Internal Market Bill Row: What the Government is trying to do and why it might fail | Vincent Lafortune

The Brexit Withdrawal Agreement

One of the flagship characteristics of the European Union is that all member states, since 1993, operate within a single market. The single market is best defined by the four freedoms of movement: of persons, goods, services and capital. These freedoms are in turn regulated by a multitude of rules concerned with guaranteeing a level-playing field spanning the Union.

Accordingly, State aid rules determine the extent to which national governments can lend capital to private companies to subsidize their activity or finance their projects. The rules are in place to prevent anti-competitive behaviour by national governments at the expense of other competitors in the single market. State aid is generally prohibited save for some special circumstances. 

As long as the UK remained a member state of the European Union, it too operated within the single market and was bound by these rules. This meant, notably, free movement of goods, services, capital and persons between Northern Ireland and the Republic of Ireland.

The UK’s departure from the European Union means that it will no longer enjoy the benefits of the single market, or be bound by EU State aid rules. Without a deal to economically align both the Republic of Ireland and Northern Ireland, the calcification of the Irish-UK border was inevitable. This proved problematic for free travel between Ireland and Northern Ireland, often understood as a concomitant of the framework established by the Good Friday Agreement. Although the topic of an invisible border is not expressly discussed in the Good Friday Agreement, it is widely accepted as a key ingredient in the overarching spirit of reconciliation promulgated by the 1998 peace accord.

Enter the EU-UK Withdrawal Agreement and, more specifically, Article 10 of the Protocol on Ireland. The Protocol provides for the preservation of free movement between Northern Ireland and its European neighbour. It does so by imposing two key duties on the United Kingdom. First, Article 10 provides very plainly for EU State aid rules to keep applying to the UK even after its departure from the Union. Second, goods entering Northern Ireland considered “at risk” of reaching Ireland would be imposed the relevant EU tariff. Were said goods to stay and be consumed in Northern Ireland, the business would subsequently be reimbursed by the government. Such was the negotiated scheme.

The Withdrawal Agreement was ratified at the European Council on 17 October 2019 between the UK Government and the EU. Boris Johnson campaigned in 2019 under the promise that were he elected, his “oven ready” Withdrawal Agreement would become law. Elected he was, and he made good on his promise with the Withdrawal Agreement Act 2020 which incorporated the entire Withdrawal Agreement.

The Internal Market Bill

On 9 September 2020, the UK government announced its plans to repudiate core parts of the Agreement it had itself secured less than a year before. It emphasized the need for the “seamless functioning” of the internal market after the end of the transition period on 31 December 2020. 

The Internal Market Bill is the blunt instrument tasked with dealing the fatal blow to the sections in the Withdrawal Agreement that the government dislikes and which it feels threatens the fluid functioning of the internal market. It is Part 5 of the Bill – entitled “Northern Ireland Protocol” – which is at the heart of the ongoing row. 

The most striking Clauses within Part 5 are 43 and 45. Clause 43 empowers the Secretary of State to “make provision for the purposes of domestic law in connection with Article 10” (of the NI Protocol). The kind of regulations within the reach of the Secretary of State are so vast as to even “disappl[y], or modif[y] the effect of, Article 10 [of the Withdrawal Agreement].” Clause 45 provides for Clause 43 to have effect “notwithstanding any relevant international or domestic law with which [it] may be incompatible or inconsistent”. This naturally purports to exempt regulations made under Clause 43 from the ambit of the Withdrawal Agreement Act and consequently that of the Northern Ireland Protocol.

What does this mean?

The Internal Market Bill essentially gives the executive the power to make secondary legislation which would be in violation of the Withdrawal Agreement. In that sense, it is plainly in breach of international law. This was admitted by Brandon Lewis, Cabinet minister, and sparked the high-profile resignations of Sir Jonathan Jones, Head of the Government Legal Department, Lord Keen QC, Advocate General for Scotland, and Amal Clooney, prominent Human Rights lawyer and UK envoy. Academics, legal professionals, and societies have also abounded to denounce the Bill.

The potential defence along the lines that the Government will not be breaking international law until Ministers actually use their powers under the proposed Bill has to be met with incredulity. For one, it is plainly clear that the Government intends to use these powers to ensure unfettered travel of goods between Northern Ireland and the United Kingdom in contradiction with the provisions in the Withdrawal Agreement. It clearly also intends to have its own State aid regime. Second, Article 5 of the Withdrawal Agreement requires both the EU and the UK to act in “good faith” and “refrain from any measures which could jeopardise the attainment of the objectives of this Agreement.” The Internal Market Bill is evidently such a “measure”. 

The Proposed Amendments

The original version of the Internal Market Bill was met with quite the uproar. In an attempt to quell the tumult, on 17 September 2020, the government proposed amendments.

The main relevant amendment is Clause 54, which would require the Secretary of State to obtain the House of Commons’ assent before using their power to enact conflicting regulations. Furthermore, the government unexpectedly conceded, in an amendment to Clause 45, that judicial review would be available to scrutinize ministerial decisions made under these sections. 

Yet, despite this surprising mention of judicial review, it is still hard to understand how it fits within the overall framework envisaged by Clause 45: the would-be section quite unashamedly purports to be a full-fledged ouster clause proscribing judicial scrutiny of ministerial actions.

Furthemore, while the vote to unlock ministerial powers appears to give democratic legitimacy to the use of ministerial powers, it is merely a case of putting lipstick on the conspicuous pig. The House of Commons is dominated by heavily whipped Conservative MPs. Dialogue would most likely be very limited, and so would democratic accountability. In any case, it goes without saying that whether the law is broken via a vote in the lower house rather than by a minister is of absolutely no import. Indeed, this is not a distinction international law draws.

Can The Bill Actually Survive?

A handful of high profile MPs have already said they would not endorse the Bill. These include Theresa May, Sajid David and Geoffrey Cox. Despite this, it is reasonable to assume that the Bill, amended as proposed, will safely make its way to Royal Assent. 

A more intricate question is whether the regulations made under what would become the Internal Market Act 2020 would stroll unscathed in the face of judicial review. As mentioned previously, Clause 45 is a nuclear ouster clause which purports to exclude the possibility for judicial review of the regulations made under Clause 43. The question is this: can Parliament actually provide for ministerial actions to be given effect despite their lack of legal basis? To do so would at first (and arguably last) glance seem to be an egregious violation of the rule of law where “law” is made by Parliament and Parliament only.

In an enlightening piece, Mark Elliott has argued that the courts would have two ways to ensure the preservation of judicial review despite Clause 45. The first is the Anisminic approach where the courts could adopt a very staunch interpretive stance and find that regulations made under Clause 43 are “regulations” only insofar as they conform with the law and judicial review principles. Clause 45 would therefore be rendered null since contravening purported regulations (which would not be “regulations” for the purpose of Clause 43) would not fall within the ambit of the ouster clause. 

The other option is much more drastic. If interpretive malleability is unavailable, the courts could potentially outright disavow the effect of Clause 45 from the standpoint of foundational constitutional principles. This possibility was most recently evoked in Privacy International (2019) (see notably paragraphs 119 and 144) and finds clear support, albeit in obiter dicta, from judges in the seminal case of Jackson (2005) (see notably Lord Steyn at paragraph 102). 

Either route to render Clause 45 essentially devoid of any effect would make regulations enacted under Clause 43 vulnerable to judicial review and quashing orders. This would thoroughly undermine the Government’s plans which are of course reliant on being able to by-pass the Withdrawal Agreement.

Whichever approach, if any, is preferred by the Supreme Court, it is fair to echo Mark Elliott’s “perfect constitutional storm” in describing the whirlwind the Bill would cause if enacted. A full-on collision between the judiciary and the executive-dominated legislator is increasingly inevitable. In light of other recent measures undertaken by the Government such as the inauguration of the “Independent” Review on Administrative Law, perhaps such confrontation is exactly what the Government is looking for. 

As far as it is concerned, the EU’s stance is clear: “if the Bill were to be adopted, it would constitute an extremely serious violation of the Withdrawal Agreement and of international law.” The Union has many tools at its disposal to contest the measures, but whether these may have any effect in the domestic context will depend first on whether the Bill and its contentious Clauses are eventually defeated in a domestic court.

Conclusion

The most dreaded possible consequence of this ordeal is the hardening of the border between Northern Ireland and its southern EU member state neighbour. The fear is that sudden new checks and border posts – which the renegation of the Withdrawal Agreement could decidedly require – would threaten political stability at the border.

There was no clear path ahead with Brexit negotiations having come to a standstill during the pandemic. With the very premise for a deal now in the Government’s crosshairs, the road is as muddied as it could possibly be.

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