Internal Market bill

Unfortunately, the country has once again found itself in the midst of another Brexit debate. Perhaps this was inevitable - both the UK and the EU seem to have chosen brinkmanship as their negotiation tactic of choice, both in negotiating the Withdrawal Agreement last year, and in negotiating two party’s parties’ future relationship now. That we’ve reached a similar impasse to that we saw last year is unsurprising.

What is more surprising is the way that the situation seems to have followed the logic of a lazy television series. Each successive series finale raises the stakes higher and higher; the action becomes more and more implausible. As last year, we have all of the concerns of lines of thousands of lorries at Dover, damage to just-in-time supply chains, food prices skyrocketing, and harm to businesses and jobs in the UK that rely on trade with the EU. What renders this situation different from that in which we found ourselves last year is the Internal Market bill, a piece of legislation designed to ensure the free flow of goods within the United Kingdom, and undo the Northern Ireland protocol that Johnson’s government negotiated not one year ago, and this has made all the difference. This time, the UK is risking a large source of its soft power at a time when the international rules-based system is under great strain. This time, the Prime Minister seems ready to insult the voters by acting directly against the mandate he gained on the Conservative 2019 manifesto. This time, the fears of the damage to the union have spread, like fissures in a window pane, from the first crack Johnson created between Great Britain and Northern Ireland to reach across every national border within the United Kingdom.

The aim of the Internal Market bill to clarify the status of the UK’s internal market - until now taken for granted since the Act of Union 1707, and subsequently a direct consequence of the EU single market and customs union - is reasonable, and the debate that even this provision has generated indicates that such legislation is needed. Yet to outright defy the Withdrawal Agreement - while understandable given the dire nature of the agreement - demonstrates a shocking lack of responsibility, and a shocking disregard for what should be fundamental values. The attempt to break international law, however “limited and specific” this may be, in order to avoid making a decision regarding state aid in the UK is simply baffling, particularly given the more limited role for state aid that the UK conceded in its trade deal with Japan, and the fact that it is largely intended for an industry that doesn’t rely on such aid in any case.

The SNP’s insistence that Brexit should imply Scottish independence has always been contradictory. It’s hard to understand how a party can watch the massive damage, both to the economy and to international standing, that erecting new borders can have, and determine that erecting a border between Scotland and England is a good idea. In 2016, Scotland exported goods worth £45 billion with the rest of the UK - it exported just £12.7 billion with the EU. This isn’t to say that Brexit won’t be damaging to Scotland, but it is to say that Scottish independence would be moreso. 

Their apparent ambition to create new internal trade borders within the UK while remaining part of the union is similarly concerning. First and foremost is simply how bizarre it would be for customs forms and checks to be filed by a business in Carlisle selling to customers less than an hour north in Scotland. The depth of closeness between the nations of our union is such that it would be unacceptable for a business in any of our family of nations to have to fill out forms - or indeed simply be denied permission - to produce and sell, or purchase and consume goods produced in this country. This freedom is vital to our integration, to share in our prosperity, and to continue marching forward together as a union of values and success, a march we can rely upon despite the shorter term turbulence that we may experience.

Of course, this argument is to some extent vague and abstract (though no less significant), based as it is in a sentiment of unionism. What is more concrete is the economic case against such measures. The UK is the most important market for each of the nations that form it. The country has a small geography, a shared currency, a common language, a set of common values, and a common history. These are all factors which facilitate high trade flows, allowing for tight and highly integrated supply chains, a greater variety of goods, and more consumers to whom businesses can sell, increasing demand and hence increasing employment and the value of labour. A majority of Scotland’s exports - around 60% - are to the rest of the UK. Unfortunately, similar intra-UK trade figures for England, Wales, and Northern Ireland are not immediately available, but estimates are able to show that Scotland is similarly important to England, that Wales relies heavily on the English market for consumers, and of course, that England relies heavily on it’s UK partners. 

To attack such well established trade patterns, based on such solid foundations, is a wasteful and reckless pursuit of ideology, and an ideology of division against unity at that. No consumers in the UK will benefit from reduced variety or greater frictions in supply chains. A reduction of access to intermediate goods and consumers will do nothing to grow prosperity inside any of our borders. 

A focus exclusively on the economic effects is however to miss the political point at the core of the arguments for independence and internal trade barriers. The debate centers around two strongly related issues - that of a ‘race to the bottom,’ and that of trade deals undermining standards throughout the UK without the consent of each of the UK’s nations. One may argue that a further motivation is the principle that a country’s national legislature should be free to create whatever legislation on regulations it so pleases, but given that the SNP and Plaid Cymru - both opponents to the Internal Market bill on the grounds of ‘losing’ these competences - both support rejoining the EU upon achieving independence, and hence abandon claims to such powers, it is not worth too much time fretting over this concern.

The issue of a race to the bottom is essentially the argument for the single market within the EU - countries within the EU choose to be subject to laws made in Brussels, so that all countries involved can ensure strong trade links without risking a competition that will harm their citizens (and as such, may suggest a way forward for the UK, which we’ll discuss later). Without the devolved administrations taking on powers to block low quality goods and services that its people would reject in a democratic exercise, producers within the UK could consistently produce to the lowest possible quality to reduce costs as far as possible, and many fear that what is legally the lowest possible quality could degrade further and further while attached to a larger country that is home to a small state, right wing party, and particularly one that is desperate to seek trade away from Europe. In this event, producers with higher standards would be unable to compete on price, and would be forced out of the market. Similarly, there is a concern that the UK will be eager to strike trade deals - particularly with the US, though the mooted Transpacific Partnership (TPP) should also cause concern - that will undermine UK standards and producers. As such, devolved administrations would like to be able to set national standards to maintain the quality of the goods available to their population. This is in direct contradiction with the purpose of the Internal Market bill, which would allow any good produced or acceptable for sale in one part of the UK to be acceptable for sale in any other part of the UK, as is currently the case. 

These concerns are valid, and warrant a fundamental rethink of how the UK intends to determine its regulatory standards and approach to trade deals going forward. This issue is novel - it is one that had not been relevant until Blair’s government devolved powers from the UK government to national bodies, at which point the issue didn’t exist due to EU membership. The current approach by the Conservative government, to proceed without thought with current structures, clearly won’t do, since the UK constitution’s provision for devolved governments means that there is no such thing as a return to what was before EU membership and before devolution. The devolved nations do deserve and must have a say in the standards that the UK sets for both itself and what it imports, rather than to be run over roughshod by an England dominated parliament, in particular given that the UK parliament is regularly dominated by a party that seeks only to produce a majority only in England, and pay little heed the other three nations. The UK parliament is of course the body that represents the UK in its entirety, but its majoritarian nature combined with its roughly population-proportionate composition puts smaller nations at a disadvantage.

Radical reform, however, is not necessary. While we can contemplate a more federal structure, it is perhaps worth looking at the body from which we have departed for a solution. If, similarly to the EU, the legitimation of any treaty required by law ratification by all parliaments of the UK - that is, Westminster, Holyrood, the Senedd, and Stormont, including a majority of MPs representing English constituencies at Westminster - then we could be sure that the nations of the UK move forward in lockstep without harming the integrity of the UK single market. Even a more timid proposal, in which a trade deal required that a majority of MPs sent to Westminster from each nation in the UK parliament grant approval, would serve the same purpose. This or a similar such approach to regulatory standards within the United Kingdom would assuage fears about a race to the bottom of standards without harming the internal market. 

Such legislation would represent a transfer of competence of regulatory standards and trade deals back to the UK and the UK only. It also, however, asserts the appropriate level of input from each nation. While a UK parliament-exclusive solution may sound onerous, it would simply represent an extension of EVEL standards for all nations and creates a system somewhat reminiscent of qualified voting already standard within the EU; the alternative solution whereby ratification from each legislative body ratifies trade deals is simply a copy-and-paste from the standard already set in the EU. Further, while one may be concerned that such rules would create unhelpful distinctions between types of law, requiring different conventions and standards for passage, it is already the case that such distinctions exist - those that have ECHR implications, money bills, and so on. Either proposed solution would be simply an extension of procedures with which we are familiar, merely repatriated to the United Kingdom in a way consistent both with respect for our family of nations, and consistent with reclaiming sovereignty relating to competence for regulatory standards. That no such amendment has been considered is unfortunate.

The poor approach to the creation of a new basis for a UK internal market is one thing, but what is far more egregious is the relationship of the bill to the Withdrawal Agreement, namely those provisions relating to the Irish backstop. Concerns around the bill’s relationship to international law have resonated across political divides. All five living former prime ministers have objected to the measures in the act that run contrary to international law; senior Tories in the Lords have objected to the act; senior Tory figures including Geoffrey Cox and Sajid Javid have objected to the act, all on the grounds that it represents a threat to the British reputation for upholding the rule of law, a vital component of our soft power.

The Government is seeking to legislate to prevent the requirement for customs forms between Northern Ireland and Great Britain, and wishes to renege on its commitments on restrictions to state aid - notionally limited to the scope of Northern Ireland, but with significant ramifications for the domestic state aid regime the UK might wish to put in place. These complications arise because of the backstop limited to Northern Ireland, an innovation that Boris Johnson had negotiated and signed into law to avoid the whole-of-UK backstop as negotiated by his predecessor, Theresa May. 

That these provisions of the Withdrawal Agreement are undesirable is understandable - in fact, many were brought up by those who objected to Johnson’s negotiated deal - not only by the opposition, but also by many of the Conservative backbenchers of the time. It is well known that the government was aware of the far reaching implications of the agreement’s provisions on Northern Ireland, and in any case, it was much discussed during the general election that Boris Johnson had called in order to have his deal voted through (a task necessary due to objections relating to these very provisions). As Ed Milliband succinctly pointed out in his opening statement for the opposition, either the Prime Minister did not understand his deal at the time of the election and its subsequent passage through Parliament, in which case he is incompetent, or he deliberately misled the public, in which case he’s unworthy of the office. 

The fact of the matter is that the provisions of the Withdrawal Agreement now exist - as agreed - until such time as the relationships of Northern Ireland to the rest of the UK and to the Republic of Ireland are handled in the content of a trade deal with the European Union. This is unfortunate, but it is what our Government and our Parliament agreed, and it is important that the UK acts in accordance with what it has agreed.

That the Internal Market bill would violate international law, or at the very least empower ministers to do so, is well accepted - despite some disingenuous claims to the contrary in the Commons debate during the second reading. The government itself, via Brandon Lewis, Secretary for Northern Ireland, admitted in the House of Commons prior to the debate that the act allowed ministers to break international law. The senior lawyer of the civil service resigned due to his objection that the act represented a breach of international law, and while he has been decried within government circles as a remainer, it is worth noting that civil servants are quite used to implementing policies with which they disagree - the aversion is due to the illegality involved. 

As Jeremy Wright pointed out during the debate on the second reading of the bill, while it is not domestically illegal or unconstitutional to pass domestic law in contradiction with international law, it is still immoral and improper (and in any case, as some argue, it may be in breach of the ministerial code, which while itself is not law and is only able to be upheld by the Prime Minister, should serve as a reasonable guide as to proper conduct). 

The primary reason for this is a matter of principle. The UK believes in a rules-based international system. This liberal ideal, first pursued by the botched attempt of the League of Nations following the end of the first world war and later strengthened through successive iterations of international cooperation, is a vision of peace and prosperity and is one towards which we should strive, for both the means and ends are good in and of themselves. A world in which great powers are constrained to act within reasonable limitations is one in which civilians do not have to live in constant fear of the machinations of international leaders. It is a world in which rights are expected to be upheld, and an environment of stability and predictability in which innovation and production is able to thrive, thus raising living standards within the UK and across the globe.

This is of course an ideal, and one that can only ever be imperfectly realised. But an imperfect realisation is better than none at all, and for the UK to benefit from it, we must maintain a healthy respect for international law. 

As realists will point out, states necessarily live in anarchy. There is no authority or police that can enforce agreements between any two states. Even in settings involving arbitration mechanisms, there is little that can be done to a state that refuses to accept the outcome of such arbitration. This, however, misses the point that it is within states’ interests to perpetuate a rules based order - even in specific instances in which a state loses out, it is aware that undermining a rules based system and welcoming a return of great power politics would eventually cause a reduction of their absolute power. 

This is particularly true of the UK. The UK has an oversized influence on the world stage, owing not to military might, but to soft power. Unfortunately, Johnson’s Conservative party seems to have decided that the UK’s soft power is unimportant, attacking as it does the BBC and abolishing the Department for International Development. These are both mistakes, and mistakes which are cause for concern, but the decision to bring up the prospect of violating international law is far more grave. 

The main source of power for the UK is primarily the relationships it maintains. Much is said of the UK of the special relationship with the US, despite little reciprocity in Washington DC; this is because the UK generates a great deal of leverage by acting as the pivot of the Western world, providing a bridge between the US and Western Europe. The UK’s diplomatic network is heavily bolstered by its relationship to the rest of the Commonwealth, and its presence in a great number of international organisations - NATO, the G7, the UN security council, and to a lesser extent the Council of Europe - mean that it has significance on the world stage. 

International relationships are, however, predicated on trust and predictability. This naturally entails abiding by international agreements, and particularly those signed not even one year prior. The UK creates strength for itself insofar as it can be seen to cultivate valuable relationships. The less respect the UK has for the international law of which it agrees to be a part, the less valuable the UK becomes to international partners, and the less strength the UK can command. 

It is also worth remembering that the ways in which the UK can influence other state actors is through binding international agreements. To undermine the framework in which this is possible is to undermine the basis of much UK influence. While violations of international agreements regarding customs operations and state aid are of course not in the same area as violations of the Iran nuclear deal, Paris Agreement, or the UK-Sino pact regarding Hong Kong (though there are implications that may affect peace at the border within the island of Ireland), erosion of the basis on which the former agreements stand is an erosion of the basis on which the latter agreement stands.

There are two primary objections to the charge that the UK should abide by international law and international agreements. Firstly, the UK would not be alone in a soft power state breaking international law, and indeed some argue that precedent already exists in the UK’s recent history. Secondly, disregarding any moral imperative, the cost of such an act in terms of reputation and hence our ability to project power through our value essentially as a hub of the international community, is less than the benefit that we are able to gain in this instance. 

For the former argument, it is not uncommon for commenters to direct attention to the recent German court ruling regarding bond purchases by the ECB, or the UK refusing suffrage to the incarcerated. In responding to both of these specific cases, it is of course possible that the refuting arguments miss the underlying current, but since it is both impractical and uninformative to produce a piece by a layman that exhaustively and comprehensively addresses every alleged breach of international law by a friendly western state, I hope that these refutations will bear some relevance to any similar such charges.

The case of the German infraction - the technicalities of which are unimportant for our purposes - is substantially different from the case of the UK in a key respect. In this case, the highest court in Germany ruled that a bond purchasing scheme by the EU was unlawful. While the infraction suggested by the UK is one intended by the executive and, at least so far, endorsed and supported by the legislature, the case of Germany’s interaction with the ECB is a matter of the courts. While courts are in an important sense decision makers, they are not lawmakers, nor do they have legislative or executive competence. Courts exist as interpreters of that already written - they act to verify what is and is not, rather than to create policy. They are also separated in a way that is essential from decision-making bodies. This is in stark contrast to those who make the rules changing them to contradict international law on a whim. 

It is also important to note that in the case of Germany, the legislative and executive response to the court ruling was essentially to do nothing, and the EU response was much the same. The court could say whatever it wanted regarding the legality of the EU institution’s actions, but if those who make the decisions and those who write the law accepted the practical subordinate role of this court to the European courts, then in any practical manner, it is as though the court ruling didn’t happen. There was no violation of internationally agreed rules because no one did anything. That the court could rule on this is the residual effect of a domestic legal system interacting with a modern context for which it was not prepared, rooted as it is in the idea of sovereign nation states, in a time where the geopolitical framework seems to be edging away from a Westphalian conception to that of Hedley Bull’s ‘new medievalism,’ whereby different polities share overlapping authorities over different regions. Much like the UK’s legislative solution to reconcile sovereignty of Parliament and the supremacy of EU law (essentially that all EU law is implemented via statutory instruments), the German legal system involves a fudge to protect the constitutional supremacy of their highest court. Much like the UK’s fudge, the practical effect is negligible.The combination of the source of the problem being the courts rather than lawmakers or the executive and the ultimate impotence of the act render this breach substantially different to that proposed by Johnson’s government. 

What then of denying suffrage to those incarcerated? This is clearly a matter for legislators, and clearly a matter of practical consequence. Here still, however, clear distinctions are found between this instance and that of the provisions of the Internal Market act. The action of the UK directly contradicted what was determined by Strasbourg, but crucially it did not act in opposition to its responsibilities towards other states. Other countries did not worry about damage done to them as the matter was essentially internal. This is in stark contrast to what is currently being considered in Parliament - that the UK violate international law (or at the very least, give ministers or Parliament the power to do so) in a way that abandons duties to other nations that we voluntarily signed up to (and comically, the aspects we intend to violate are those which this government itself negotiated and insisted on including), and not simply act with only domestic consequences. It is precisely this feature of the proposed legislation which harms other nations’ ability to trust the UK should such legislation be made into law. 

These arguments highlight the features of the Internal Market bill that make it so egregious: that it is a decision of both the executive and the legislature; that it is of strong practical significance to states to whom we have international responsibilities; and that the international law we intend to breach is an agreement which we willingly volunteered and negotiated. All of these features make the UK seem unreliable and petulant, and hence represent a departure from the rules-based order that the UK relies upon as the framework that allows its soft power to be possible. It is not just in the pursuit of abstract moral principles that MPs should reject the legislation - though these abstract principles are important and would warrant the rejection of the bill on their own - but in the pursuit of maintaining British power on the world stage.

The second argument against abiding by international law regards the supposed benefits, and is quite surreal when one recalls that this government is a Tory government. 

The first intended benefit is to prevent ‘reach back,’ whereby rules affecting state aid in Northern Ireland (included due to perceived risk to the competitiveness of companies in the Republic of Ireland given the free flow of goods between the two countries) end up severely restricting the state aid regime for the wider UK due to perceived risk of imports by propped-up companies from Great Britain through Northern Ireland. The government’s current position so far regarding the future state aid regime is “we haven’t decided,” though it is worth noting that certain aspects of possible state aid regimes have already been restricted by the trade deal negotiated with Japan (albeit to a much lower degree than would satisfy the European Union). 

That the government is risking such high costs for this benefit is unusual for a number of reasons. For one thing, it is surprising that the party that dismantled the UK’s extensive state aid regime to promote greater competitiveness in industry and hence induce innovation is now willing to risk British influence and damage to the British economy in order to defend a hypothetical extensive state aid regime. It is worth noting that France and Germany have also managed to hand out significantly more in state aid than has the UK, even acting entirely within the framework of the EU. 

It’s unclear that a looser state aid regime would prove useful to achieving the government’s aim, which (as thick as the fog of indeterminism regarding the government’s desired policy is) appears to be for the government to be able to hand-pick fledgling start-ups in the tech industry, in order to ensure that the UK is home to at least one company that goes on to dominate some aspect of the industries that will be vital in the future - things like artificial intelligence, and ever-advanced fintech. The problem is that the interest in supplying state aid for this industry seems to have outpaced the desire for receiving it. As Dom Hallas, executive director of the representative of the start up industry has said, “state aid wouldn’t be one of the top five issues for the majority of tech start-ups.” The fact is that the government is fighting and risking much for a thing no one particularly wants. What start-up industries do require is a strong research environment, in particular a strong university sector; access to markets and in particular access to data and easy data transfer and storage; and the ability for talented individuals to move easily into the country, given that the vast majority of tech start-ups are founded by young individuals moving to the UK from abroad (typically for university). 

None of these things are aided by an overly paternalistic and undesired state aid regime, but they are harmed by poorer relations and a reduced closeness to the European Union, and a reputation for disregarding international agreements. The United Kingdom is indeed a very strong research environment, but this is predicated on the easy movement of academics and cooperation with universities internationally. Agreements regarding the laws around transfer and storage of data across different jurisdictions, vital for tech start-ups to expand, are only worth negotiating if you believe that the partner with whom you’re negotiating will respect such deals. 

The second supposed benefit is the provisions relating to preventing borders on East-West trade between Northern Ireland and Great Britain. The government is indeed correct that customs forms for exports from Northern Ireland to Great Britain do nothing to protect the integrity of the single market or the customs union, but this is not a hill worth dying on, particularly when such issues can be handled in negotiations on the future relationship. Equally, it is unfortunate that the flow of goods from East to West that are considered to be ‘at risk’ of movement into the Republic of Ireland is at the discretion of EU administrators, which does leave the situation that all goods would be determined to be at risk to be literally possible. It is however unlikely, and would be better handled by generating goodwill, not animosity and distrust.

The fact is that this was an uncomfortable compromise to address an uncomfortable contradiction. While May’s deal put the integrity of the nations of the UK in a place of greater priority than the ability of the UK to diverge on regulations, Johnson’s deal did the opposite, instead offering up Northern Ireland to the single market and the customs union in order to prevent a border between the north and the south. These are both legitimate options to preserve the Good Friday Agreement while pursuing an exit from the EU. What is not a legitimate option is to brazenly determine that the question is irrelevant and determine to ignore it. We should not once again be considering the possibility of a border on the island of Ireland. We already did this. Keir Starmer’s frustration that it is once again preventing a deal with the EU is understandable, and likely reflective of the sentiments of many following Brexit. The supposed benefit here is a risk of disregarding the Good Friday Agreement and the possibility of a return of the violence that the agreement successfully quelled. This ‘benefit’ does not sound like it is worth the cost.

It’s worth briefly addressing the claim that the Withdrawal Agreement is now null and void anyway because the EU has not been acting in “good faith” throughout the negotiations, as the agreement binds both parties to doing. It is definitely the case that the EU has not been easy to negotiate with, and share the same propensity for Johnson (and previously May) for brinkmanship and an aversion to compromise, largely for domestic consumption. That movement has been slow is a problem caused and borne by both parties. This, however, does not constitute acting in bad faith. “Good faith” does not mean being nice or being friendly, but rather not acting in such a way to frustrate the benefits any party in an agreement is entitled to  by acting in a way that may not be expressly forbidden by the contract, but is obviously not in keeping with the spirit of the agreement. The UK hasn’t been prevented from any benefit of the Withdrawal Agreement due to the EU’s negotiating style.

This legislation is ill conceived. The intended benefits are at best unwanted and unhelpful, and at worst risk a return to a resurgence of that horrible violence on the border which had been relegated to the past through amazing work that may now go to waste. The costs are far higher than has been presented, having the dual effect of undermining the liberal rules-based order that has allowed us to thrive, and undercutting one of the tenets of UK international power. The attempt to codify the single UK market has been done without consideration of the importance of each nation in our union. The House of Commons should act as a constitutional check on an overreaching and reckless executive and reject this legislation, thus demanding respect for international law and respect for the British constitution regarding the powers afforded to nations.