Westminster Rules? The United Kingdom Internal Market Act and Devolution

Abstract

As we mark the 25th anniversary of devolution, this research reflects on the most significant legislation impacting devolved governments— the United Kingdom Internal Market Act (UKIMA). Enacted in December 2020, authors argue UKIMA has undermined the authority and status of the devolved institutions and contributed to the erosion of intergovernmental trust. While the Act aims to ensure frictionless trade within the UK post-Brexit, it has been viewed as antagonistic to devolution, diminishing the authority of governments in Scotland, Wales, and Northern Ireland. The exclusions process for deviating from UKIMA’s market access rules lacks transparency and often allows the UK Government to override devolved decisions, creating a potential UK veto over devolved policy. Although UKIMA has fostered some cooperation, it risks stifling policy innovation at the devolved level. The new Labour Government, committed to resetting relations with devolved administrations, faces the challenge of addressing the tensions created by UKIMA. Labour did not commit to changing UKIMA in its manifesto, but this report argues that reform is essential for restoring intergovernmental trust and the authority of devolved institutions. This report provides an impartial analysis of UKIMA, its impacts, and reform options. The authors propose a range of changes to restore trust and cooperation between the UK and devolved governments, fostering a more balanced approach to policy-making across the UK.