United Kingdom Internal Market White Paper: statement by the Cabinet Secretary for the Constitution, Europe and External Affairs

On 16 July, the UK Government published a white paper on the ‘UK Internal Market’. 

The Scottish Government believes that the unilateral proposals made in that white paper without proper consultation with the devolved administrations are unacceptable and unnecessary and I am therefore grateful, Presiding Officer, for the opportunity to make a statement on this matter .

Once we have seen the final legislation, the Government will provide a full and comprehensive rebuttal of what is intended. 

But there is enough in this document, and enough information now coming from stakeholders about their concerns, to make us believe that we must immediately start the process of defending Scotland against such a blatant power grab. 

The UK Government is allowing only four weeks for consultation on its proposals in the paper. This is clearly inadequate and is likely to prevent proper scrutiny - so can I say at the outset that whilst we will be submitting a clear note of our opposition to the proposals within the timescale and circulating that widely, we will also publish more information as the issue unfolds, and particularly once the legislative consent process is underway. 

Presiding Officer the purported purpose of these proposals is to  secure , and I quote, “a UK-wide approach to ensure that the seamless trade across the UK’s internal market is maintained by providing a Market Access Commitment” (para 12). 

But in fact there is no threat to that “seamless trade”.

So this is a naked political ploy – a predetermined draconian solution in search of a non-existent problem.

Two principles - mutual recognition and non-discrimination – well known in EU law are to be enshrined in new legislation.  But far from “minimising domestic trade costs, business uncertainty and bureaucracy” and “protecting” our national life, enforcing these principles in the way proposed will increase bureaucracy and make life more difficult for every business and consumer in Scotland.

The real threat to the prosperity of these islands comes not from the devolved administrations but from the current UK Government.

It is the UK Government which is causing chaos, confusion and massive cost by its ideological pursuit of a hard deal, low deal or no deal Brexit in the midst of the worst recession in centuries and an unprecedented pandemic.  

As of today – some five months before the end of a transition period that could and should have been extended – there is no certainty on tariffs, on customs, on cross border flows of data and people or on regulations.

In fact, Presiding Officer, the only certainty is that these  proposals would undermine the high quality and standards that Scotland has set for food production and animal welfare for the sole  purpose of allowing the UK to do bad trade deals.

That point was made effectively by the  distinguished European jurist Sir David Edward when he observed, “ the principles of mutual recognition and non-discrimination are not simple matters.  For example, the White Paper omits any reference to the principles of proportionality and subsidiarity which are essential ways of balancing and reconciling conflict.” And he also points to a huge volume of case law and other writing on what he calls a “highly complex and sophisticated subject”.

So these proposed changes undermine not just the basic foundations of devolution but also all existing mechanisms for cooperation, the development of common frameworks, and the entire list of devolved competences.   

In reality, Presiding Officer, the actual purpose of these proposals is all too clear.

The UK Government intends to ditch the high regulatory standards we have enjoyed as a member of the EU and wants to do so without seeking consent from the people of Scotland.  

And we can be sure that this is the purpose of the proposals, because there is already a workable, and constitutionally appropriate way forward to deal with any actual issues that arose from any threats to internal trade if those ever happened.  

That way forward is to do what we are already doing -  to bring into effect the Common Frameworks currently being negotiated between the UK Government and devolved administrations, in line with the principles agreed in the JMC as far back as 2017. 

Indeed, the white paper itself, in Paragraphs 87 – 94 sets out the Common Frameworks programme and admits that it is already creating, “an intergovernmental policy development and decision making process (which) provides high levels of regulatory alignment in specific policy areas along with roles and responsibilities of each administration” (para 88).

The paper also points out, correctly, that Common Frameworks can and do work within the devolution settlements and respect the democratic accountability of the devolved legislatures.

The Scottish Government has engaged in good faith in the cross UK project  to develop these Common Frameworks, in line with the agreed principles. 

We are not the ones who are now tearing up previous agreements in order to veto constructive discussion and impose an outcome designed and desired only by Westminster.

What the UK Government wants is not smooth trade, but to take back control – and not just from the EU, but from the people of Scotland and Wales and Northern Ireland.

And it certainly does not want anything to stand in its way as it wilfully dismantles the high quality system of regulation and protection we inherit from our years in the EU.

The effect of the proposals would be to prevent this Parliament from requiring goods or services produced elsewhere in the UK to meet the standards decided on by this Parliament.

In other words, if the UK Government can simply change the rules for England, probably using the English Votes for English Laws procedure which excludes Scottish MPs, Scotland would just have to accept that decision. 

Helpfully the white paper itself even contains examples of where it could do so.

On Page 77, in a section headed “Costs of regulatory divergence”, there is a case study on deposit return schemes; on Page 78 there is an example concerning food labelling; on pages 79 to 82 there is a case study on food manufacturing which covers food hygiene, recycling, animal welfare and environmental matters such as pesticides; and Page 82 also specifically mentions minimum pricing as a regulatory restriction.

And on Page 85 the paper discusses building regulations and granting construction permits.

A considerable range. And they are only examples.  

Of course, the mutual recognition principle is intended to be just that: reciprocal – the market in England will have to accept standards set in Scotland, Wales or Northern Ireland.

But it is very clear that were that to ever happen in a way that disadvantaged the current Tory UK Government then before you could say, “the tail wagging the dog”, we would find that only rules made in Westminster could change the market in England. 

Presiding Officer, my final points concern the implications of these proposals for devolution and governance.

There is no commitment in the paper to seeking legislative consent from this Parliament.  No recognition that these matters are devolved or affect the competence of this Parliament.

The paper clearly says in paragraph 154 “the evolution and overall shape of the UK’s Internal market will be overseen by the UK Parliament, and that key decisions will be put to the UK Parliament for approval”.

The implication is that anything in the underpinning legislation will be reserved from now on.  This Parliament will lose any say, even on matters initially excluded like minimum unit pricing.

The legislation outlined in the paper will require legislative consent under the Sewel Convention and the Scottish Government will be recommending in the strongest possible terms that this Parliament does not give any such consent, and that the UK Government therefore respects that decision in line with the rules of our constitutional system.

The paper also makes clear the intentions of the UK Government to centralise control in other areas.

Most notably – and explicitly – the paper sets out its plans to reserve the subsidy control regime.  It also makes clear the devolved administrations will have no role in designing that regime and that this Parliament will have no role in approving it: “the future subsidy control mechanisms should be the responsibility of the UK Parliament to determine” (para 173).  

Again, reserving subsidy control will require the consent of this Parliament under the Sewel Convention, and again the Scottish Government will be strongly advising this Parliament to refuse that consent, and the UK Government to respect that decision.

And at paragraphs 128 and 182, the paper talks of “clarifying spending powers of all levels of Government and for the UK Government to construct replacements of EU programmes”.

Again, it does not take much thought to realise that these paragraphs mean – amongst other things -  the Shared Prosperity Fund, replacing devolved responsibility for the current EU Structural Funds.  The intention is that those funds  will become a reserved matter and solely controlled by the UK Government.

In all this, Presiding Officer, there is a consistent pattern emerging regarding the Tory view of UK governance

This insists on total freedom of action for the UK Government, unrestrained by any requirement to negotiate or compromise.  It wants substantial constraint on powers presently held by the devolved administrations.

That is the agenda, and it is being pursued with vigour.

The Scottish Government is committed to co-operation but it will not be bullied. There are alternatives to these ill-conceived proposals, including taking the voluntary Common Frameworks programme to its anticipated conclusion. 

Finally, Presiding Office, none of this was mentioned even in passing during the 2016 EU Referendum or indeed in the 2014 Independence one.

In 2014 we were exhorted to “lead not leave”. We were told that a ‘NO’ vote would deliver a “better and a fairer Britain”. And of course, we were assured that our place in Europe was secure.

In 2016 we were promised that this Parliament would gain more powers. That we would be free to make our decisions. And even – and this is Michael Gove himself speaking in June 2016 – that if the UK left the EU, that on migration, and I quote him, “it would be for Scotland to decide”, when the reality is the UK Government are forcing through an end to freedom of movement against the explicit wishes of this Parliament and the people of Scotland.

Presiding Officer, not a word that has been said to us in the last 6 years about those matters has turned out to be true.

So it takes no great prescience to realise that all the promises being made now will be equally hollow. 

It is not too late for the UK to turn back from this route.  

But I can assure Scotland that if it does not, then this Government will fight the proposals tooth and nail, in every possible place, and with no intention of giving way. 

I hope it will enjoy the support of the whole Chamber in so doing.