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UK government publishes White Paper and consultation on UK Single Market

28 July 2020

Just when you thought the UK was leaving a Single Market, the UK government is worried about another one – the one within the four home nations of the UK.

It has published a White paper setting out options to protect the flow of goods and services in the UK’s internal market.

Why is this needed?

The government says that it needs to protect the flow of goods and services across the UK after the end of the Brexit transition period. From 1 January 2021, powers previously exercised at EU level will pass to the UK government and the devolved administrations in areas such as agriculture, environment, food standards, planning, procurement and certain areas of tax.

The government wants the UK to continue to operate as a coherent Internal Market, with a so-called Market Access Commitment to guarantee UK companies can trade unhindered in every part of the UK.

The government also says that a coherent approach to market access will drive efficient supply chains and opportunities for business growth and ensure fair price distribution for consumers. This will, according to the government, create business certainty and the clarity needed for investment decisions, while also protecting consumer prices and increased choice.

The government will consider tasking an independent, advisory body to report to the UK Parliament on the functioning of the Internal Market.

The white paper recognises the special status of Northern Ireland, which will remain a full member of the UK Internal Market while taking account of the requirements of the Northern Ireland Protocol keeping Northern Ireland within the EU framework.

What is the consultation about?

The government is consulting on embedding two principles in the UK single market: mutual recognition and non-discrimination.

Mutual recognition means that the rules governing the production and sale of goods and services in one part of the UK are recognised in the other parts of the UK, and should present no barrier to the flow of goods and services between different regulatory systems.

Non-discrimination means that it is not possible for one regulatory regime to introduce rules that discriminate specifically against goods and services from another.

Further, the consultation states that the UK Internal Market system will be driven by the following three overarching policy objectives:

  • to continue to secure economic opportunities across the UK;
  • to continue competitiveness and enable citizens across the UK to be in an environment that is the best place in the world to do business;
  • to provide for the general welfare, prosperity, and economic security of citizens.

These objectives will be supplemented by three supporting aims:

  • to continue frictionless trade between all parts of the UK;
  • to continue fair competition and prevent discrimination; and
  • to continue to protect business, consumers and civil society by engaging them in the development of the market.

Finally, the UK Internal Market will also follow two main design rules: foster collaboration and dialogue; and build trust with business and maintain openness.

Controversy and next steps

The government has been accused to trying to undermine devolution but denies that the proposals will do this. It says “they will simply prevent any part of the UK from blocking products or services from another part while protecting devolved powers to innovate, such as introducing plastic bag minimum pricing or introducing smoking bans”.

However, the devolved administrations say that it will prevent them, for example, stopping poorer quality food imports as a result of a US or other trade deal.

The consultation ends on 13 August 2020. The government will then publish the response later in 2020, summarising the received responses and setting out the actions that will be taken in developing final proposals. It intends to ensure the passage of the Internal Market Bill before the end of the transition period.

 

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