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The Welsh Government's Legislative Consent Memorandum On Welsh Parliament Legislation, Justice and Constitution Committee The Welsh Government’s Legislative Consent Memorandum on the United Kingdom Internal Market Bill November 2020 www.senedd.wales The Welsh Parliament is the democratically elected body that represents the interests of Wales and its people. Commonly known as the Senedd, it makes laws for Wales, agrees Welsh taxes and holds the Welsh Government to account. An electronic copy of this document can be found on the Senedd website: www.senedd.wales/SeneddLJC Copies of this document can also be obtained in accessible formats including Braille, large print, audio or hard copy from: Legislation, Justice and Constitution Committee Welsh Parliament Cardiff Bay CF99 1SN Tel: 0300 200 6565 Email: [email protected] Twitter: @SeneddLJC © Senedd Commission Copyright 2020 The text of this document may be reproduced free of charge in any format or medium providing that it is reproduced accurately and not used in a misleading or derogatory context. The material must be acknowledged as copyright of the Senedd Commission and the title of the document specified. Welsh Parliament Legislation, Justice and Constitution Committee The Welsh Government’s Legislative Consent Memorandum on the United Kingdom Internal Market Bill November 2020 www.senedd.wales About the Committee The Committee was established on 15 June 2016. Its remit can be found at: www.senedd.wales/SeneddLJC Committee Chair: Mick Antoniw MS Welsh Labour Current Committee membership: Carwyn Jones MS Dai Lloyd MS Welsh Labour Plaid Cymru David Melding MS Welsh Conservatives The Welsh Government’s Legislative Consent Memorandum on the United Kingdom Internal Market Bill Contents 1. Background .................................................................................................... 5 The UK Government’s United Kingdom Internal Market Bill ........................................5 The Welsh Government’s Legislative Consent Memorandum .................................... 8 The Welsh Government’s proposed amendments to the Bill.................................... 10 2. Committee Consideration ....................................................................... 11 Overview ....................................................................................................................................................................... 11 Market Access and Oversight ................................................................................................................... 13 Impact of Parts 1 to 3 of the Bill on the Senedd’s ability to make law ................ 13 Comparison with the EU Single Market ......................................................................................... 17 Governance, oversight and dispute resolution ........................................................................ 19 Common Frameworks as an alternative ........................................................................................ 21 Breach of international law and the rule of law ..................................................................... 23 The use of delegated powers in the Bill .........................................................................................25 Financial Assistance Powers .................................................................................................................... 26 Application of the Sewel Convention ............................................................................................. 28 Rationale for Welsh Government proposals to amend the Bill ............................... 29 Our view ....................................................................................................................................................................... 31 The absence of a draft Bill ........................................................................................................................... 31 The need for the Bill ......................................................................................................................................... 32 Provisions on market access relating to goods and services ...................................... 33 The rule of law ...................................................................................................................................................... 36 Financial assistance powers ..................................................................................................................... 36 Conclusions .............................................................................................................................................................. 37 The Welsh Government’s Legislative Consent Memorandum on the United Kingdom Internal Market Bill 1. Background The UK Government’s United Kingdom Internal Market Bill 1. The UK Government’s United Kingdom Internal Market Bill1 (the Bill) received its first reading in the House of Commons on 9 September 2020. It completed its passage through the House of Commons on 29 September 2020 and is currently in the House of Lords.2 2. The introduction of the Bill into the UK Parliament followed the publication of a UK Government White Paper in July 2020.3 Following an invitation to comment,4 we responded on 7 August 20205 and received a reply from the UK Government on 12 October 2020.6 3. The Bill introduced to the House of Commons consisted of 54 clauses arranged into 7 Parts and two Schedules. The Bill includes: ▪ provisions in Parts 1 and 2 to establish a new market access principle for goods and new principles of mutual recognition and non-discrimination in relation to the regulations of services in the UK; ▪ provisions in Part 3 to establish a new requirement on the mutual recognition of professional qualifications in the UK so that within certain limits individuals who have qualified in one part of the UK are automatically entitled to practice in another part of the UK;. ▪ provisions in Part 4 that give new powers to the Competition Market Authority (CMA) to oversee the operation of the internal market, and to monitor and report on the effectiveness of the operation of the internal 1 United Kingdom Internal Market Bill 2019-21 [Bill 177] 2 This report does not take account of Report Stage in the House of Lords 3 Department for Business, Energy and Industrial Strategy, UK Internal Market, July 2020, CP278 4 Letter from The Rt Hon Alok Sharma MP, Secretary of State for Business, Energy & Industrial Strategy and The Rt Hon Simon Hart MP, Secretary of State for Wales, Launch of the UK internal market White Paper and consultation, 16 July 2020 5 Letter to The Rt Hon Alok Sharma MP, Secretary of State for Business, Energy & Industrial Strategy and The Rt Hon Simon Hart MP, Secretary of State for Wales, UK internal market White Paper and consultation, 7 August 2020 6 Letter from The Rt Hon Alok Sharma MP, Secretary of State for Business, Energy & Industrial Strategy and The Rt Hon Simon Hart MP, Secretary of State for Wales, 12 October 2020 5 The Welsh Government’s Legislative Consent Memorandum on the United Kingdom Internal Market Bill market through a newly established body within the CMA, the Office for the Internal Market (OIM);. ▪ provisions in Part 5 to vary or disapply some elements of the Northern Ireland-Ireland Protocol in relation to exit declarations for goods moving between Northern Ireland and Great Britain and State-Aid provisions contained in the UK-EU Withdrawal Agreement. Regulations made by the Secretary of State under these provisions are to be regarded as having effect notwithstanding any incompatibility or inconsistency with any provisions of the Northern Ireland Protocol, EU withdrawal agreement and other specified legislation (including other EU law or international law); ▪ provisions in Part 6 to give UK Ministers new powers to provide financial assistance across the UK for subjects including economic development, cultural activities, infrastructure, education and international education and exchange activities; ▪ provisions in Part 7 that introduce new reservations on subsidy control (i.e. state aid) into the Government of Wales Act 2006 and the other devolution settlements in the UK; ▪ provisions in Part 7 to make the Bill a protected enactment under the Government of Wales Act 2006 meaning that the Senedd could not legislate to alter its provisions as they apply to devolved areas. 4. A detailed summary of the Bill is included in Senedd Research and Senedd Legal Services briefings.7 5. The Explanatory Notes to the Bill state that: “As part of its vision for the UK internal market, the Government is also engaging in a process to agree a common approach to regulatory alignment with the devolved administrations. The Common Frameworks Programme aims to protect the UK internal market by 7 Welsh Parliament Senedd Research, UK Internal Market Bill Research and Legal Briefing, 23 September 2020; Welsh Parliament Senedd Research, UK Internal Market Bill Research and Legal Briefing, October 2020 6 The Welsh Government’s Legislative Consent Memorandum on the United Kingdom Internal Market Bill providing high levels of regulatory coherence in specific policy areas through close collaboration with devolved administrations.”8 6. The Joint Ministerial Committee (EU Negotiations) established a set of principles on common frameworks in October 2017.9 The principles included: ▪ establishing common frameworks where they are necessary in order to enable the functioning of the UK internal
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