The UK Internal Markets Act: implications for progressive local bans on low-welfare products

This is an updated version of a previous article, published prior to the enactment of the Internal Markets Act. The Internal Markets Act seeks to promote frictionless trade and avoid regulatory divergence between parts of the UK following the end of the Brexit Transition Period, now that EU law has fallen away. In this blog, Advocates for Animals paralegal Sam March discusses what this means for local bans on products such as fur or microbeads and potential future

restrictions on trade in products that either involve or cause harm to animals.

What is the Internal Market Act?

Although the UK technically left the EU at Midnight on 31 January 2020, virtually nothing changed in terms of the laws governing the free movement of goods and services until 31 December 2020. Up until that date there was a “Transition Period” which was agreed upon in the Withdrawal Agreement, under which the UK essentially remained bound by EU law.

Following the end of that period, EU law began to fall away. Hundreds of powers previously exercised at EU level flowed directly to the UK Government and the devolved administrations in Edinburgh, Cardiff, and Belfast. That could potentially have given these administrations more power than they have ever had before.

Generally, the powers enjoyed by these devolved administrations are contained in the acts of devolution; a series of acts passed between 1998 and 2006. These acts came into force over two decades after the primacy of EU law in UK law took effect in the UK under The European Communities Act 1972. This means that, for as long as there has been devolution in the UK, integration and frictionless trade between the home nations has been ensured by the same free-trade laws that govern integration and frictionless trade between the member states of the EU.

Without some new legislation, a power surge to the devolved legislatures after December 31st could have seriously impacted the way goods and services were traded between England, Wales, Scotland and Northern Ireland: each of the home nations would have been free to set their own standards or even enact protectionist regimes, thus creating new barriers and additional costs and uncertainty for businesses.

In response to this risk of regulatory divergence, the UK Government introduced The UK Internal Markets Bill (“the Bill”). That Bill was enacted on 17 December 2020 and The United Kingdom Internal Market Act 2020 (“the Act”)has now come into effect. The government claimed this legislation would “protect our highly integrated market by guaranteeing that companies can continue to trade unhindered in every part of the UK after the Transition Period ends”. It sought to do this by giving force to the UK’s own version of the kind of market access principles that govern free trade between unions such as the EU. Of particular importance is the principle of “mutual recognition”. S.2(1) and s.2(3) provide that goods which can be sold without contravening “relevant requirements” in the originating part should be able to be sold in any other part of the UK, without being held to contravene “relevant requirements” that would otherwise apply to their sale in the destination part. Essentially, if goods can be lawfully sold in one part of the UK, they will be able to be lawfully sold in other parts of the UK, even if on the face of it they do not comply with local laws or standards.

Why is this relevant to animal law?

One approach that animal advocates have often taken to advancing animal protection law is to push for bans or stronger regulations on products that are either dangerous to animals or wildlife or involve harming animals during their production, or products which indicate low welfare standards. Nationwide advances in laws that protect animals and their environments are often slow and hard fought, so sometimes progress has to be made incrementally through regional or local measures. Such measures may be rolled out by devolved legislatures, or even trailblazing local authorities. For instance, at the level of a devolved legislature, The Environmental Protection (Microbeads) (Scotland) Regulations 2018, criminalised the manufacture and supply of rinse-off personal care products which use microbeads as an ingredient in Scotland. At the local authority level, clause 38 of Islington Council’s Street Trading Licence Conditions included “products containing real fur” on the list of goods that cannot be sold in Islington market. The fear for animal protection groups is that the mutual recognition principle would invalidate these kinds of measures, or render them ineffective.

What will The Act mean for local measures that restrict trade in lower welfare products?

The good news is that the Act does not seem to interfere with the kind of powers that have been used by individual local authorities to adopt this kind of progressive measure. Although in everyday usage, Islington market might well be considered a “part of the UK”, it seems fairly clear from the way sections s.4(2) and s.58 is drafted, that there are only four “parts” of the UK for the purpose of this Act: England, Wales, Scotland and Northern Ireland. This Actis about statutory requirements that restrict or prohibit trade in certain types of goods in an entire “part of the UK”. As local authorities are not “parts of the UK” in their own right and local measures are not the kind of statutory requirements at which the Act takes aim. It seems unlikely that the Act would prevent, for instance, a hypothetical local council from amending the lease for shops in a council-owned covered market to prohibit the retailing of live decapod crustaceans.

The risks for animal protection appear instead to lie in the effect that the Act will have on “relevant requirements” effective at the level of an entire home nation.

With a few limited exceptions, the Act prevents an individual home nation from enforcing “relevant requirements” against products originating from another home nation wherein such requirements do not apply. The Act’s definition of “relevant requirements” is broad: unless explicitly excluded within the Act, a statutory requirement that prohibits the sale of goods (or amounts to or results in one in practice) will be a “relevant requirement” if it relates to the characteristics of the good, presentation, labelling, certification, registration, approval, authorisation, inspection, assessment, documentation, production (explicitly including the rearing, keeping and slaughtering animals), matters relating to the identification of animals (such as microchipping) or “anything else which must or must not be done to or in relation to the goods before they are allowed to be sold”.

In order for a relevant requirement in one part of the UK to be effective against products originating from another part, it would need to fall within one of the limited and exhaustive exceptions set out in the Act. There are a number of categories of exempted requirements specified in an exhaustive list in Schedule 1. This includes:

1. Threats to human, animal or plant health; This would have limited use for welfare or the health of individual animals. This is about preventing or reducing the movement of a pest or disease which poses “a serious threat” to the health of humans, animals or plants. There must be a reasonable belief, supported by evidence that has been provided to the other administrations, that the originating part is affected and that it is significantly less prevalent in the destination. The legislation must be reasonably justified as necessary [Para 1].

2. Unsafe food or feed; This relates to food or feed that poses a serious threat to the health of humans, animals or plants, and has similar conditions to the above [Para 2].

3. Public health emergency; meaning a situation reasonably considered to post “an extraordinary threat to human health in the destination part” [Para 5].

4. Chemicals; this is an exception limited to certain goods covered by the Registration, Evaluation, Authorisation and Restriction of Chemicals (retained EU law) [Para 6].

5. Fertilisers and pesticides; this is an exception limited to goods covered by certain retained EU law pertaining to fertilisers and pesticides [Para 9].

6. Taxation; the principles do not prohibit tax/rates/duties/charges [Para 10].

7. The relevant requirement has effect in more than one part of the United Kingdom [Para 11].

The list is exhaustive, and does not include the welfare of individual animals, or even environmental protection: whether fur, microbeads, live lobsters, chlorinated chicken, non-stun slaughtered meat, it is difficult to see how any of these kind of low-welfare goods could be brought within the limited exceptions above. England, for example, could ban Salmon farming in England, but it could not stop Scottish salmon producers from trading their products in England. In fact, an attempt to enact such a ban would simply mean Scottish manufacturers would be free to inundate the English market, with no local competition.

The only other exemption relates to requirements which pre-date the Act. A requirement which on the face of it would be relevant will not be treated as such if, on the day before the Actwas enacted, there was no corresponding requirement in “each of the other three parts of the United Kingdom” [s.4(1)]. The conditions are also met if such a requirement is re-enacted or changed without change to its substance. This suggests that Scotland’s existing prohibition on microbeads in personal hygiene products would stand and continue to apply to products containing microbeads even where produced in another part of the UK. However, it would seem that an attempt to roll out the restriction to new uses of microbeads would apply only to products produced and sold solely in Scotland, leaving companies from England, Wales and Northern Ireland free to do business in Scotland as they would at home.

Were devolved countries able to implement tougher measures whilst in the EU?

Market access principles are not new to the UK and have been effective at the EU level for decades. However, in EU law, unless a product is covered by a specific harmonisation directive, states can rely on slightly broader categories of exception to justify restrictive measures on certain goods notwithstanding that they may be lawfully produced and sold in other states.

Except where a product or industry falls under a specific harmonization directive, Art 36 TFEU ensures that EU free movement laws do not preclude prohibitions or restrictions on imports, exports or goods in transit which are justified as necessary and proportionate on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. These exceptions are somewhat broader and leave more room for debate than those that would come into force in the UK under the new Act.

Furthermore, where the restrictive measures are indistinctly applicable (meaning that they apply to all products irrespective of their natural origin), the measures can be justified either under the Art 36 exceptions above or alternatively by relying on the approach set out in the “Cassis de Dijon” case (Case 120/78). That case is the textbook case on mutual recognition in EU law, it clarified the general rule that established the general principle, similar to that introduced by the UK Internal Markets Act, that products sold lawfully in one Member State may not be prohibited from sale in another. However, in EU law, where a requirement would prohibit such a sale, the Member State could justify the prohibition if it was necessary to fulfil a “mandatory requirement of the state”. Such requirements include the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions or the defence of the consumer. Unlike the list in The UK Internal Markets Act, this list is not exhaustive. In Case 302/86, which concerned a mandatory system of returnable containers for beer and soft drinks in Denmark, the list of exceptions was held to include the protection of the environment. This may explain how Scotland has been able to enact its ban on microbeads in cosmetics. In Case C-219/07, the Court noted that the protection and welfare of animals can be a legitimate objective in the public interest. It also stated that the importance of this objective was reflected, in particular, in the adoption by the Member States of the Protocol on the Protection and Welfare of Animals, annexed to the Treaty establishing the European Community. Given the narrow categories of exception under the UK Act, it does seem like it will be more difficult for individual home nations to justify unilaterally-imposed progressive bans.

The end of the Transition Period could be an opportunity to see more progressive animal protection laws coming out of the UK than even before. As the UK will no longer be bound by the market access principles at the EU level, it could use this opportunity to enact higher standards or more stringent bans than could previously have been effective under EU free-trade laws. Recent reports suggest fur sales could be banned after the Transition Period ends under plans being considered by the Department for Environment. The 2019 Conservative Party manifesto also claimed that the UK would be able to ban live shipments after Brexit, although it did not go as far as making a pledge to do so. It would be a shame if, just as the UK is faced with an unprecedented opportunity to raise standards, its new internal market structure incentivises a race to the bottom between the home nations.

Getting Advice

This blog post is not legal advice and should not be relied on as such. If you require legal advice on animal protection laws please contact info@advocates-for-animals.com