UK internal market functions need better scrutiny: MSPs
The UK’s Internal Market Act ("UKIMA") places more emphasis on open trade than regulatory autonomy, when compared to the EU Single Market, according to a committee of MSPs.
In a report published today, the Scottish Parliament’s Constitution Committee has concluded:
- The UK internal market has significant economic benefits, but presents significant challenges in the context of devolution.
- In resolving within the UK the tension which exists in any internal market between open trade and regulatory divergence, it is essential that the fundamental principles which underpin devolution are not undermined.
- The fundamental basis of devolution is to decentralise power so as to allow policy and legislation to be tailored to meet local needs and circumstances.
- Policy innovation and regulatory learning are one of the key successes of devolution.
The committee also reports that it is essential, as recognised by the Joint Ministerial Council in 2017, that devolution outwith the EU continues to provide "as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory as is afforded by current EU rules". It intends to invite the UK Government to explain how, in its view, UKIMA will provide for this equivalent flexibility.
The report also noted that common frameworks in certain policy areas may ease this tension by managing divergence on a consensual basis. This could be achieved through creating opt-outs from UKIMA, allowing for divergence in certain areas.
However, it voices concerns that because common frameworks are agreed between the UK and devolved governments, there is a lack of parliamentary oversight and public consultation.
The committee is working with counterparts in other parts of the UK as it seeks to press the common frameworks process to be opened up to greater consultation and scrutiny.
Committee convener Clare Adamson MSP commented: "We believe that policy innovation – being able to pass laws that are tailored to the situation in Scotland – is one of the key successes of devolution.
"As a committee, we believe it is essential that outside the EU, devolution continues to provide at least the same level of flexibility. However, we have found that UKIMA places more emphasis on open trade than autonomy for the Scottish Parliament compared to the EU Single Market.”
Ms Adamson said that as respects the creation of common frameworks “there needs to be a much wider public debate about how to deliver appropriate levels of parliamentary scrutiny and public engagement at an inter-governmental level. At present, we are concerned that lack of processes in place means less democratic oversight of the executive, and a less consultative policy-making process".
She concluded: "The UK internal market has created tensions. We will seek answers from the UK and Scottish Governments on issues raised in the report, as well as continuing to work with our counterpart committees across the UK."