By Colin Borland
Even before the shock announcement that it would contain provisions to override parts of the EU withdrawal agreement, the UK Government’s Internal Market proposals were controversial to say the least.
The international law angle – and the subsequent deterioration of the EU trade deal talks – have understandably dominated the debate in the last week or so. But there’s also a lot in the Bill that could affect the domestic market and the small businesses who trade there.
Many of those firms remain focused on nothing but surviving and recovering from the Covid crash, and discussions about intergovernmental frameworks can seem a bit tangential when you’re trying to drum up enough business to pay your staff at the end of the month.
But, even if the theory seems remote, we cannot ignore the practice. We need to be thinking now about how any new systems will impact on daily business.
That is, at the moment, easier said than done. There’s a lot of fine detail and hard politics still to get through.
We can, though, at least try to judge the UK Internal Market Bill’s proposals against the criteria that small businesses will tell you they need in any trading environment: simplicity, affordability, certainty and fairness.
On simplicity, we all want to maintain frictionless trade across the UK. Around 40 per cent of FSB members sell across the UK, so it’s a big market. Neither do we want unnecessary barriers to our EU customers and suppliers.
It has to be acknowledged, though, that a number of long-standing regulatory differences already exist across the four UK nations and they don’t, as far as we can see, create particular barriers to trade within the UK.
Nevertheless, it is sensible to develop agreements on common standards in those areas where EU legislative competence no longer applies. That helps small businesses reduce any unnecessary costs, including production and administrative costs, associated with regulatory compliance.
If done properly, this should provide for a more certain, stable regulatory environment. However, it depends on the four nations jointly developing and agreeing how the internal market will work. That means they all need to be committed to co-operation and compromise – taking an equal share in the joint enterprise.
Key to the market’s effective functioning will be a robust and independent body to which governments and businesses can take disputes that cannot be resolved through discussion. And, to be robust and independent, all parties need an equal stake in its operation and to agree to abide by its judgements.
Because there will be disputes. For example, a key principle of this Bill is that none of the governments across the UK can discriminate against a person, good or service, from another home nation. And what this will mean in practice is, of course, going to be open to interpretation.
So it’s only fair that, when a small business feels that a rule is operating in a way that discriminates against it, it can turn to an impartial arbiter, rather than having to dig deep and go to court.
Similarly, small businesses which want to win their fair share of public contracts should not lose out because anti-discrimination rules prevent every part of the public sector in an area coming together to agree a buying strategy that helps local smaller firms.
When we still don’t know what the post-EU trading environment will look like, it’s going to be more important than ever that our domestic market runs on collaboration and pragmatism, with a strong referee to ensure fair play.
Colin Borland is director of devolved nations at the Federation of Small Businesses
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