United Kingdom Internal Market

Part of the debate – in the Scottish Parliament on 18th August 2020.

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Photo of John Mason John Mason Scottish National Party

The Finance and Constitution Committee is clear that we recognise the economic benefits to business across the four nations of the United Kingdom of having a set of rules that ensures that there are no barriers to trading within the UK.

We want our farmers, food manufacturers, engineers and beer and whisky producers, among others, to be able to sell freely in other parts of the UK. I find it bizarre that the Conservatives stress the importance of that 60 per cent of our trade but seem quite relaxed about the other 40 per cent, including the 18 per cent that is with the EU, which we can ill afford to lose.

I repeat what other members have said about how disappointing it was that the UK Government held the consultation during the Scottish Parliament summer recess and that it would not take part in our committee meeting last week.

The Welsh Parliament response to the consultation was good. It was short, sharp and to the point, as was the quote from it that Jackie Baillie cited. For example, it said:

“The timeframe for consideration of your proposals”— that is, the UK Government’s proposals—

“is wholly inadequate.”

The Welsh Parliament is also unconvinced that primary legislation is needed.

We appreciated receiving evidence from a number of organisations, including the Royal Society of Edinburgh, which said that the EU has a clear definition of a single market but that, in contrast, the UK internal market

“is a contested term with no single agreed definition.”

The RSE also suggested that the EU principles of subsidiarity and proportionality should be adopted within the UK internal market. As many of us know, subsidiarity means that decisions should be made at the lowest appropriate level, which often means Edinburgh, Cardiff and Belfast, rather than London.

As the committee’s letter in response to the consultation says, we previously considered evidence that suggests that there are two fundamental questions, which are

“The degree to which the internal market requires the harmonisation of laws and regulations and how far the requirement of harmonisation extends; and

What range of goods and services should be included in the internal market?”

As the white paper does not really address those questions, it is difficult to understand the model of internal market that the UK Government is proposing.

As the committee’s letter also says,

“there is no discussion about how baseline standards or fundamental principles in relation to environmental policy can be achieved across the UK given that this is a devolved competence.”

The current devolution settlement and EU law already allow for significant policy divergence. It seems to be agreed that frameworks will maintain equivalent flexibility, as is afforded by current EU rules. That suggests a fair degree of flexibility for the devolved nations but—again—there seems to be a lack of clarity on that.

One of the greatest concerns is that the proposals could mean that a reduction in standards in one part of the UK, particularly in England, would have the effect of pulling down standards elsewhere in the UK. Scottish beef, salmon, and whisky—to name but three of our products—are of a high standard and I am confident that they can continue to command a premium price on world markets. However, if standards in England repeatedly fall lower, for example because of trade agreements, it will make it difficult for producers who aim for high quality, along with decent wages and high animal welfare and environmental standards, to compete on a level playing field. We have to remember that the UK is a relatively small player on the world stage and it is unlikely to be arguing from a position of strength in trade agreements.

One of my greatest concerns is that there might be limitations on the measures that Scotland could take to deal with particular health issues that we face. As others have mentioned, one of the examples is our problem with alcohol and the introduction of minimum unit pricing. That was challenged by the whisky producers, who claimed that it was unwarranted interference with the market but, thankfully, the EU had a proper structure, including the courts, and we could defend the policy and eventually won. However, we are left wondering how the UK would deal with such a case. Similarly, when Germany disagreed with EU rules on tobacco advertising, clear procedures were in place to settle the dispute; Germany won, because the EU was reckoned to have gone beyond its powers and breached the principle of subsidiarity.

The EU had and has those safeguards, but the UK does not seem to. What happens if the UK Government goes beyond its powers? Who would rule against it?

The whole process says a lot about Westminster’s attitude and, in particular, Westminster Conservatives’ attitude to the Scottish Parliament and to Scotland as a country. We are a nuisance to them, they see Scotland as a region of England, and the more powers they can take from Wales, Northern Ireland and us, the happier they will be.

For many Conservatives, England and Westminster is the place to be; they want all the power to be there and all decisions to be made there. Presumably, that is why the new leader of the Conservatives in Scotland left Holyrood after only 13 months. Actions speak louder than words.

Boris Johnson and his Government have choices to make; by listening to the committee report and today’s debate, will they respect this and the other devolved Parliaments, or will they seek to undermine devolution and encourage us to seek our own path for the future?