Intergovernmental relations and the UK “Internal Market”

Intergovernmental relations (IGR) in the UK are largely informal. These allow for joint working between the UK, Scottish and Welsh Governments and the Northern Ireland Executive, as well as resolution of disputes.

A recent White Paper on the UK Internal Market says that existing IGR mechanisms will have to be “expanded” to account for forthcoming legislation. The UK Government is also considering “tasking an independent, advisory board” to report on the functioning of the UK Internal Market.

This Insight examines the intergovernmental aspects of that White Paper. It looks at IGR as they stand, the proposed changes and concerns from the Scottish and Welsh Governments.

Intergovernmental relations in the UK

Most of the present machinery for intergovernmental relations dates from the creation of devolved legislatures for Scotland, Wales and Northern Ireland in the late 1990s. A Memorandum of Understanding (MOU) between the four governments was published in October 1999 and last updated in 2012.

The MOU established a forum called the Joint Ministerial Committee (JMC), which comprises ministers from the UK and devolved governments. This meets in plenary and in various sub committees.

The JMC has been criticised for being non-statutory and for inadequate dispute resolution procedures. On 14 March 2018, the Prime Minister and First Ministers of Scotland and Wales agreed to “review and report to Ministers on the existing intergovernmental structures.” This review is ongoing.

Common Frameworks and IGR

Also ongoing is the Common Frameworks programme. This aims to formalise intergovernmental policy development and decision making in areas which, at the end of the Brexit transition period, will no longer be exercised via the European Union.

In October 2017 the UK, Scottish and Welsh Governments (and later the Northern Ireland Executive) agreed that, where necessary, frameworks should be created to “enable the functioning of the UK Internal Market whilst acknowledging policy difference.”

Depending on the nature of powers coming back from the EU, the White Paper states that the Common Frameworks “may facilitate the setting up of new bodies and forums to take on functions previously captured through EU structures.”

But the White Paper also makes clear that Common Frameworks “on their own cannot guarantee the integrity of the entire Internal Market.”

IGR and the UK Internal Market

The UK Government therefore proposes to expand current IGR mechanisms and task an “independent, advisory body” with two functions: regular monitoring of the UK Internal Market and consultation with stakeholders.

The White Paper does not provide many details about this body. Instead it lists two “design rules”:

  1. fostering collaboration and dialogue
  2. building trust and ensuring openness

Speaking in the House of Commons, Business Secretary Alok Sharma said the UK Government’s proposals were “designed for co-operation between all four nations.”

Jess Sargeant at the Institute for Government says it is not clear how this new body would function. If, for example, the Scottish Government were to adopt different food standards than England, then “there is going to have to be some kind of way [the body] prevents the devolved legislators passing Acts which are in direct contravention of those principles” (mutual recognition and non-discrimination).

The White Paper appears to rule this out. It says an independent body will not make “third-party determinations that directly overturn the actions of elected administrations.” In the Commons debate on the White Paper, Shadow Business Secretary Ed Miliband said this commitment was “far too weak.” He said the functions of any independent body should be “agreed by all four nations.”

Devolved administration concerns

The Welsh Government believes any advisory body should possess “independent oversight and dispute resolution.” It says any “attempt to unilaterally impose a system will be deeply damaging.”

SNP politicians also have concerns. In the Commons, the SNP MP Patricia Gibson said an “unelected body” could end up determining “whether Bills passed in the Scottish Parliament meet a new test before they can be considered competent.”

Following a plenary meeting of the Joint Ministerial Committee last week, Mike Russell, the Scottish Government’s Constitution Secretary, said he and his colleagues would recommend the Scottish Parliament withhold legislative consent for the UK Internal Market Bill and review its work on Common Frameworks.

The Scottish Government also intends to seek “alignment” with EU Standards via separate legislation by the end of 2020.

Review of Intergovernmental Relations

The White Paper says its Internal Market proposals will “need to account for the Review of Intergovernmental Relations.”

On 3 July 2019, the UK’s four governments agreed Draft principles as part of that ongoing review. There has been no subsequent update on progress. The Dunlop Review has also yet to be published. According to media reports, this recommends that IGR “need to be more of a joint endeavour.”

In a letter to Mike Russell, Michael Gove, the Chancellor of the Duchy of Lancaster, referred to “restarting” work on the review of IGR. In a similar letter to Jeremy Miles MS, the Counsel-General for Wales, Mr Gove said he hoped “to accelerate this over the summer.”

Further reading


About the author: David Torrance is a researcher at the House of Commons Library, specialising in devolution and the constitution.