9 September 2020

Ignore the nationalists’ complaints – the rules of Britain’s internal market should be set by Westminster

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Both the Welsh and Scottish governments are up in arms at the idea that the UK might actually be a United Kingdom with a functioning internal market and no barriers to trade between her constituent parts.

No, I wasn’t aware that was controversial either. As powers return from Brussels the question arises where the rights and responsibilities of lawmaking and governance should sit. In the case of the single market, the rules over standards and regulation sat at the level of that market. When that market was the European Union it made sense for the rules to be made at the EU level.

Now though, the UK is en route to leaving the single market at the end of the year. So the rules governing the market should, clearly, be set at the UK level – and that means at the UK level.

Westminster is actually being quite conciliatory to the devolved administrations by devolving power over environmental and agricultural rules to Stormont, Holyrood and Cardiff Bay. However, they’re furious about the idea that they be treated as equals on the basis of mutual recognition of standards.

Nationalists are throwing their toys out of the pram in large part because they know they’re running out of road on this issue. Once the powers are settled back in Westminster from Brussels, once mutual recognition is made the foundation block of regulation internally in the UK, and once there is the possibility of divergence between the UK and the EU, then selling independence becomes more and more costly.

Any break from the UK to get closer to the EU would entail barriers on the island of Great Britain. It would entail a border. It would entail paperwork and uncertainty. All the things these nationalist groups have pretended to care about for the past four years – only on a much larger scale and with much greater consequence for trade, investment, and jobs.

Whatever you think of Brexit, there will be some disruption between the UK and EU. It might be worth it to allow divergence and deeper relationships with other partners, it might be worth it to avoid the political union, it might be worth it to avoid the stultifying impact of the EU’s form of harmonisation that favours incumbents over new entrants. But it does come with cost. That cost is compounded between Scotland and the rest of the UK (some 60% of all Scottish exports go to England, Wales and Northern Ireland). Northern Ireland’s trade with Great Britain makes the mainland its largest trading partner, worth over £18.1bn a year, more than half of Northern Ireland’s total external trade in goods.

Sturgeon knows this. As ever, she wants to make this a battle over identity, a matter of the heart over the head. She wishes to sow discord and disunity. While the Welsh Attorney General’s pandering to soft nationalists and his own desire to expand his portfolio mean he’s making a fuss over nothing, but in doing so imperilling the union his party claims to support.

Ordinary Brits deserve to know the truth. What nationalists are demanding is not reasonable and should not be granted. The UK internal market has operated for centuries, even with different jurisdictions within our Kingdom. The ability to buy any good, or procure any service, as a British citizen from any other part of our country, is a right stitched into the fabric of our country.

Spare me the idea that Westminster controlling how certain funds are spent is “undermining devolution”. Shared funding currently spent by the EU will now be done and dealt out at the UK level — whether that’s long-run infrastructure projects (like the M4 relief road the Welsh Government has failed to build since its inception), or handouts and subsidies for pet projects. The main difference being that, if I dislike the bung handed out to Merthyr Tydfil’s amateur dramatics society, I’ll be able to vote out the guys that give it to them. That right was never in play when these powers sat in Brussels.

I don’t recall this outcry from nationalists when the European Union decided to spaff money up the wall on anti-dredging projects that increased flooding in the devolved nations, or even now that they’re proposing the Trump-lite ‘European Strategic Autonomy’ that will subsidise computer processors made in the EU. That’s all spending without their having any say, it crowds out private investment and it certainly has no democratic accountability.

Spare me too the suggestion that there will be a race to the bottom in standards. Nothing about the positions of Michael Gove or George Eustice suggest they are going to be lining up to be burning reams of red tape.

Spare me even more the idea that this is just a Tory ploy. These are the powers the people demanded return to Westminster in a UK-wide referendum four years ago. We may not want various powers to be used, or spending to be doled out, but the responsibility to do so should lie with our Parliament.

Trade is about trust, and our shared nation is about trust between partners too. Mutual recognition is all about trust as well. It means we trust lawmakers in Scotland, Wales, Northern Ireland and Westminster to ensure goods and services are safe and secure for our citizens in equal measure. It means we trust consumers in each to decide what and where they want to buy from and what risks they are willing to take. It could even be the beginning of how we transform trade between friendly states abroad — we should, for instance, trust the regulators of Canada’s provinces, the Australian Commonwealth, and New Zealand.

So what does this Internal Market do? It takes power from politicians and unelected bureaucrats and hands it back to consumers. It trusts you to make your own choices and it reminds us that our United Kingdom still has a purpose. That was a promise made in 2016 and it’s one that must be kept.

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Matt Kilcoyne is Deputy Director at the Adam Smith Institute.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.