What is the UK Internal Market Bill and why can it derail the EU-UK FTA talks?

As the House of Commons reports this morning, after the publication of the "UK Internal Market Bill", the UK Parliament will have three days of intensive debate and scrutiny on the United Kingdom Internal Market Bill. Published last Wednesday, the Bill sets out rules for the operation of the UK internal market- trade between England, Scotland, Wales and Northern Ireland- after the end of the transition period in January. It proposes:

  • The establishment of two legal principles, mutual recognition and non-discrimination, to ensure there are no new barriers for businesses trading across the UK, allowing a good or service to be sold anywhere in the UK without discrimination.

  • Giving UK ministers powers to modify or “disapply” rules relating to the movement of goods from Northern Ireland to Great Britain that will come into force from 1 January, via the Northern Ireland Protocol, if both sides cannot agree beforehand.

  • Powers to override previously agreed obligations with the EU in the Withdrawal Agreement on state aid - government support for businesses.

The Bill has proven contentious, particularly its provisions for Northern Ireland which would allow Ministers to unilaterally re-interpret and disapply parts of the Northern Ireland protocol, as well as ignore their legal obligations under both domestic and international law to enact the Withdrawal Agreement in full.

The EU has said this could derail talks over a future trade deal, and have warned the UK it could face legal action if it does not ditch the controversial elements of the Bill by the end of the month.

So what happens next?

The Government has confirmed it will push ahead with the Bill, which will have its Second reading later today. This will be the first opportunity for MPs to vote on the general principles of the Bill. If the Bill passes, it will then progress to Committee stage, where it will undergo detailed line by line scrutiny by MPs.

The Government has scheduled 2 days in Committee this week and 2 the week after. After that, there will be report stage and third reading before the Bill progresses to the House Lords.

Meanwhile, despite the rise in tensions, UK-EU negotiators will continue to hold talks on the future relationship, with Michel Barnier and Lord Frost to meet later this week.

Source: The Future Relationship Digest of the House of Commons

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