The United Kingdom Internal Market Bill is something of an imperfect storm, provoking the ire both of the devolved authorities who consider it an unacceptable circumscription of devolved competence and those aghast that the Bill empowers ministers to act contrary to the UK’s international obligations. Today the Constitution Committee reports on the measure and doesn’t pull its punches. Its highly critical analysis is informed by several evidence sessions involving academics, legal experts and prominent parliamentarians including the Lord Chancellor.

Devolution

The Bill seeks ‘to preserve the UK internal market’ at the end of the Brexit transition period. It does so by introducing the principles of mutual recognition and non-discrimination of goods which together impose new limits on devolved competence; the devolution statutes are amended to this effect. Related measures seek to ensure ‘unfettered access’ of qualifying goods from Northern Ireland to Great Britain and mutual recognition of professional qualifications. The operation of the market access principles is criticised on several grounds:

• for the way in which they constrain the legislative capacity of the devolved administrations while Parliament remains legislatively supreme (giving a de facto privilege to legislation relating to England);
• for a failure to balance the principles of mutual recognition and non-discrimination with others that would facilitate diversity in policy-making across the Union;
• and for leaving to devolved administrations a narrower level of discretion than that permitted by EU law.

The Committee also questions the extensive secondary law-making powers in the Bill. These powers ‘could allow [the Government] to alter the competences of the devolved administrations in significant ways.’ (Summary) As such, the Bill ‘risks de-stabilising this integral part of the UK’s constitutional arrangements—at a time when it has never been more important for central and devolved governments to work together effectively.’ (Summary) The powers are extremely broad and the Committee calls for the removal of several of them, in particular a broad sweeping-up power in section 53(2) which allows powers under the Bill to be used to amend any other piece of legislation: ‘the most extreme form of Henry VIII clause, representing an indiscriminate rather than targeted approach to delegating powers to ministers.’ (para 125) It also notes that a number of powers in the Bill are not accompanied by any duty to consult with devolved administrations, far less any provision for joint decision-making equivalent to section 12 of the European Union (Withdrawal) Act 2018. Furthermore, the Committee is of the view that significant changes to the Act when passed should be made by primary legislation: ‘As the operation of the devolution arrangements and the respective power of the devolved institutions are constitutional matters, we would expect to see them amended by primary rather than secondary legislation.’ (para 4)

The Committee is critical of provisions which expressly empower the Government to spend in devolved areas, asking why these provisions are even in the Bill and insisting that the Government should explain how it intends to use this power, ‘what the processes would be for consulting the devolved administrations and how any such spending would affect block grant funding.’ (para 43)

Controversy also surrounds the oversight system proposed by the Bill. This will operate through a newly created Office of the Internal Market, a new body created within the Competition and Markets Authority. The Committee is concerned that the OIM is too close to the UK Government to fulfil its function as neutral arbiter. It suggests that the OIM should have been ‘established independently, under the joint control of the UK Government and the devolved administrations’. (para 35) How it will operate is also not fully explained and the Committee states that the Government ‘should seek to make the Office of the Internal Market more clearly accountable to the different legislatures in the UK’. (para 36)

The Committee is clearly of the view that much of the Bill’s purpose could have been achieved through the common frameworks process and improved intergovernmental relations. It notes the Committee’s own report on The Union and devolution where it set out six principles of Union: solidarity; diversity; consent; responsiveness; subsidiarity and clarity, proposing these as the basis for a consensual way forward. The Committee notes that the Bill does not even mention the Common Frameworks, far less explain how it intends the internal market regime to interact with these. It is also damning of the lack of progress in reforming intergovernmental relations, which ‘has damaged the relationship between the UK Government and the devolved administrations.’ (para 69) It notes that the Bill is landing on very dangerous political terrain and that its commencement ‘should not take place before the conclusion of the review of intergovernmental relations and the publication of the Dunlop review.’ (para 70)

The Rule of Law

Clauses 44, 45 and 47 are the locus for the Committee’s concerns about the Bill’s incompatibility with the rule of law. Clauses 44 and 45 empower a Minister of the Crown to make regulations which, among other things, ‘disapply, or modify the effect of’ parts of the Northern Ireland Protocol. Clause 47 would end the direct effect and supremacy of relevant parts of the Withdrawal Agreement made effective last January in the European Union (Withdrawal Agreement) Act 2020. When clause 44 and 45 powers are exercised, and clause 47 is brought into force, such would violate articles 4 and 5 of the Withdrawal Agreement and thus put the UK in ‘clear breach’ of its international obligations (para. 137).

The Committee finds such powers to be unprecedented. In a careful discussion of the contrary view, put in oral evidence by Sir Stephen Laws, the Committee also concludes that:

‘We consider the proposed breaches of international law in the United Kingdom Internal Market Bill unprecedented. We do not consider a ministerial refusal, due to legal uncertainty, to issue a statement of compatibility under the Human Rights Act 1998 to be analogous to the enactment of direct and unequivocal breach of a recently concluded bilateral treaty.’

(para. 162)

The Committee further concludes that the Bill ‘casts doubt on the UK’s willingness to abide by its international commitments.’ (para.161), and quotes the evidence of Sir Franklin Berman QC indicating that the consequences of a material breach of the Withdrawal Agreement by the UK could be ‘dramatic… explosive’ (para. 159).  The Committee makes three further observations on the relationship between respect for international law and the rule of law.  First, it agrees with the position of Lord Bingham that respect for the general idea of the rule of law requires a state to respect its international obligations.  Second, it finds that it is conceptually confused to invoke the doctrine of dualism as justification for the idea that the UK constitution condones ministerial violations of international law. Third, it finds the powers to be at odds with the Ministerial Code, Cabinet Manual and Civil Service Code (paras. 198-199, 210).  Of the much made-of argument that the powers are a mere ‘insurance policy,’ the Committee is direct and harsh:

‘A government that brandishes the threat of breaching its international obligations, even in “specific and limited” circumstances, is one that undermines the rule of law.’

(para. 181)

The Committee is equally concerned with the Bill’s powers in connection with the rule of domestic law. Clause 47(1) provides that any regulations made under clauses 44 or 45 have effect ‘notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent’. For good measure, this is defined further as including ‘any legislation, convention or rule of international or domestic law whatsoever’.  In last minute amendments at Report Stage in the House of Commons, the Government amended this provision to provide that the Human Rights Act 1998 could be applied to such regulations. However, the Committee notes that the amendments ‘modify fundamental features of the HRA’ by requiring courts to treat ministerial regulations as having the legal status of primary legislation under the HRA.  That means they cannot be quashed under section 6 of the HRA, which is the conventional constitutional position. The Committee expressed concern that clause 47 ‘seeks to alter the scheme provided in the HRA without wider consideration of its constitutional implications…’. (para. 180)

The principal rule of law problem – that ministerial regulations, a form of executive action the legislative scrutiny of which is a notorious weakness in the UK constitutional system  – therefore remains.  The Bill on its face seeks to put the clause 44 and 45 regulations beyond any legal challenge attacking their validity.  It does so not by blocking judicial review proceedings. Indeed, the Bill specifies on its face that judicial review proceedings challenging the lawfulness of the regulations can proceed.  It rather seeks to remove any substantive legal basis for a claim to succeed – and in that sense (in our view) goes far beyond any previous ouster clause (which have in the main been used to try to shield quasi-judicial determinations from further challenge).  In an evidence session on the Bill, the Committee asked the Lord Chancellor, Robert Buckland QC MP, to explain whether there was any possible basis on which the validity of such regulations could be successfully challenged.  The Lord Chancellor replied that:

‘while Clause 47 has important qualifications within it, it does not exclude the court’s ability to judicially review these regulations. There was never any intention or effect for there to be a general ouster of judicial review … regulations made under Clauses 44 and 45 are of course capable of being judicially reviewed under ordinary public law grounds. That includes what I think everybody is familiar with—grounds of vires, rationality, and legitimate expectation. All those questions are entirely legitimate questions that can be raised by applicants who seek to challenge these particular provisions.’

(quoted at para. 194)

However, given the clear text of clause 47, the Committee couldn’t agree:

‘We are not persuaded by the Lord Chancellor’s construction of clause 47. Clause 47 preserves, but also places significant limits on, the availability of judicial review. […] If enacted, such an exclusion of the judicial function would put ministerial regulation-making powers above the law in an unprecedented manner. It would be an unacceptable breach of the rule of law.’

(para. 195)

The exchange between the Lord Chancellor and the Committee demonstrates how the scheme in clause 47 is inherently problematic, if not confused. Given the jurisprudence of the courts relating to narrow readings of ouster clauses, the provision ‘threatens to draw the higher courts into an area of political controversy by requiring them to give meaning to a fundamentally unclear statutory provision.’ (para. 193)

Concluding comment

In the final part of its Report, the Committee reflected on the suggestion by various commentators that the principle of parliamentary legislative supremacy entails that anything done by Parliament is constitutional. Drawing on the evidence of Professor Mark Elliott in connection with the rule of law, it rejected that proposition as misguided:

‘We do not doubt that Parliament has the legal authority to enact violations of the UK’s international legal obligations. However, it does not follow that such action is consistent with the rule of law. Clauses 44, 45 and 47 explicitly authorise ministers to breach the UK’s obligations in international law and attempt to place significant limits on judicial review of certain regulations made under it. Those clauses represent a disregard for the rule of law.’  

(para. 229)

However spectacular the Bill’s implications are for the rule of law, we both take the view that its implications for the territorial constitution are even graver. All three devolved administrations recommend the refusal of legislative consent to the Bill. Even the Welsh Government, which has generally adopted a constructive approach to Brexit-related legislation, does not accept that ‘the measures proposed in the Bill are in any way proportionate to the objectives which the UK Government claims for it’, asserting that they ‘go far beyond the structure that may be needed to ensure economic and regulatory cooperation between the nations of the UK.’ The complete lack of consent to a measure that amends the devolution statutes and which is itself a ‘protected enactment’ under these statutes is troubling and calls into question the very viability of the Sewel convention itself.

Its cumulative concerns bring the Committee close to calling for the Bill to be withdrawn, arguing that the Government

‘has failed to explain why a combination of retained EU law, its existing powers to amend that law, and common frameworks could not provide the certainty required at the end of the transition period to secure an effective single market. Such an approach would obviate the need for the Bill.’

(para 62)

Since the Government is very unlikely to withdraw the Bill, the Committee highlights numerous ways in which it would benefit from material amendment. There is much in this report for the House of Lords to digest before second reading.

Jeff King is a Professor of Law at the Faculty of Laws, University College London

Stephen Tierney is Professor of Constitutional Theory, University of Edinburgh

The authors are Legal Advisers to the House of Lords Constitution Committee. They write here in a personal capacity.

(Suggested citation: J. King and S. Tierney, ‘The House of Lords Constitution Committee reports on the United Kingdom Internal Market Bill’, U.K. Const. L. Blog (16th Oct. 2020) (available at https://ukconstitutionallaw.org/))