Important proposals contained in White Paper on UK Internal Market – fundamental for entire future economic and democratic governance of UK: assets.publishing.service.gov.uk/government/upl… .
Serious proposals that deserve detailed analysis. Some initial thoughts from me in this short thread:
Serious proposals that deserve detailed analysis. Some initial thoughts from me in this short thread:
1) UKGov accepts obvious: leaving EU creates situation in which new regulatory barriers to trade will arise across UK; & existing project on “common frameworks” is not enough to address issue. Need more general understanding of challenge and more horizontal model to address it.
2) For that purpose UKGov adopts crucial starting assumption. Any regulatory divergence that creates barrier to intra-UK trade = inherently problematic: economically undesirable; might affect foreign trade deals. “Essential” goal = to maintain “frictionless trade” across whole UK
3) That starting assumption is contestable. Perfectly possible to have well-functioning Internal Market that accommodates / encourages regional variation even with certain trade barriers. And economic concerns have to be weighed against democratic interests of Scotland / Wales...
4) But having decided "problem”, UKGov proposes 2-pronged solution. A) mutual recognition, applicable to large parts of economy in goods & services: anything lawfully made/provided, eg in England can then be sold/provided in Scotland & Wales, even if latter’s rules are different
5) Together with B) non-discrimination on grounds of residence / origin of goods & services, eg Scots or Welsh rules cannot treat English businesses etc differently from how they treat their own residents / goods etc produced within their own territories
6) In themselves, those proposals might look entirely orthodox: every internal market relies on some common rules, some MR, some ND. But what really matters is the detail and the context. On both counts, this White Paper is interesting but potentially also very controversial…
7) Eg MR will have very wide scope (only limited sectors where won’t apply). But MR also appears to be unconditional: no chance for Scotland etc to justify devolved choices (say) on environmental / consumer grounds? Obviously, stronger MR = more intrusive into devolved competence
8) Eg ND will also have broad (indeed, broader) scope & UKGov wants it to cover not just blatant discrimination but also neutral measures that have similar impact in practice. Again: only limited chances for Scotland etc to justify different devolved choices eg health emergencies
9) Such broad & strong MR/ND principles are already striking. But even more controversial thanks to unique context of UK Internal Market compared to rest of world. Simple matter of fact: England totally dominates UK in terms of population and economy, unlike (say) in US/Canada/EU
10) In that unique context, broad & strong duties of MR / ND simply won’t operate as “neutral” principles. They will inherently tend to favour English choices & to limit/penalise Scots or Welsh ones. If England says X for its goods/services, the others must basically accept X too
11) Which leads to questions of governance. UKGov wants "independent input" to inform market management. But ultimately: this project belongs to London. No proposals eg to create more independent & impartial institutions / processes to represent / protect Scots & Welsh interests
12) Also important: UKGov wants (most of) new rules to be legally enforceable before courts. Again, in itself isn’t unusual. But in unique UK context, risks further weakening prerogatives of devolved institutions, eg an English business can demand Scots legislation be set aside
13) Other important bits. Eg state aid reserved to London. Eg NI governed by Protocol contained in EU-UK Withdrawal Agreement (with Gov still insisting it's only “temporary”). Eg repeats (ultimately meaningless) promises about not lowering standards for environment, workers etc
14) So: every “internal market” is unique. Approaches that work in 1 context don’t always work well in others. Question is: do proposals strike fair balance between London’s "free trade" & devolved democracy; bearing in mind England's empirical and constitutional dominance of UK?
15) & of course, painful to read document that denounces serious problems caused by erecting trade barriers within UK Internal Market... at exactly same time as UKGov is deliberately creating exactly same barriers & damage in economic relations with EU27! Double standard or what.
