PM urged to review Internal Market Act to remove ‘hurdles’ from policymaking

A group of 20 environmental organisations have urged the Prime Minister to review the Internal Market Act, which they claim has had “unintended negative consequences” on policymaking across the UK.

The legislation was passed in 2020 to limit the regulatory divergence between the four nations of the UK, but has been criticised by devolved administrations as a “power grab”.

In a letter to Rishi Sunak, groups including Wildlife and Countryside Link, Wales Environment Link and Scottish Environment Link, have now urged him to review the policy, which they say has “led to significant hurdles to progress and added to the bureaucratic overheads associated with policy-making in every part of the UK”.

The groups pushed for “qualified automatic exemptions” to be made for policies in devolved administrations relating to the environment or public health, saying: “One of the benefits of the devolution settlement has been policy innovation and the learning of lessons.

“The most famous examples are in those two broad policy areas: the carrier bag charge (initiated in Wales and then adopted across the UK) and the ban on smoking in public places (initiated in Scotland and then similarly adopted across the UK).

“The unintended effects of the Internal Market Act include limitations on how this policy development process can operate in future, to the detriment of all.

“We would therefore urge a qualified automatic exemption for legislation in those two areas, qualified perhaps by expanding the operations of the Office for the Internal Market to assess whether any relevant future legislation is indeed designed to achieve those shared aims.”

The groups also raised issues with when an exemption to devolved legislation should be applied for, and what is considered a “substantive change” under the Act that would not be allowed to regulations passed before the Act came into force.

A spokesman for the UK Government said: “The rest of the UK remains the most important economic partner for Scottish businesses, and so the UKIM Act is absolutely vital to Scotland’s economy.

“For Scotland in 2019, 66% of purchases and 60% of exports were either to or from the rest of the UK. The Act supports this trade rather than preventing it.

“We recognise that parts of the UK may adopt different policies which is why the Act ensures equal opportunities for businesses and consumers no matter where they are located in, ensuring the whole of the UK will level up together.”

The Act’s most notable use came earlier this year, when UK ministers refused to grant a full exemption that would see glass containers included in the Scottish Government’s planned deposit return scheme.

As a result, the scheme was delayed, with the Scottish Government now aiming to launch at the same time as the UK-wide scheme.