with a deep economic relationship, where we remain within the EU’s regulatory orbit de facto. Were the EU to keep its promise of a Canada FTA outside that orbit we would in all likelihood conclude a deal, and the controversial clauses of the Internal Market Bill would not be needed at all. Let us hope that a deal is therefore reached, though I can only repeat that it must be on terms acceptable to the UK Government.
