Hansard

On 4 July last year, a new Labour United Kingdom Government was elected on a manifesto commitment to “reset” relations with the devolved Governments. Few could fail to welcome that ambition and the chance to turn the page on the disastrous legacy of the previous Conservative Government.

Brexit delivered a double blow to Scotland. First, we were taken out of Europe against the wishes of the majority of Scottish voters, and then, Brexit was used to justify the systematic undermining of the powers of this Parliament—a Parliament for which the people of Scotland voted in a decisive referendum result a quarter of a century ago. Most significantly, that undermining came in the form of the United Kingdom Internal Market Act 2020.

I will briefly remind the Parliament of what the internal market act does. It was passed without the consent of the Scottish Parliament or of any devolved legislature. It introduces far-reaching and unpredictable new constraints on the powers of the Scottish Parliament. It provides UK ministers with an open-ended power effectively to nullify laws that are passed in this chamber. It enables UK ministers effectively to unilaterally alter the competence of the Scottish Parliament and Scottish ministers by allowing currently excluded matters to be caught by what are called “market access principles”.

In that last respect, I will set out the threat. It is a clear possibility, at the very least, that the next UK Government will be a right-wing Administration that is hostile to the national health service funding model. Just this month, the Labour Secretary of State for Health and Social Care said:

“Nigel Farage would introduce an insurance model and charge patients to use the NHS.”

The UK Labour Government itself believes, therefore, that the threat is there to the English NHS.

That is where the internal market act becomes dangerous for Scotland. Schedule 2 to the act allows a UK minister, at the stroke of a pen, to bring

“healthcare services provided in hospitals”

and

“other healthcare facilities”

in Scotland within “market access principles”. In other words, if healthcare services in England are opened up to much greater private provision, we in this Parliament could be powerless to stop that same process here. The act, therefore, is like a ticking time bomb under Scotland’s NHS—one that could be detonated at any time by an ideological right-wing Government at Westminster—and that threat needs to be removed.

The internal market act must be repealed. The previous UK Government insisted that the act was necessary to protect internal UK trade, and that it merely replaced the market rules that we had when we were in the European Union. That is not true. In place of broad legal principles of mutual recognition and non-discrimination, balanced by proportionality and subsidiarity tests, and sensible derogations for important policy outcomes such as public health and environmental protection, the act introduces rigid statutory requirements that apply automatically and in nearly all cases. It is flatly untrue that the IMA is necessary to protect intra-UK trade. It is perfectly possible to create a balanced, proportionate and rules-based system of regulatory co-operation, if there is good will and political imagination on all sides. That is what we have been trying to achieve through positive engagement with the other Governments of the UK in the development of common frameworks.

It is not just the Scottish Government that is clear that the act must go. The former Welsh First Minister Mark Drakeford described the act correctly as a “smash and grab” on devolution. Less than 18 months ago, the Labour Party in Scotland was clear about the threat that the IMA poses, when it backed a motion calling for its repeal. I hope that we will hear from Neil Bibby later in the debate, but during the debate of 3 October 2023, he said:

“the Conservatives passed the UK Internal Market Act 2020 even though the Scottish Parliament and the Welsh Senedd withheld consent. Members will recall that my party—the Labour Party—voted against that legislation here in Scotland and in Wales. We also opposed it at Westminster—that makes it all three Parliaments—because of the implications for devolution and concern about the market access principles.” —[Official Report, 3 October 2023; c 32.]

The Scottish Labour Party’s assessment of the act’s impact on devolution is just as correct today as it was in October 2023. The risk that the act poses to the Parliament and to policy innovation is felt across Scotland. Organisations from NFU Scotland to Alcohol Focus Scotland have made the risks plain. Just last month, Scottish Environment LINK called the act “entirely unfit for purpose” and said that it

“works directly against the principles of devolution”.

It warned of

“years of inertia, delay and uncertainty”

if the act’s impact on devolution is not addressed.

Against that background, last month, the UK Government announced a statutory review of the act. Despite the profound damage that it does to the powers of the Parliament, there was no substantive engagement with the devolved Governments or devolved legislatures on the scope and terms of reference of the review. The preferred option of both the Scottish and Welsh Governments, which is for repeal and replacement with a fairer, more transparent, and actually workable system of regulatory co-operation, has been unilaterally ruled out. As matters stand, we still face the prospect of laws that are passed in the Parliament being nullified at the stroke of a pen in Whitehall by whatever Administration is in power.