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This article, Paolo Palmigiano, head of Taylor Wessing’s UK Competition, EU and Trade practice, examines three key points to note about the UK Internal Market Bill.
Free movement of goods and services between the UK nations and mutual recognition
Currently, there are no obstacles to the movement of goods between England, Scotland, Wales and Northern Ireland. This is because standards such as labelling, food safety, and technical specifications are mostly set by EU legislation and apply to the whole of the UK, to allow the free movement of goods within the European single market.
The UK left the EU on 31 January 2020 but it is still subject to EU rules during the transition period, which ends on 31 December 2020. At the end of the transition period, EU rules will no longer apply and the power to legislate in those areas will return to the either the UK government or to the devolved administrations (if it is their area of competence).
The UK government has been concerned for some time that the various nations could adopt different standards and block goods of a different standard coming from another region. Therefore, the UK Internal Market Bill states that goods sold in one region should be recognised as sellable in all the others.
The devolved administrations have been very critical of the Bill. Their concern is that more powers should return to them and they disagree with the recognition of different standards. For example, what if Scotland wants to protect its citizens and would like to have a higher standard of food safety? According to the Bill, it would still have to accept lower quality food goods produced elsewhere in the UK for sale.
You can expect strong opposition from the devolved administrations and there are already talks about possible legal challenges.
The Bill mentions the possibility to grant subsidies, but it only states that ‘a Minister of the Crown may provide financial assistance, out of money provided by Parliament’. The Bill
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