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United Kingdom Internal Market Bill: Briefing for Lords Stages

On 19 October 2020, the second reading of the United Kingdom Internal Market Bill is scheduled to take place in the House of Lords.

The existing UK internal market is supported by EU law that still has effect through the operation of the transition period. When the transition period ends at the end of December 2020, the Government has argued that legislation is required to ensure the internal market continues to function smoothly. For example, the bill includes provision for market access principles of mutual recognition and non-discrimination for goods and services.

The bill also seeks to ensure unfettered access for qualifying Northern Ireland goods to the rest of the UK market. The Government argues the EU is seeking to implement aspects of the Northern Ireland Protocol in ways that were not originally intended, in order to gain leverage in the future relationship negotiations. To create what the Government calls a “legal safety net” against this, clauses 44, 45 and 57 of the bill seek to give ministers the power to unilaterally interpret, modify the application of or disapply parts of the Northern Ireland Protocol, notwithstanding their obligations under relevant international and domestic law. These provisions have been controversial.

The Scottish and Welsh Governments have objected to the bill’s proposals and argue that the bill goes against the devolution settlements. The Scottish Parliament has voted to withhold legislative consent for the bill, and the Welsh Government has recommended that the Senedd Cymru withholds consent. The Northern Ireland Assembly has indicated that it wants to oppose the bill.

The EU has launched infringement proceedings against the UK, claiming that the bill breaches the UK’s obligation under article 5 of the withdrawal agreement to act in good faith in implementing the agreement.

In response to concerns about clauses 44, 45 and 47 breaching the UK’s international obligations, the Government made an amendment at committee stage to introduce a ‘break glass’ provision so these clauses could not come into force without the Commons’ approval. Government amendments on judicial review would allow a three-month window for claims to be brought against regulations made under clauses 44 and 45; the courts could make a declaration of incompatibility with the Human Right Act 1998 in respect of such regulations, but could not strike them down. The Government also made technical and drafting amendments. No opposition amendments were made to the bill.