NFU submits response to consultation on UK internal market

Gail Soiutar pictured on a farming landscape background_72311

The NFU has submitted a comprehensive response to the government's consultation on the functioning of the UK internal market.

Here, NFU chief EU exit and international trade adviser Gail Soutar explains the government's position.

She writes:

The UK government has published a White Paper on the UK Internal Market setting out two specific principles it wants to establish in UK law: mutual recognition and non-discrimination.

The government sets out that from 1 January 2021, hundreds of powers previously exercised at EU level will flow directly to the UK government and the devolved administrations in Edinburgh, Cardiff, and Belfast. Devolved administrations will have unprecedented regulatory freedom within new UK frameworks. This, it notes, is the single biggest transfer of powers to the devolved administrations in history, and will see new powers transferred in a total of 160 policy areas which intersect with devolved competence.

The NFU invited views from members to help formulate its response to the consultation.

NFU members: Click here to download the NFU's full response to the White Paper

Under the plans in the White Paper, the UK government aims to ensure that the UK continues to operate as a coherent Internal Market. A Market Access Commitment (built on two principles) would guarantee that UK companies can trade unhindered in every part of the UK. By enshrining the principle of mutual recognition into law, the government’s proposals would ensure regulations from one part of the UK are recognised across the country. The principle of non-discrimination would support companies trading in the UK, regardless of where in the UK they are based. The government says that these principles will not undermine devolution, rather they will simply prevent any part of the UK from blocking products or services from another part while protecting devolved powers to regulate.

  • Mutual recognition means that the rules governing the production and sale of goods and services in one part of the UK are recognised as being as good as the rules in any other part of the UK, and they should therefore present no barrier to the flow of goods and services between different regulatory systems.
  • Non discrimination will in the future mean that it is not possible for one regulatory system to introduce rules specifically discriminating against goods or services from another.

Common Frameworks

The UK government sets out that it is already engaging in a process to agree a common approach with the devolved administrations as part of its vision for the UK Internal Market. The Common Frameworks programme is the mechanism most advanced in its development to address regulatory coherence.

Common Frameworks are designed to support the functioning of the Internal Market, the management of common resources and the UK’s ability to negotiate, enter into and ratify trade and other international agreements. They aim to protect the UK Internal Market by providing high levels of regulatory coherence in specific policy areas through close collaboration with devolved administrations to manage regulation. The Common Frameworks do this by enabling officials to work together to set and maintain high regulatory standards.

However, the government says that 'Frameworks on their own cannot guarantee the integrity of the entire Internal Market. As they tend to be sector-specific, they do not address the totality of economic regulation or the cumulative effects of divergence, i.e. the consequences of regulatory difference in one sector that affects other sectors. Finally, they do not fully address the question of how best to substitute the wider EU ecosystem of institutions and treaty rights had on the UK Internal Market.'

The UK Internal Market legislation discussed in the White Paper complements Frameworks by providing a baseline level of regulatory coherence across a wider range of sectors.

Maintaining standards

The government says that its 'commitment to high standards within this will be unyielding, allowing us to protect those things most important to us, like our communities and our environment, while ensuring our future prosperity. The UK’s exceptionally high standards will underpin the functioning of the Internal Market, to protect consumers and workers across the economy. These high standards are neither dependent on EU membership nor on what is agreed in Free Trade Agreements signed with other countries. They are domestic standards. In many cases, the UK either goes beyond EU standards or is the first mover to improve standards before the EU. We will maintain this world-leading position moving forward.'

Under the government’s proposed approach, the devolved administrations would retain the right to legislate in devolved policy areas that they currently have competence, including for example food safety standards. The UK has some of the most robust standards on food, with world-leading food, health and animal welfare standards. It says it 'we will not lower our standards nor put the UK’s biosecurity at risk as we negotiate new trade deals. The government remains committed to promoting robust food standards nationally and internationally, to protect consumer interests, and ensure that consumers can have confidence in the food they buy. We will continue to protect human, animal and plant life and health, and the environment and continue to cooperate with stakeholders across all four parts of the UK via bodies such as the Trade and Agriculture Commission.'

Furthermore the government says 'we remain firmly committed to upholding our standards outside the EU and the European Union (Withdrawal) Act 2018 will transfer existing EU food safety provisions, including existing import requirements, into the statute book. These import standards include a ban on using artificial growth hormones in domestic and imported products and set out that no products, other than potable water, are approved to decontaminate poultry carcasses. Any changes to existing food safety legislation would require new legislation to be brought before the UK Parliament and the devolved legislatures. The Food Standards Agency and Food Standards Scotland will continue to ensure that all food imports comply with the UK’s high safety standards and that consumers are protected from unsafe food. Alongside this the UK will repatriate the functions of audit and inspections that are currently carried out by the European Commission to ensure that trading partners continue to meet our import conditions for food and feed safety, animal and plant health and animal welfare.'

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Governance, independent advice, and monitoring

Intergovernmental arrangements will have to be expanded to account for Internal Market legislation. Two independently undertaken functions are proposed. The first function will provide regular ongoing monitoring of, and reporting on, the health of the UK Internal Market as it develops. This will include monitoring the cumulative impacts across sectors or regions and horizon-scanning for emerging trends. The second function will be to proactively gather business, professional, and consumer views to strengthen the evidence-base needed for independent advice and monitoring.

Devolution

Alongside the White Paper, Michael Gove, the Chancellor of the Duchy of Lancaster (CDL) has written to colleagues in the devolved administrations, Jeremy Miles MS, Arlene Foster MLA and Michael Russel MSP. In each of the letters, CDL reiterates the UK governments' intention is 'to find ways administrations across the UK can work more closely and effectively together to support jobs and investment in all parts of our country'. He underlines the UK Government’s support for devolution, 'believing decisions are best taken at the level closest to the citizens they affect, be that local authorities, devolved administrations or across the whole UK'. Despite the letters of reassurance to the devolved administrations, the question of UK legislation from Westminster to oversee matters relating to devolved policy competences will be considered highly controversial and contentious. The Scottish Government has already described the contents of the White Paper as 'a power grab'.

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