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Lisa Claire Whitten

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Viviane Gravey

Leadership Team Member

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Billy Melo Araujo

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A new Government in Westminster, a new party in power, and 335 first-time MPs of the 650 newly elected, all raise questions for the future of UK trade policy. This post discusses what these changes in the centre mean from the perspective(s) of the periphery of the three devolved administrations of Scotland, Wales and Northern Ireland.

With this General Election, the representation of devolved territories in Westminster has profoundly changed. After decades of incongruence between the parties in power in the devolved capitals and in London, we are seeing renewed, but far from complete, congruence with a strengthened Labour Party in three of the four parts of the UK. This shift presents challenges as well as opportunities for the operation of the fragile intergovernmental relations frameworks that underpin the functioning of the UK internal market (the internal trade dimension), and the development of post-Brexit trade policy.

In 2022, the UK set about reforming the framework for intergovernmental relations. Among the outcomes of the review process was the establishment of several groups through which central and devolved government representatives can discuss relevant policy areas on a regular basis. In relation to internal trade, a significant Interministerial Group is the Environment, Food and Rural Affairs (EFRA), as agriculture, food standards and environment are devolved competences. It is in that forum that intense intergovernmental disagreements on the Deposit Return Scheme and Glue Traps played out, and rare agreements on Single Use Plastics and Plastic Containing Wet Wipes were struck. Likely indicating a lack of recent consensus between the four governments of the UK on relevant policies, the EFRA Group has published no communiqués since September 2023 despite continuing to meet.

Under the Conservatives, intergovernmental relations had been fraught, marked by a repeated sidelining of the Sewel Convention (that Westminster would not ‘normally’ legislate in an area of devolved competence) and a maximalist application of the United Kingdom Internal Market Act 2020 principles which constrained the capacity for internal policy divergence. This begs the question as to the new Labour UK Government’s approach to intergovernmental relations. Although details are yet to emerge, Prime Minister (PM) Starmer’s announcement that a new “council for regions and nations” is coming suggests (yet another) reset of intergovernmental relations is on the cards.

Under the intergovernmental relations system, Scotland, Wales and Northern Ireland are generally represented by Ministers (and their officials) elected at devolved level. After the General Election, the parties operating for a devolved territory in intergovernmental relations committees/groups will often be different to those elected for the same territory in the House of Commons.

Fraught relations under the Conservatives were also due to very different policy objectives – but the Labour Party manifesto was almost silent on the UK internal market and on ‘assimilated’ or retained European Union (EU) law – two points of major tension between devolved and central government in recent years. The approach PM Starmer’s government opts to take on both issues will be significant for relations between the four UK governments going forward. The Scottish Government has an explicit policy to remain aligned with the evolution of EU laws (‘where appropriate’ and within competence) and the Welsh Government adopted a similar sentiment in its approach to regulation. If the new UK Government continues on the path to change or remove half of the laws that are a legacy of EU membership (‘assimilated law’) by June 2026 (as was the policy under the Conservatives) this can be expected to be a source of ire for devolved ministers.

The UK Government will finally have to take into consideration the unique circumstances Northern Ireland finds itself in. Since it remains subject to EU rules on goods, any decision to diverge from EU rules and standards will make trade between Great Britain (GB) and Northern Ireland (NI) more burdensome. Equally, any move to lower GB regulatory standards (relative to those applicable in NI) would place NI producers and firms at a competitive disadvantage in the UK internal market.

From an external trade perspective, a similar picture emerges. While policy objectives may be less far apart than when the Conservatives were in power, how policy is made and whose voices are heard still matters, and improvements are sorely needed.

The Labour Party Manifesto outlined an intention to ensure that devolved interests are considered and reflected in trade policymaking. The Manifesto included commitments to ensure that, in relation to trade, “UK-wide bodies are more representative of our nations and “UK trade negotiators will work with devolved governments”. The Manifesto also mentioned the need to harness the UK’s diplomatic and trade networks and work with devolved governments to champion their interests abroad.

The record of intergovernmental engagement in the area of trade is mixed. Whilst generally happy with the regularity of meetings in the context of the Interministerial Group for Trade, devolved authorities have raised significant concerns regarding transparency.  For example, when it comes to market access in the agricultural sector, devolved authorities in Scotland and Wales have said that they had no sight of relevant texts until after the negotiation was finalised, that they were not given an explanation as to the rationale for the UK’s negotiating position in this area, and that engagement was extremely limited.

These concerns take on added importance given that Labour has identified the negotiation of an EU-UK veterinary agreement and the promotion of the “highest standards when it comes to food production” as central aims of its trade policy. Not only are food standards devolved, but in NI they are governed by the Windsor Framework. For example, to the extent that a veterinary agreement with the EU would go some way in terms of reducing the checks and controls on agri-food goods moved from GB into NI, it makes sense for Northern Ireland authorities to play a significant role in informing the UK Government’s negotiating position.

The new political geography of the UK brings with it new obligations and new opportunities when it comes to trade and devolution. Under PM Starmer, the nascent Labour Government has a chance to improve relations between the four governments of the UK, and the operation of internal trade, by ensuring intergovernmental relations systems are fit for purpose and decisions regarding regulatory divergence are well-managed. At the same time, there are opportunities to develop the UK’s external trade policy – including with the EU – in a way that is more inclusive, and which recognises the priorities and circumstances that apply in each constituent territory of the state.

While achieving all of this is newly possible under the Starmer administration, doing so will not necessarily be easy. Starmer promised a government that would ‘tread lightly’ on the lives of voters. But can a newly emboldened Westminster government learn (again) to tread lightly on devolved authorities.