THE UK’s internal market post-Brexit has created tensions within the devolution settlement, a committee of MSPs has said.

Holyrood’s Constitution Committee said the Internal Market Act (IMA) placed more emphasis on open trade than regulatory autonomy, when compared to the EU single market.

The Internal Market Act was brought in by Westminster to regulate trade between the four nations of the UK in the wake of Brexit.

It was widely criticised as a "power grab", with a non-discrimination clause in the Act meaning that no UK nation can bar goods produced in another from being sold within their borders, even if those goods do not meet that nation's standards. 

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In a report on the internal market published on Tuesday, the MSPs said the fundamental basis of devolution was to decentralise power.

They said they also recognised the benefits of open trade across the UK.

Convener Clare Adamson (below) said: “We believe that policy innovation – being able to pass laws that are tailored to the situation in Scotland – is one of the key successes of devolution.

The National: Clare Adamson - SNP - Motherwell and Wishaw.May 2016. Pic - Andrew Cowan/Scottish Parliament.

“As a committee, we believe it is essential that outside the EU, devolution continues to provide at least the same level of flexibility.

“However, we have found that UK IMA places more emphasis on open trade than autonomy for the Scottish Parliament compared to the EU single market.”

She continued: “The UK internal market has created tensions.

“We will seek answers from the UK and Scottish Governments on issues raised in the report, as well as continuing to work with our counterpart committees across the UK.”

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Angus Robertson, SNP MSP and Holyrood’s Constitution Secretary, said the committee was “quite rightly demanding answers from UK ministers given the overwhelming evidence of what the Act is doing to devolution”.

“The report could not be clearer: the Internal Market Act has the power to automatically disapply Scottish legislation, fundamentally undermining laws passed by the Scottish Parliament and the Scottish Government’s ability to deliver the manifesto commitments on which it was elected,” he said.

“It confirms the deep concerns the Scottish Government has held about the Act since it was introduced.

“Indeed, it concludes that the weight of the evidence suggests that the Act undermines the devolution settlement, limits the powers of the Parliament to improve standards in policy areas like animal welfare, and acts as a powerful disincentive to policy innovation.”

A UK Government spokesperson said after the UK left the European Union a “vast number of powers have returned to Holyrood, the Senedd and Stormont from Brussels, ensuring that they each have more powers compared to when the UK was inside the EU”.

“The UK Internal Market Act was introduced in 2020 to preserve the United Kingdom’s internal market as powers previously exercised by the EU return to the UK, allowing people and businesses to continue to work and trade freely across the whole of the UK, and further strengthening our Union,” they said.