'Power surge' not 'power grab' says Gove but Welsh Government seeks assurance over internal market

Illustration of the UK's internal market
The new system sets out trading and other rules between Wales and the rest of the UK

The UK Government is publishing its plans for a UK-wide set of rules for cross-border trading, standards and other activities to replace European Union regulations from the start of next year.

Ministers in London say the "internal market" system will ensure smooth-running relationships between Wales, Scotland, England and Northern Ireland and will see ministers in each of the devolved nations gain significant extra powers.

It will affect a wide range of areas, from farmers selling Welsh lamb in England and Scotland, to manufacturers depending on supply chain companies in different parts of the UK.

It will inevitably limit changes that each of the devolved nations can make, because the aim is to ensure "seamless" trading and a "level playing field" across the UK. And that's what's caused political controversy.

The Welsh Government, which supports the principle, says it's been left in the dark about the proposals and has warned that any "attempt to impose a system will be deeply damaging."

The Scottish Government has called the plan a "power grab" and has hinted it will mount a legal challenge. Here, Plaid Cymru has also said that it "undermines" two decades of devolution.

The proposals are contained in a White Paper so will be subject to consultation before any legislation is drawn up.

UK Government sources say the proposals are "pro-devolution" and will strengthen both the decision-making powers of the devolved governments as well as ensuring fair play across the UK. 

Michael Gove said the UK Government will work with the devolved administrations on a new structure to share ideas better. Credit: PA

Cabinet Office minister Michael Gove described it as a "power surge" not a power grab and said: "We will work over the coming weeks with the devolved administrations in Cardiff, Belfast and Edinburgh on a new structure for how we can cooperate better and share ideas, and we will be bringing proposals to the table to agree a way forward."

The Welsh Secretary, Simon Hart, said: "For centuries Wales has been a vital part of the United Kingdom’s single marketplace, taking advantage of the opportunities that it has provided for our economy in areas like agriculture, industry, manufacturing and education."

He added: "It is vital for our shared prosperity and our ability to bounce back from the pandemic that people, products, ideas and investment continue to flow unhindered throughout the UK."

Welsh Secretary Simon Hart Credit: PA

A Welsh Government spokesperson said: "We support having rules across the UK to regulate the internal market, but these rules must be agreed between the four Governments in the UK, each of which has their own responsibility for economic development. Any new system must have independent oversight and dispute resolution.

UK Government sources say there have been detailed discussions with the Welsh Government and point out that nobody will have seen the White Paper before it is laid before parliament.

It seems that one assurance the Welsh Government is looking for may be realised. The First Minister has argued that the new system needs to be overseen by an independent body.

I understand that there will be an independent body ensuring the rules are fair but also that it won't be as strong as the European Union institutions it will replace. It's not clear whether or not that will be enough to placate the Welsh Government.

What is true is that Mark Drakeford and his ministers in Cardiff are supportive of the principle. Whereas the Scottish Government walked out of intergovernmental talks paving the way for the development of the new system and refused legislative consent, the Welsh Government eventually reached agreement.

Mark Drakeford said the new system needs to be overseen by an independent body. Credit: PA

It's more about the way it's brought into being: the Welsh Government wants it to operate by consent and not by imposition.

Talking of consent, whenever these proposals become legislation they will have to gain the legislative consent of the devolved parliaments.

However, as the consent votes on the EU Withdrawal Bill showed, the UK Government isn't legally bound by them and can ignore them.

At that time ministers in London repeatedly promised their pressing ahead without consent was a one-off in unique circumstances. If this develops into an argument, there could be another one-off waiting in the wings.

One more thing for long-term devolution watchers: don't expect much detail about the proposed replacement programme for European Aid. There won't be any explicit mention of the long-awaited Shared Prosperity Fund.

Liz Saville Roberts said two decades of devolution are being 'undermined' by Boris Johnson. Credit: PA

At least one party won't be reconciled to the proposals. Plaid Cymru's Parliamentary leader Liz Saville Roberts said: "For years we have warned that the Conservative Westminster Government was ready to grab powers back and this Bill marks another step down that path.“It seems two referendums and two decades of devolution are being undermined by Boris Johnson and his supporters in Westminster. Last time Labour in Wales capitulated, this time they need to show some backbone and make sure the powers that should rightfully come to Wales do just that."