Statement on Internal Market Bill and Withdrawal Agreement

My overriding principle to the Brexit debate is simple – we must get Brexit done. That is the promise that the Prime Minister and I made to the residents of Hastings and Rye, and that is what we will deliver on. The UK Internal Market Bill will help us in this endeavour.

As a member of the EU Future Relationship Select Committee, I have witnessed the EU’s intransigence time and time again on 3 main issues; fisheries, level playing field (particularly in terms of state aid) and governance. Michael Barnier, the EU’s Chief Negotiator, repeatedly criticises our Government and our negotiators for not compromising on these areas, but why should we? Other countries, such as Canada, Japan and others, as independent and sovereign countries, have not been required to consider these issues in their free trade deals with the EU.

Whilst the U.K. left the EU on 31st January 2020, we still need to negotiate our future relationship and implement the Withdrawal Agreement, which includes the UK’s agreed arrangements that need to be put in place to prevent a hard border between Northern Ireland and the Republic of Ireland.

The Internal Markets Bill (the Bill) legislates the free movement of goods, services and the recognition of professional qualifications from the 1st January 2021 where we might diverge from existing EU regulations. The issue under intense current scrutiny is the way the Bill changes the implementation of the Withdrawal Agreement and the Northern Ireland Protocol. It seeks to protect our internal markets, as outlined in the Political Declaration.

Clauses 40 and 41 of the Bill seek to ensure that in implementing the Northern Ireland Protocol, authorities have regard to Northern Ireland’s place in the UK internal market and the right of unfettered market access. Clause 43 of the Bill modifies the application of Article 10 of the Protocol which applies EU state aid rules to Northern Ireland. Clause 45 of the Bill requires that Clauses 42 and 43 (and regulations made under them) have effect notwithstanding any incompatibilities or inconsistencies with international agreements or domestic law and any regulations are not unlawful because of such inconsistencies.

Art. 4 of the Northern Ireland Protocol provides that Northern Ireland is ‘part of the custom territory of the U.K.’ and that nothing in the Protocol shall prevent the U.K. from including Northern Ireland in the ‘territorial scope of any agreements it may conclude with third countries, provided that those agreements do not prejudice the application of this Protocol’. The Art. 4 requirements are given effect via sections 7A-7C of the Withdrawal Agreement Act 2018 (‘the Act’). The Act uses the same kind of wording used in section 2(1) of the European Communities Act 1972, which was repealed by Clause 1 of the Act (repealing the European Communities Act 1972 - all EU power in the UK). The Act then went on to recreate EU powers for a transitional period, to ensure continuity of legislation.

Sections 7A to 7C effectively secured the ‘direct effect’ of EU law in respect of the Withdrawal Agreement and the availability and enforcement of its provisions without further enactment should the EU and U.K. fail to reach a free trade agreement. This means that if the Joint Committee does not reach agreement, certain EU laws will be become law in the U.K., for example, tariffs on all goods flowing from the U.K. to Northern Ireland. We cannot have this.

However, Clause 38 (1) to (3) deals with a Parliamentary Sovereignty. It is very clear that it is intended and recognised that the ‘Parliament of the U.K. is sovereign’ (Clause 38(1)) and that U.K. sovereignty subsists notwithstanding directly applicable or directly effective EU law during the transition period ie reimported EU powers. Vitally, Clause 38(3) states that ‘Accordingly, nothing in this Act derogates from the sovereignty of the Parliament of the U.K.’. This is clear intent of the sovereignty of the U.K. and that it was not signing up to anything which meant the European Court of Justice would decide our fate, nor to anything that meant we had to follow EU laws.

This means that Clause 38 requires that sections 7A-7C are read as not derogating from the sovereignty of Parliament. Clause 45 of the Bill reinforces this.

I absolutely agree that upholding the rule of law is a fundamental principle. Adhering to obligations under a treaty is part of the rule of law. The Internal Markets Bill is not yet passed as law – it is to be debated in Parliament, so it is not yet conflicting with, or ‘breaking’ a treaty. If the Bill is passed and becomes law, under the rule of law, our Parliament is sovereign and therefore the Bill is lawful. Importantly, the clauses in the Bill regarding state aid, tariffs between Northern Ireland and the status of export declarations will only need to be relied upon if the EU does not act in good faith and we fail to reach a free trade deal; it ensures that the integrity of U.K. sovereignty is not undermined.

Under the Withdrawal Agreement, the EU and the U.K. committed to establish a Joint Committee to deal with the application of the Agreement, which has been meeting for the past few months. If we do not reach the end of the transition period on 31st December this year with a free trade deal, the Prime Minister is right to ensure a safety net by virtue of the Internal Markets Bill. No British Prime Minister could accept trade flows between Northern Ireland and the rest of the U.K, being governed or disrupted by an external power, the EU. If there is no free trade agreement, we have no choice but to protect our Union. The U.K. needs powers in reserve to ensure that the Good Friday Agreement, as well as our Union, is protected. These powers are provided for in the Internal Markets Bill. The Prime Minister is essentially putting the Good Friday Agreement before the Withdrawal Agreement and if he needs to include clauses in the Internal Markets Bill which conflict with the Withdrawal Agreement to protect our Union, then so be it. It might urge the EU to act in good faith and agree a free trade deal. The government has been put in this position only because the EU has failed to honour its side of the Withdrawal Agreement and is failing to act in good faith.

Sir David Frost, the U.K.’s negotiator, is very clear that the EU has not been acting in good faith regarding the third country listing of the U.K. as regards food products. On 14th October 2019, the UK secured approval to continue exporting animals and animal products to the EU if we left without a deal on 31st October that year – providing certainty for a market worth around £5.7 billion a year.

The then Environment Secretary Theresa Villiers confirmed that EU member states had granted the UK ‘national listed status’, which ensures exports of live animals and products of animal origin, such as meat, fish and dairy, could continue.

The EU is disingenuous by saying that it now cannot guarantee that it will list us as a third country because it does not know what our regulations will be on food. It knows full well that we have retained EU regulations and will ensure we keep the same standards, if not better, from 1st January 2021, but that if any changes are proposed they will be notified to the EU and the World Trade Organisation with plenty of lead time, as other countries listed with the EU do, without any sort of commitment about the future required by the EU. Sir David reports that the EU has explicitly stated in recent talks that if the U.K is not listed we will not be able to move food to Northern Ireland. He reports that the EU’s position is that listing is needed for Great Britain only, not Northern Ireland. If Great Britain is not listed, it would automatically be illegal for Northern Ireland to import food products from Great Britain. We cannot have this.

Hence, the relevant clauses in the Internal Markets Bill is intended as a safety net to ensure protection of our Union and the Good Friday Agreement in the event that agreement between the EU and the U.K. cannot be made.

It is well known that negotiations for a free trade deal, which would negate the Withdrawal Agreement, have been fraught, with the U.K. not prepared to give way on our sovereign waters,

certain state aid aspects of the level playing field and governance. The EU is intransigent over these three main areas. Instead of blaming the UK’s Prime Minister and negotiating team, it is the EU which must act in good faith to secure a free trade deal, or it will have to accept that the UK can confirm our sovereignty in primary legislation by way of amendment to the detail of the Withdrawal Act. It is the EU which cannot accept UK sovereignty by not agreeing a free trade deal that it signed up to do.

There is a bigger picture here to remember. On the 23rd June 2016 the British people gave an instruction to the Government and Parliament, that the UK will be leaving the EU. Four years later, we now have a Conservative majority Government elected to get Brexit done. That was our promise in December 2019 and I am determined, as is the Prime Minister, that we deliver on that pledge.

The British public want us to get on with delivering Brexit and it is our responsibility to do so. Faced with the choice of supporting our Union or the European Union, I know whose side I am on.