Prime Minister urged overhaul of Internal Market Act to remove ‘barriers’ to policy-making

A group of 20 environmental organizations has urged the Prime Minister to overhaul the Internal Market Act, which they claim has had “unintended negative consequences” on policy-making across the UK.

The legislation was passed in 2020 to reduce regulatory divergence between the UK's four nations but has been criticized 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 “resulted in significant barriers to progress and added to the bureaucratic costs associated with with policy-making in every part of the UK'.

The groups pushed for “appropriate automatic exemptions” for policies in devolved administrations related to the environment or public health, saying: “One of the benefits of the devolution arrangement has been policy innovation and lessons learned.

The unintended consequences of the Internal Market Act include restrictions on how this policy development process will work in the future, to the detriment of all

Letter from 20 environmental groups

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

“The unintended effects of the Internal Market Act include restrictions on how this policy development process will work in the future, to the detriment of all.

“We would therefore request a specific automatic exemption for legislation in these two areas, perhaps by extending the functions of the Office of the Internal Market to assess whether any relevant future legislation is indeed designed to achieve these common objectives ».

The groups also raised questions about when an exception to the devolved law should apply and what is considered a “substantial change” under the law that would not be allowed in regulations passed before the law took effect.

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

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

“We recognize that parts of the UK may adopt different policies, so the law ensures a level playing field for businesses and consumers regardless of where they are, ensuring that the whole of the UK rises together.”

The most notable use of the law came earlier this year when UK ministers refused to grant a full exemption that would have seen glass containers included in Scotland's planned deposit refund scheme.

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