The news that the Welsh Government’s legal challenge to the Internal Market Act was refused by the High Court last month may have passed under the radar of many.

The development was not widely covered in the mainstream media, and was greeted with fairly little online discussion by the general 'commentariat'.

Nevertheless, the court’s decision, which is now being appealed by the Senedd, may well have significant implications for Wales and Welsh producers.

The Internal Market Act was brought into force in December 2020, with the purpose of ensuring the frictionless functioning of the internal market between the four countries of the UK after the end of the Brexit transition period.

Ostensibly, the economic and political rationale for the act is sound; to ensure goods and services can move freely across the UK; to protect producers operating across the four territories from any discrimination or additional costs caused by regulatory divergence; and to safeguard the principle and function of the union.

However, a deeper look at the detail may raise some concerns. Central to the Internal Market Act is a market access principle of ‘mutual recognition’.

This principle means that goods produced in one part of the UK, and which are compliant with the rules in that jurisdiction, are automatically granted access to other UK markets, without needing to meet any additional standards imposed in other UK nations.

Under these rules, the Welsh Government will not, for example, be able to prevent a food product made in England from being sold in Wales, even if the product in question does not meet the standards required domestically.

This provision would perhaps be moderated by the presence of some kind of commitment to ‘non-regression’– which would prevent any of the four governments from lowering their standards relative to the other devolved nations.

Many fear, however, that the absence of any such measure leaves the door for UK governments to lower existing protections and standards on the environment or food quality. Thanks to the mutual recognition principle, goods produced under these lower standards could then make their way into other UK markets.

The implications for Wales are potentially significant, particularly given that the Welsh domestic regulatory framework is in many ways much more progressive and ambitious than that of the Westminster government.

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While the act does not prevent the Senedd from retaining its commitment to keeping domestic standards high, in practice it risks undermining the effectiveness of ambitious public protections.

It also has the potential to have a ‘chilling’ effect on ambitions to drive further progress via the introduction of new legislation in Wales.

The act could see Welsh producers undercut by the availability of cheaper goods produced to lower standards, putting them at a potential competitive disadvantage if they do not follow suit, potentially triggering a race-to-the-bottom on standards.

Concerns about the constitutional implications of the Internal Market Act have been repeatedly voiced by the Welsh and Scottish Governments, with both refusing to give consent to the bill last year on the grounds that it amounted to a ‘power grab’ by Westminster, and would severely curtail their ability to pass their own laws on environmental or food standards.

And what of Welsh voters? Unchecked UK’s recent survey, carried out by YouGov, suggest that many would support the Welsh Government in its efforts to push back against the act.

This poll found, for example, that most Welsh citizens think food should only be able to be sold in Wales if it meets Welsh food standards, even if it has been approved in England, Scotland or Northern Ireland (although positions varied significantly across voters of different political persuasions).

More generally, our research found that Welsh voters across political spectrum want to see standards and regulations across public life maintained or strengthened, with particular support for rules which protect Welsh food and the Welsh environment.

While the future of the Internal Market Act, and its implications for Wales, are yet to become apparent, it's clear that any perceived weakening of these public protections – whether through the act or any other legislative mechanism – will not land well with the people of Wales.

Emma Rose is director of Unchecked UK