Why is the Internal Markets Bill so controversial?

Tonight the House of Commons held the Second Reading of the controversial Internal Markets Bill. It passed by 340-263 but this is by no means the end of the line for the bill and it faces many challenges ahead.

What is the bill about?

The Internal Markets Bill is being passed to regulate trade within the UK. It is needed, in some form, because Britain’s withdrawal from the EU will see a number of powers that previously belonged to the EU transferred back to the UK. At its most basic, the bill aims to ensure that good can travel freely across all of the UK: England, Scotland, Wales and Northern Ireland.

Currently, the devolved areas of Wales, Scotland and Northern Ireland are bound, like England, to EU Law. When powers return from the EU, there is a danger that the devolved regions may adopt different regulations and standards, thereby making trade across the UK difficult. The bill aims to remove these barriers to trade and keep the economy of the whole of the UK strong.

Why is the bill so controversial?

On the 24th January 2020 Britain and the EU signed the Withdrawal Agreement. This is a legally binding international treaty that outlined the terms under which Britain would leave the European Union. It meant, for example, that Britain would comply with EU regulations during a transition period that lasts until the 31st December 2020.

The return of a Hard Border between Northern Ireland and the Republic of Ireland simply has to be avoided at all costs.

In addition, the agreement dealt with the delicate situation of Northern Ireland. Under the Northern Ireland protocol, Northern Ireland will adopt the regulations of the EU Single Market on goods. This will mean goods can flow from the Republic of Ireland (which is in the EU) to Northern Ireland without extensive checks. This compromise protocol was reached in order to prevent a hard border between the Republic of Ireland and Northern Ireland and therefore protect the Good Friday Agreement the peace process.

However, Clause 42 of the Internal Market Bill gives the government the power to disregard the Northern Ireland Protocol that was agreed with the EU:

Power to disapply or modify export declarations and other exit procedures

A Minister of the Crown may by regulations make provision about the application of exit procedures to goods, or a description of goods, when moving from Northern Ireland to Great Britain.

That includes any exit procedure that is applicable by virtue of the Northern Ireland Protocol or otherwise.

Such provision may include provision for rights, powers, liabilities, obligations, restrictions, remedies and procedures that would otherwise apply, as a result of relevant international or domestic law, not to be recognised, available, enforced, allowed or followed.

Clause 42 of the Interal Markets Bill
Brandon Lewis was responding to an Urgent Question in the House of Commons.

In the House of Commons on Tuesday 8th September, in response to an Urgent Question on the matter, the Northern Ireland Secretary, Brandon Lewis, confirmed that the bill would allow for the breach international law in a “limited and specific way”:

Robert Neil (Conservative MP): The Secretary of State has said that he and the Government are committed to the rule of law. Does he recognise that adherence to the rule of law is not negotiable? Against that background, will he assure us that nothing that is proposed in this legislation does, or potentially might, breach international legal obligations or international legal arrangements that we have entered into? Will he specifically answer the other point: was any ministerial direction given?

Brandon Lewis: would say to my hon. Friend that yes, this does break international law in a very specific and limited way. We are taking the power to disapply the EU law concept of direct effect, required by article 4, in certain very tightly defined circumstances. There are clear precedents of this for the UK and, indeed, other countries needing to consider their international obligations as circumstances change.

Hansard – Tuesday 8th September 2020

This statement has led to outrage, both at home and abroad.

Geoffrey Cox, Former Attorney-General, has said he will vote against the bill.

At home a number of major figures have spoken out against the bill. These include former Prime Ministers John Major and Tony Blair who teamed up to criticise it. As of today, five former Prime Ministers have spoken critically about the bill (May, Cameron, Brown, Blair and Major).

Today, former Attorney-General and Boris Johnson supporter, Geoffrey Cox, confirmed in The Times he would not vote for the deal and would instead abstain. He said that this was due to the bills impact on the rule of law which he called “unconscionable”.

In Brussels, the reaction has been stern:

The President is the European Commission – Ursula von der Leyen
Vice-President to the EU Commission – Marcos Sefcovic
Chief EU Brexit Negotiator – Michele Barnier

Importantly, this action would not just effect the UK’s relationship with the EU going forward. It has wider implications for the UK’s relationship in the world. The international treaty that governs international treaties is the Vienna Convention which Britain signed in 1961. Under Article 27 of the Vienna Convention, breaking an international treaty using domestic law is illegal:

Internal law and observance of treaties

A party may not invoke the provisions of its internal law as justification for its failure to perform a treaty.

Article 27 of the Vienna Convention

In the UK Parliament is legally sovereign, there is nothing to legally stop Parliament passing this bill. However, following Brexit, Britain has to negotiate trade deals with countries across the world, including the United States and China. It is difficult to imagine that a reputation for breaking international law will make that vast challenge any easier.

Why are the government doing this?

This bill is needed in some form. A number of new powers will return from the EU and need codifying and delegating, where necessary, to ensure the effective continuation of devolution and the stability the the British economy. However, the timing and tone of the bill feels more like an act of brinkmanship – an attempt to force the EU to come to a free trade deal before the end of the transition period. The British Government has said that they are only being forced to include the provisions to disapply parts of the Withdrawal Agreement because the EU has not acted “in good faith”. David Frost, the chief UK Brexit negotiator has tweeted about his frustration with the EU:

At a crucial time, the relationship between the UK and the EU could not be more sour.

What happened during the debate and vote?

Boris Johnson opened the debate, which was itself, considering it is only at Second Reading, an indication of how important this is to the government. He argued that now that Britain has left the EU, the bill was needed to secure free trade across the UK. He said that the bill aimed to provide what the Conservative Party had promised in their 2019 General Election Manifesto. Johnson said the bill was an insurance policy to guarantee free trade in the UK if a free trade deal could not be reached with the European Union. He said that in recent months the EU has been unreasonable and was abusing the Northern Ireland Protocol. He said that the EU may stop the UK’s food products being sold anywhere in the EU, which, under the protocol, could also stop food being shipped to Northern Ireland. Johnson said he hoped for a Canada-Style Free Trade agreement with the EU. He said, the bill would allow these threats from the EU to be countered.

Johnson said that the Joint Committee set up as part of the EU Withdrawal was being ignored and this might eventually mean tariffs exist between Great Britain and Northern Ireland. He said “no British government could ever accept this imposition”.

Johnson said that the Withdrawal Act (and Geneva Convention) required both sides to act in “good faith”and the EU had failed to live up to this, therefore justifying the governments action in this bill. Johnson said the bill would also devolve powers over 160 areas of policy to the devolved regions of the UK and it should
be welcomed across the UK.

Ed Miliband was front and centre once again.

In the absence of Keir Starmer, ex-Labour Leader Ed Miliband responded for Labour. Miliband said there were two issues at the heart of the bill:

1. Can we get an internal market while upholding devolution?
2. Is the UK going to uphold international law?

For the first, he said the government must legislate and that this bill should exist in some form. However, this must be done while recognising that devolution has grown massively and decisions have to be taken with the clear input of the devolved assemblies. He said the government was not doing this and the government could impose low standards that the devolved assemblies have to follow.

David Cameron has said that he has reservations about the bill.

On the second, he said he could not, despite his disagreements with David Cameron, have ever imagined him suggesting the UK break international law. He said Britain is known around the world for its respect for the rule of law and that this not an argument about remain and leave, it is about right and wrong.

Miliband congratulated the Prime Minister for his success in bringing his promised unity by uniting his five predecessors. However, they are united in believing the PM is “trashing the reputation of his office”:

Miliband then went on to consider all of the different arguments that the government have made for passing this bill. This was Miliband at his best, with shades of some of his best past performances at Prime Ministers Questions. He was both cutting and precise, at one point offering to give way to the Prime Minister to answer his question even though the Prime Minister had not intervened and stayed in his seat – consequently looking quite weak. Miliband said the issues should be resolved by negotiation, not through threats of illegality.

Other significant contributors were:

The SNP’s Ian Blackford said the “right wing Brexit cabal” had reached rock bottom. He said that this was the biggest threat to devolution since its inception in 1998. He made clear that the bill broke both international law and the devolution process. He called on any MP who respected the ‘rule of laws to vote against this bill.

Most Conservative speakers seemed to suggest they would support the bill, however, others indicated they might either abstain or vote against. These included:

Jeremy Wright (Former Attorney-General) – Wright argued that there were already avenues in the Withdrawal Agreement to deal with disagreements and the government should use these mechanisms, rather than threatening breaking the rule of law. He said if we break international law, we weaken our own authority in the future.

Andrew Mitchell (Former International Development Secretary) – Mitchell said that rule of law mattered and Britain has spoken up for it around the world. It cannot now ignore it when it suits it politically.

Stephen Hammond – Hammond said there were already mechanisms with the Withdrawal Agreement to deal with the issues the government claimed had forced them into this action. He said “this country cannot and does not break international law”.

Charles Walker – Walker decided (bizarrely) to focus his speech on the the threat to Civil Liberties by the COVID-19 regulations. However, his fundamental point was that Britain could not break the rule of law before all other options had been exhausted. He was also critical of the Executive’s treatment of Parliament and warned “if you keep whacking a dog, don’t be surprised if it bites you back”.

Rachel Reeves closed the debate for Labour before, as has become customary on big occasions, Michael Gove closed it for the Conservatives.

At 22.00 the first division took place. This was on an amendment proposed by the Labour Party and sought to reject the bill because it “undermines the EU Withdrawal Agreement” and “breaches international law”. The amendment was defeated by 213-349.

At 22.15, the division on the bill being read a Second Time was held. The bill passed by 340-263. It was a convincing passage in the end, despite a minority of Conservative rebellions.

Will the bill necessary pass Third Reading?

The bill won’t necessarily pass Third Reading having passed Second Reading, but given this margin, it looks extremely likely. Yet, some MPs may choose to give a bill the benefit of the doubt at Second Reading, giving time for further debate and hoping revisions might be made by the time of the Third Reading (after which it has gone to Committee). If they are still not completely happy, they may reverse their vote or vote against, if, like Geoffrey Cox, they abstained.

What will happen in the House of Lords?

Even if the bill passed the Commons, it will face trouble in the Lords. The Conservatives do not have a majority in the Lords and whipping is generally far less effective. Currently, the numbers in the Lords (excluding minor parties) are:

A number of key members of the House of Lords have spoken against it, including former Conservative Leader Michael Howard:

Michael Howard - Wikipedia
Michael Howard is one of many Lords criticising the Government’s plans.

“My Lords, does my noble and learned friend simply not understand the damage done to our reputation for probity and respect for the rule of law by those five words uttered by his ministerial colleague, in another place, on Tuesday— words that I never thought I would hear from a British Minister, far less a Conservative Minister? How can we reproach Russia, China or Iran when their conduct falls below internationally accepted standards, when we are showing such scant regard for our treaty obligations?”

Unlike with the Withdrawal Agreement itself in which the House of Lords was constrained by the Salisbury Convention, it will not be with the Internal Markets Bill. The government is actually arguably acting contrary to its election manifesto pledges and the deal it made with the EU and passed through Parliament in January 2020.

One slight hope of the government is that the bill might be specified as a Finance Bill by the Commons Speaker in which case the Lords would be bound by convention to let it pass. However, given the range of issues in the bill, this seems extremely unlikely.

So, this issue will rumble on and the government faces an embarrassing loss in the House of Lords. However, perhaps even by being introduced, the bill has done its job of forcing the EU to come to terms on a Trade Deal. At present, it is hard to tell.

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