The UK Internal Market bill: Brexit lightning rod or storm in a teacup?

The government’s plan to break international law was a shock to lawyers and international partners alike – but it will not stop the UK and the EU doing a deal, writes Raphael Hogarth


It is not that rare for a government to break the law. It is almost unheard of for a minister to admit to it.

It came as something of a shock, therefore, when Brandon Lewis, the Secretary of State for Northern Ireland, told the House of Commons that the UK Internal Market Bill ‘does break international law in a very specific and limited way'. Sir Jonathan Jones QC, the then Treasury Solicitor and the most senior lawyer in the civil service, resigned. So, some days later, did Lord Keen of Elie QC, the then Advocate General for Scotland.

The relevant rules of international law are contained in our withdrawal agreement with the EU, signed and ratified by the government earlier this year. Under that treaty, the UK must apply EU state aid law in respect of any measures affecting trade between Northern Ireland and the EU. It must also apply EU customs rules to trade between Northern Ireland and Great Britain.

Clauses 42-45 of the bill, if passed into law, would give ministers the power to make regulations about state aid, and the customs rules for goods travelling from Northern Ireland to Great Britain, which conflict with those treaty obligations. The wording of clause 45 could hardly be starker: regulations made by the minister would ‘have effect notwithstanding any relevant international or domestic law with which they may be incompatible’. It is not so much a statutory power as a statutory superpower.

That the government should try to give itself these powers came as a particular surprise for two reasons. First, the UK has long been a champion of the rule of international law. In the past two years alone, international law has been the basis on which the British government condemned Russia’s poisoning of Sergei Skripal, the Syrian government’s use of chemical weapons, the imposition of a national security law in Hong Kong and Iran’s nuclear programme. Next time a foreign ambassador is summoned to the Foreign Office for a dressing down, British officials must expect to hear adversaries defend their own breaches as ‘specific and limited’.

Second, it is just not clear what the government is up to. Sources in Number 10 initially briefed that the bill would give the UK’s negotiators greater leverage in Brussels, though it was anyone’s guess why. The explanation given in public – that ‘ambiguous’ provisions of the withdrawal agreement had to be clarified to avoid imperilling Northern Ireland if there is no trade deal – is unsatisfactory too. The powers are not limited to circumstances where the UK and the EU have failed to agree a trade deal and, in any case, they do not deal with the most incendiary and ambiguous treaty obligations of all, which concern checks on goods travelling from Great Britain to Northern Ireland.

More cynical observers, therefore, wondered whether the government might be trying to bounce the EU into walking out of the talks so that blame for any disruption would land on Brussels rather than London.

Yet both sides have carefully avoided a blowout that would kill a deal. The EU has a well-practised talent for converting political fights into legal ones, and EU leaders have put it to good use on the Internal Market Bill. As far as the EU is concerned, even before the offending powers are ever used – indeed, even before the bill becomes law – the UK has breached its treaty obligations twice over. It has breached Article 4, which contains duties to ensure full implementation of the treaty in domestic legislation. It has also breached Article 5, which contains a wider ‘good faith’ obligation to ‘refrain from any measures which could jeopardise the attainment of the objectives’ of the Withdrawal Agreement. If the powers were used, there could be further breaches, this time of the UK’s substantive obligations concerning customs and state aid.

In light of that legal analysis, rather than threatening to walk away from negotiations, the EU has instead commenced an action under the dispute resolution mechanisms in the withdrawal agreement. For breaches committed during the transition period, that means an ‘infringement’ proceeding by the European Commission, starting with a letter giving the UK notice of its breach and ending, if the UK does not fall into line, with an action before the European Court of Justice, as for a member state. The diplomats can then keep talking while the lawyers get ready to fight.

That leaves the most intriguing explanation of all: that the government picked this fight not in order to win it, but in order to be seen to have it before accepting the compromises necessary to do a deal.  That would, after all, echo the preludes to a withdrawal agreement last year. The government then burnished its Brexit credentials by threatening to ignore a statute which compelled it to extend the Article 50 period, and even proroguing parliament, before accepting some difficult compromises on the rules and duties that would apply to Northern Ireland.

Last time the prime minister used the ‘threaten to break the law, have a big row at home, then do a deal’ strategy, it won him an 80-seat majority in the general election that followed. To follow the same pattern must now be tempting, particularly as the potential disruption from leaving the transition period with no trade deal threatens to collide with the disruption of a second coronavirus peak. Many of the issues on which the UK and the EU disagreed at the start of the year, like the UK’s obligations on labour and environmental standards, are in any case no longer cited as sticking points by negotiators.

Kicking the Internal Market Bill issue into the legal dispute resolution mechanism has the added benefit of delay. The EU and the UK can continue to negotiate in the run-up to a key meeting of EU heads of state in mid-October, at which all sides expect the die to be cast, in favour of a deal or not. Crucially, the government has signalled that the bill, which has now cleared the House of Commons, will not go to the House of Lords until after the European Council meets. If a deal is done, the government could pull offending clauses from the bill when the legislation is scrutinised by peers afterwards, or at least agree to amend them into something more constitutionally palatable.

None of that is it an argument for complacency among defenders of the rule of law, for whom this bill will have made uncomfortable reading. After all, the government has asked parliament not only to authorise its minsters to place the UK in breach of treaty obligations, but also to place those ministerial decisions beyond the reach of any rule of domestic law.

Nor does any of this mean that a deal is a dead cert. The most contentious issues in the negotiation, in particular the UK’s obligations to restrict subsidies in order to ensure fair competition with the EU, could yet wreck the chances of agreement. But the controversial clauses of the Internal Market Bill will not. More likely, they will die a death in the Lords or sink into a litigation quagmire.

Published on 6 October 2020.
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Raphael Hogarth

Raphael Hogarth is an Associate at the Institute for Government and a pupil at 11KBW.