The UK Internal Market Bill 2019-21 will return to the House of Commons for consideration of Lords amendments on 7 December. This paper explains the central issues and the reasons for the amendments.
The motion for debate
The UK is required to send an annual Convergence Programme to the European Commission programme reporting upon its fiscal situation and policies. The requirement comes from Article 121 of the Treaty on the Functioning of the European Union (TFEU). Article 121 forms part of the legal basis for the Stability and Growth Pact.
Article 121 will continue to apply to the UK while it remains a Member State and during the transition period, if the Withdrawal Agreement is ratified by both the UK and EU.
Section 5 of the European Communities (Amendment) Act 1993 requires that the content of the UK’s submission must be drawn from an assessment of the UK’s economic and budgetary position which has been approved by Parliament. The motion will ask the House to approve the Budget Report and documents from the Office for Budget Responsibility, so that they can form the basis of the UK’s submission:
Debate on a Motion on Section 5 of the European Communities (Amendment) Act 1993
That this House approves, for the purposes of Section 5 of the European Communities (Amendment) Act 1993, HM Government’s assessment of the medium term economic and fiscal position as set out in the latest Budget document and the Office for Budget Responsibility’s most recent Economic and Fiscal Outlook and Fiscal Sustainability Report, which forms the basis of the United Kingdom’s Convergence Programme.
The EU’s Stability and Growth Pact
The Stability and Growth Pact is the EU’s co-ordination mechanism for EU fiscal policies and requires Member States to avoid excessive government deficits. Article 121 and Article 126 of the TFEU from the basis for the Stability and Growth Pact.
Although the UK participates in the Stability and Growth Pact, by virtue of its protocol to the treaty opting out of the euro, it is only required to “endeavour to avoid” excessive deficits. Unlike the euro area Member States, the UK is not subject to sanctions at any stage of the process.
Further information and previous debates
On 25 March 2019, the Chief Secretary to the Treasury, Elizabeth Truss MP, published a written statement on the Convergence Programme and Section 5 of the European Communities (Amendment) Act 1993. Much of its content is replicated above.
Similar motions have been debated in previous years. Links to the three most recent debates are below: