THE Labour Government’s review of controversial post-Brexit legislation that gave UK ministers extended powers over devolved areas has left a “constitutional vulnerability” at the heart of the legislation, a legal expert has said.
The Internal Market Act (UKIMA) faced fierce criticism from devolved administrations when it was introduced in 2020 to regulate trade within the UK following EU withdrawal. They argued it enabled Westminster to override devolved decision-making in areas such as public health and food standards in pursuit of a unified UK market.
After winning power in 2024, the Labour Government announced it would be reviewing the legislation. The findings of the UKIMA review were published last Tuesday.
The review introduced procedural changes – including a mechanism to fast-track exclusions from the act where the economic impact is less than £10 million per year – and pledged to prioritise the use of common frameworks, post-Brexit agreements intended to manage formerly EU-governed policy areas collaboratively.
However, the review’s changes are not legally binding and could easily be reversed, Professor Thomas Horsley, a constitutional law expert at the University of Liverpool, said.
“All they've done is said, ‘these legal powers that exist, we commit politically to exercise them in accordance with what we agree in the common frameworks’,” Horsley said.
“But that is a political commitment, and we all know that intergovernmental commitments can be – even the strongest ones – can be disregarded by a particular recalcitrant government in London.
“So the constitutional vulnerability, if you want to put it like that, remains.”
He also said the £10m threshold below which UKIMA exclusions would be fast-tracked was a “low bar”, noting that it could be met by the turnover of a single company.
Following the publication of Labour’s review, both the SNP Government in Edinburgh and the Welsh Government in Cardiff welcomed changes to the exclusions process – but called for UKIMA to be fully repealed.
“However, it is our long-standing and consistent view that the act should be repealed and replaced with a system, underpinned by legislation, designed around the common frameworks.”
Scottish Constitution Secretary Angus Robertson hit out in stronger terms, saying UKIMA “introduces radical new uncertainty as to the effect of laws passed by the Scottish Parliament and effectively provides a veto to UK ministers”.
“Nothing set out in the UK Government’s response to the review changes this position, which is completely unacceptable,” he went on.
“The conclusion of the review falls well short of our stated position of repeal and replace UKIMA, and indeed short of the legislative change required to mitigate the most damaging aspects of the operation of UKIMA.”
Horsley said he could understand the argument being made by the devolved governments, that the “common frameworks can do it all” and UKIMA is unnecessary.
“It is precarious because if things don't get agreed through the common frameworks – or a future UK Government decides, well, these political commitments we made, we're changing our mind – the legal powers are still there,” he said.
“This review doesn't change the legal framework, it just says, wait a minute, we're going to park it in the background and we're going to try and work using more intergovernmental political mechanisms, the common frameworks.”
However, Horsley said that although the Labour Government’s review has resulted only in political pledges, it was “definitely a move in the right direction and a move that speaks to the ambition of the UK Government to reset relations”.
He went on: “There are other parts of UKIMA which are just not discussed. [The devolved governments] would like to reopen discussions around the direct payments that can be made from London in devolved areas. So there are things that are not so narrowly related to intratrade that are still rubbing up wounds.
“But in terms of just narrowly looking at UKIMA and the market access principles, there are some positive things there and some clear commitments from the UK Government towards more consensual policy making … which is very different to obviously the more abrasive approach which preceded under previous governments.”
In late 2024, Horsley was one of four constitutional legal experts to co-author a report on UKIMA which concluded that reform of the legislation was “essential to restore intergovernmental trust”.
Asked if Labour’s review had provided that essential reform, he said: “What this review shows is that there is more work to be done, but it's around those common frameworks.
“It's now shifting the attention to making the common frameworks work. These are not off-the-shelf things that are super functioning and solve all the problems.
“So the work between the governments now is going to have to be making those common frameworks work.”
Alexander stressed the importance of having a “well-functioning UK internal market” as part of the Government’s “ambition to improve economic growth for the benefit of businesses and people in all parts of our country”.
He added: “Latest figures show that trade between the four nations of the UK is valued at £129 billion and that it is particularly important to the economies of Scotland, Wales, and Northern Ireland.”
