The EU Withdrawal Bill as it stands would return to the UK Parliament all powers currently exercised at EU level. This would give Westminster the ability to impose new legislation in over 100 policy areas that are technically devolved but in fact operate within the overarching constraint of EU law. The Government is now offering what Lidington described as “a very big change” to the bill: the bulk of these powers would now be devolved, with just a subset retained at Westminster.
A full list has yet to be published, but the devolved powers are expected to include many aspects of policing, justice, environmental protection and health. In around 25 areas, however, the Government believes that allowing each part of the UK to go its own way could undermine the “UK common market”, as well as the UK’s ability to meet certain international obligations.
In these areas – understood to include aspects of agriculture, fisheries, food safety and animal welfare – Westminster would create new “common frameworks” in place of EU law. Frameworks will be negotiated with the devolved administrations where possible, but Westminster will have the final say if agreement cannot be reached.
The Government’s central objective, Lidington made clear, is to limit regulatory divergence “to protect consumers and businesses who buy and sell across the UK”, and to ensure that Brexit creates “no new barriers for people across the nations of the United Kingdom”.
Lidington gave the example of how farmers and food producers are currently subject to a single set of requirements for hygiene and product labelling. The Government fears that full devolution would allow four different regulatory regimes to emerge, which, Lidington pointed out, would “make it more difficult and more expensive for a cheesemaker in Monmouthshire to sell to customers in Bristol”. Blessed are the cheesemakers, perhaps, but at what cost to the devolution settlements?
The Government is therefore determined to ensure that the devolved bodies cannot create economic barriers within the UK. But it was unclear from yesterday’s speech how the bill would be amended to achieve this end. One option is a general constraint that the devolved bodies cannot act if vital UK economic interests are at stake. A simpler approach is to spell out the precise areas where Scotland and Wales may not legislate.
Lidington confirmed that the Government approach to the bill is to allow for a “pause” while the UK and devolved governments agree the terms of replacement legislation for EU law. Crucially, however, if agreement is not reached, the bill would ensure that “the UK Parliament could protect the essential interests of businesses and consumers in every part of the Kingdom”.
In other words, Westminster would have the last word. And this is deemed unacceptable by the Scottish and Welsh Governments, who remain adamant that all powers should be devolved, and new frameworks jointly agreed.
Can a deal still be struck? Negotiations often go to the wire, as each side plays brinkmanship games to extract further concessions. Perhaps in the end the devolved governments will settle on a shorter list of areas where the will of Westminster should prevail. Perhaps the UK Government will, as we have previously suggested, set out legally binding rights for devolved ministers to be involved in the detail of future frameworks, with stronger and more transparent intergovernmental machinery to facilitate agreement and resolve disputes.
On the face of it, the UK Government’s offer is not unreasonable. The model now proposed is to devolve by default, retaining powers at Westminster only where necessary for defined economic and diplomatic purposes. But the problem is that this position has been reached far too late.
The Government’s approach thus far, including the publication of the Withdrawal Bill without properly consulting the devolved bodies, has undermined trust and made compromise harder. The SNP would perhaps have found a reason to object to the EU Withdrawal Bill in any form. But the UK Government’s behaviour perversely encouraged the formation of a coalition against it not only between the Scottish and Welsh, but also between the SNP and the opposition parties at Holyrood.
Despite Lidington’s urging, both devolved governments immediately and publicly declined his gambit. Indeed, the next move in Cardiff and Edinburgh will be to introduce separate EU Continuity Bills in an attempt to seize control of all the powers in question before the EU Withdrawal Bill completes its passage through Westminster.
The UK Government might then have to admit defeat, and allow all powers to flow straight to the devolved level after all. It would then face the challenge of agreeing new frameworks with Edinburgh and Cardiff. This would not be impossible – the Scottish and Welsh Governments agree that some new frameworks are needed. However, aside from being politically embarrassing, it would increase the chances of regulatory divergence – to the dismay of business.
Alternatively, therefore, the Government still might be tempted to reach for the nuclear button and push through the EU Withdrawal Bill without consent. That would seriously risk the stability of the Union and further damage relations between the UK and devolved governments. But it cannot be entirely ruled out. Time is running out, and the danger of brinkmanship is that one does in the end reach the brink.