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The significance of the Internal Market Bill

07 September 2020

By Tim Le Couilliard, Newgate Public Affairs

It was almost a year ago when Prime Minister Theresa May attempted, unsuccessfully, to steer the Withdrawal Agreement through Parliament; ultimately being rejected three times, and culminating in her resignation. The treaty was eventually signed on 24th January 2020, but yet it could be rather short lived. 

A new ‘Internal Market Bill’ is being drawn up that could fundamentally change the post-Brexit customs plans although Downing Street maintains that it is just to provide “minor clarifications in extremely specific areas.” Contrariwise, many commentators regard even the suggestion of the Bill as a controversial rejection of the Withdrawal Agreement, and one that will ‘override’ the legal basis for already agreed aspects of the withdrawal such as matters of state aid and Northern Ireland customs, as well as undermine confidence and trust in future agreements. 

This new Bill, set to ‘adjust’ the Withdrawal Agreement (which, bear in mind, is a signed, international treaty) is to be published in Parliament on Wednesday. According to the Government, the unilaterally proposed Bill amends “ambiguous language” of the Withdrawal Agreement, particularly over competition law. The EU has said the “full implementation” of the Withdrawal Agreement is a “prerequisite for the negotiations on the future partnership” between the EU and the UK. 

This week has seen Lord Frost, Britain’s lead Brexit negotiator, state that a free trade deal should not have one sovereign state having to abide by the laws of another. The Government is seeking to disentangle itself from the EU’s state aid rules, and has stated it is prepared to walk away from a free trade deal should it require. On the other side of the Channel, Brussels is accusing the UK of seeking unfair advantages on matters such as state aid and fishing policy.

The British Government has made it clear that it wishes to reserve the right to subsidise UK industry. Keen not to miss out on the ‘fourth industrial revolution’, the Government knows that it may do well to support Britain’s fledgling tech industry, unconstrained from state aid law. Put differently, Britain is placing greater faith in the chances of its own economy, rather than being a part of Europe’s.

Boris Johnson has publicly called on the EU to make compromises, and a deal, by the 15th October. Failing that, the Prime Minister has said that both sides should then “move on,” which would still be “a good outcome.” This marks the most explicit that the UK has been on holding its nerve over a no-deal - perhaps they’re not bluffing after all.