Regulation in Scotland and Wales after Brexit

ABSTRACT While the United Kingdom was a member of the EU, a number of regulatory competences were shared between the EU and devolved authorities in Scotland, Wales and Northern Ireland. As Northern Ireland is governed by the Protocol, which requires dynamic alignment with most EU regulations, it is a case apart and this article deals only with Scotland and Wales. Where repatriated competences should go after Brexit has been a matter of political contention. Attempts to centralise at the UK level have been rebuffed so far but tensions remain. Common Frameworks are designed to deal with shared competencies but are inconsistent and work best with technical matters. UK measures regarding the application of international trade agreements, the EU Internal Market Act, legislation on subsidy control and professional qualifications undermine the regulatory autonomy of Scotland and Wales. The real test will come if the UK diverges radically from EU regulations while the devolved governments resist.


Introduction
While the United Kingdom was a member of the EU, a number of regulatory competences were shared between the EU and devolved authorities in Scotland, Wales and Northern Ireland. As Northern Ireland is governed by the Protocol, which requires dynamic alignment with most EU regulations, it is a case apart and this article deals only with Scotland and Wales. Where repatriated competences should go after Brexit has been a matter of political contention. Attempts to centralise at the UK level have been rebuffed so far but tensions remain. Common Frameworks are designed to deal with shared competences but are inconsistent and work best with technical matters. UK measures regarding the application of international trade agreements, the EU Internal Market Act, legislation on subsidy control and professional qualifications undermine the regulatory autonomy of Scotland and Wales. The real test will come if the UK diverges radically from EU regulations while the devolved governments resist.

Devolution and regulation
The devolution settlement under the 1998 Scotland and Wales Acts created a fairly clear division of competences between the UK and devolved governments. Foreign affairs and

Regulation after Brexit
There has been broad agreement that some degree of regulatory harmonisation may be needed following the removal of EU regulatory frameworks but much less agreement on how extensive it should be or what form it should take. One factor is the ability of the UK to sign trade deals with the EU and third countries, which could expect access to the whole UK market (or Great Britain at least if Northern Ireland is treated differently). The UK Government has no powers to force devolved legislatures to transpose international agreements, although it can oblige devolved ministers to introduce the necessary draft legislation and can ask the Westminster Parliament to legislate directly if the devolved bodies do not pass it. Another argument is the need to protect the UK internal market and avoid trade distortions and unfair competition. This, however, is a matter of political judgement rather than of objective assessment. The only reference to a UK internal market in the devolution legislation is in the Northern Ireland Act; otherwise the concept is largely unknown outside the EU context. What for some governments may be a protection of the environment, social standards or working conditions may to others be a distortion of trade. Given that at least one part of the pro-Brexit coalition favoured a radical measure of deregulation, this could cause difficulties in Scotland and Wales. In Scotland, there is the added complication that voters had voted Remain by a large majority (62 per cent).
Both the Scottish Government (controlled by the Scottish National Party) and the Welsh Government (controlled by the Labour Party) were concerned about the UK Government imposing its own regulatory provisions in the name of safeguarding the UK internal market and they cooperated extensively with each other. Their approaches did, however, differ somewhat. Wales is linked to England more closely than is Scotland, with most of the population living near the border and with less of a tradition of regulatory differentiation. The Welsh Labour Government has sought a form of cooperative federalism in which there might be extensive common UK policies but with a strong input from the devolved bodies. The Scottish Government puts more emphasis on the autonomy to do things differently. This is partly to do with politics (it being a nationalist government) but also owes something to the longer Scottish tradition of regulatory differentiation (which predates devolution). Both governments brought in 'Continuity Bills' allowing them to maintain dynamic alignment with EU regulations but the Welsh one was withdrawn on the assurance that there would be cooperation (as detailed below). The Scottish Bill, after being struck down by the Supreme Court on technical grounds, was reintroduced so that the Withdrawal from the European Union (Continuity) (Scotland) Act gives ministers powers to retain dynamic alignment with EU regulations (Scottish Government, 2022).
The years since 2016 have seen a prolonged tussle between the UK and devolved governments of Scotland and Wales over control of regulatory matters coming back from the EU. These have posed constitutional questions about the nature and interpretation of the devolution settlement. They have also provided scope for argument about the extent and form of regulation between UK Governments located on the right and with varying commitments to deregulation, and Scottish and Welsh governments and parliaments rooted in social democratic assumptions.

Legislative measures
The arguments began at an early stage with the first draft of the EU Withdrawal Bill. This proposed to take all EU competences back to Westminster, with powers then 'released' back to the devolved bodies where appropriate. The argument was that, because these were EU competences at the time of devolution, they were never devolved. However, the devolved governments insisted that, because they were not reserved in legislation, they must be devolved. Without specific changes in the devolution statutes, the powers by default revert to the devolved level. After widespread criticism (including from Scottish and Welsh Conservatives), the UK Government then retreated and amended the Bill. The default was that competences would remain with the devolved governments but could, by statutory instrument, be taken back to Westminster on a time-limited basis where it was deemed necessary (Keating, 2021b). Unlike most statutory instruments, these would be subject to a consent procedure by the devolved parliaments analogous to the Sewel Convention for legislation. The Sewel Convention, even when incorporated into legislation, never spelt out what the consequences of refusal of consent would be, relying instead on the general power to legislate in devolved matters. For these new statutory instruments, it was stipulated that, if the devolved institutions agreed, the orders would go into effect; if they disagreed, they would go into effect; and if they said nothing, they would go into effect. Agreement was then reached with the devolved governments that Common Frameworks (see below) should be negotiated to handle reserved EU law in devolved fields, with legislation as a last resort (UK Government, 2017). A political agreement was reached that, pending Common Frameworks, existing regulations would be frozen. The Scottish Government made clear that, were the power to take back competences to be used, then cooperation on Common Frameworks would be impossible. Ultimately, the power was never used and has since been repealed.
There has been a variety of experiences in making legislative provision for regulation post-Brexit. Scotland opted for its own Environment and Agriculture Acts. There were some arguments over the scope of the post-Brexit Environment and Agriculture Acts at Westminster on the grounds that these still trespassed on devolved competences, but these were resolved, which allowed the Scottish Parliament to give its legislative consent to both of them. There did remain an element of recentralisation in that it is the relevant UK Secretary of State who decides on ceilings for agricultural support to qualify under WTO rules. There was less argument over the Fisheries Act (2020), which gives powers to Scottish ministers. Fisheries is in any case mostly a Scottish matter, though the negotiations on fishing quotas take place at UK level. Before Brexit, the Scottish government was represented in the UK delegation to the EU where these matters were decided.
The Welsh Government has tended, rather, to accept UK or GB-wide regulatory provisions, on condition that it has a role in setting them. Rather than adopting its own legislation, Wales had its own schedules inserted into the Agriculture Act 2020 allowing for detailed variations. Relations between the Welsh and UK Governments, however, deteriorated after the Johnson government introduced the UK Internal Market Act (discussed below).
Professional qualifications have proved more difficult. The devolution settlement retained the historic provision whereby some professions, such as the law and teaching, were regulated separately for Scotland, while others, including medicine, were regulated at UK level, except for those created after devolution. The Professional Qualifications Act (2022), however, gives the UK Secretary of State powers over mutual recognition of qualifications with other countries, irrespective of whether those professions are devolved or not. The devolved governments only need to be 'consulted'. The Scottish Parliament refused to give its legislative consent to the Bill, but Westminster proceeded anyway.

Common frameworks
The main focus is now on negotiated Common Frameworks, under principles agreed at the Joint Ministerial Committee (EU Negotiations) JMC in October 2017 between the UK government and Scottish and Welsh Governments. The basic principles were: Common Frameworks will be established where they are necessary in order to: . enable the functioning of the UK internal market, while acknowledging policy divergence; . ensure compliance with international obligations; . ensure the UK can negotiate, enter into and implement new trade agreements and international treaties; . enable the management of common resources; . administer and provide access to justice in cases with a cross-border element; . safeguard the security of the UK.
Common Frameworks will respect the devolution settlements and the democratic accountability of the devolved legislatures, and will therefore: . be based on established conventions and practices, including that the competence of the devolved institutions will not normally be adjusted without their consent; . maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory, as is afforded by current EU rules; . lead to a significant increase in decision-making powers for the devolved administrations.
A framework will set out a common UK, or GB, approach and how it will be operated and governed. This may consist of common goals, minimum or maximum standards, harmonisation, limits on action, or mutual recognition, depending on the policy area and the objectives being pursued. Frameworks may be implemented by legislation, by executive action, by memorandums of understanding, or by other means depending on the context in which the framework is intended to operate. (UK Government, 2017) There followed a mapping exercise to determine where Frameworks might be needed. Competences are now divided into three categories: where no Framework is required: Frameworks with no associated primary legislation; Frameworks with associated primary legislation. An initial list of competences was identified and joint working groups established. By December 2021, 152 areas of intersection between former EU and devolved competences had been identified.
Frameworks would not be required in 120 of the 152, either because there is a minimal risk of divergence, existing intergovernmental arrangements are sufficient, or divergence would have minimal impact. The remainder were divided into areas where a legislative framework might be required and where it would not. Later, this was reframed as needing primary legislation or not. By September 2022, one Framework had been finalised, twenty had been provisionally agreed and five were outstanding. As the idea was that nothing was agreed until everything was agreed, many of these were put into effect provisionally. No Frameworks have been imposed unilaterally by Westminster.
Frameworks were intended as a practical measure to deal with a specific problem. None of them has taken legislative form, none has been imposed on the devolved governments, and they are to be implemented through cooperation, making reference to the existing practice of concordats and memorandums of understanding and to the system of interministerial committees, itself recently reformed. This is, nonetheless, an innovation in the devolution settlement, which previously lacked frameworks as found in other federal or devolved systems. Yet they are couched in technical language, written by practitioners for practitioners, depoliticising the issues and taking them into 'comitology' structures in a way that is ironically familiar from EU policy making. 1 Each Framework identifies the relevant EU competences. It provides for notification if any government proposes changes in the retained EU law with implications for the others. There is a process for analysis of impact and for discussion and then agreement. In the case of disputes, the issue can be escalated to higher official levels and ultimately to ministers. At that point, the resolution will be decided politically.
Apart from that, the Framework documents differ in their format. Indeed, there is not even a consistent definition of what a Framework is. Some use the formulation from the 2017 agreement while others choose slightly different words.
In principle, frameworks can serve two purposes: to make policy cooperatively between the UK and devolved governments; or to allow for divergence. The former would correspond to the Welsh idea of joint policy making, while the latter would meet the Scottish preference for autonomy. In practice, most have been about allowing for divergence, focusing on process rather than substance (House of Lords Common Frameworks Scrutiny Committee, 2022). In some areas, however, there is evidence of jointpolicy making, even going beyond retained EU law. There is some vagueness over the criteria used to decide whether divergence would be problematic and the terminology used to specify it. It is not possible, at this stage, to assess whether Frameworks provide the same degree of flexibility as was available in the implementation of EU regulations or whether they have increased the decision-making powers of the devolved institutions as promised. Discretion in regulation of former EU matters has, however, been curtailed by other transversal measures.

Transversal measures
Two broad, transversal measures cut across the division of regulatory competences. The first was the UK Internal Market Act (2021). (https://www.legislation.gov.uk/ukpga/2020/27/ contents/enacted) This arose from a fear that, with the loss of the EU Internal Market, undesirable regulatory differences might arise among the parts of the United Kingdom. This is, of course, a politically charged matter. As the experience of the EU Internal Market has shown, there is great scope to differ as to how far market competition should be restricted in the name of social, environmental and other policy considerations. The 'UK Internal Market' is itself is a novel concept (Barnard, 2020;McEwen, 2020), referred to only in the Northern Ireland Act. Otherwise, it was implicitly secured only as part of the EU Internal Market.
There was an initial attempt to negotiate this. There were discussions with the Welsh Government and interested academics, but these were suspended early in 2021. The Scottish Government had already declined to participate, insisting that voluntary Frameworks was as far as it could go. In August 2020 a White Paper (UK Government, 2020) was issued, followed rapidly by the UK Internal Market Bill. This sought to reproduce the EU Internal Market by providing for non-discrimination and mutual recognition among the four jurisdictions of the United Kingdom, with provisions to conform to the Protocol on Ireland and Northern Ireland. There are, however, two key differences from the EU model.
First, there is no provision for subsidiarity and proportionality; and the rules are set unilaterally by the UK Government, with no equivalent to the European Commission or the Council of the EU at the UK level. An Office of the Internal Market (OIM) within the Competition and Markets Authority (CMA) is responsible for research and advice as to what the internal market entails. It can be called on by any of the involved governments. It must include people from the devolved territories but these are appointed by the UK rather than the devolved governments. Moreover, it lacks the enforcement powers available to the CMA in other areas. Instead, any party (such as a business) that feels disadvantaged by a regulatory provision can take the matter to the courts. This leaves enforcement and development of the UK Internal Market to litigation and case law in another ironic imitation of EU practice. Hitherto, UK governments at all levels have preferred to keep the courts out of the arbitration of intergovernmental differences. The Court of Justice of the European Union has long experience in these matters, some of it attracting political criticism where is thought to have stressed competition excessively. The UK courts largely lack this experience and it is difficult to say how they will deal with these new responsibilities or, indeed, how much litigation there will be. The Scottish Government's legislation on minimum pricing for alcohol was tied up in the British and European courts for several years following a case launched by the drinks industry.
Second, exceptions to the provisions are more narrowly conceived than in the corresponding EU regime, applying to a tightly-defined set of issues including health. Existing regulatory differences are protected but it is not clear whether this will apply to changes in existing provisions, for example increases in the minimum price for alcohol in Scotland. The corresponding EU provision, by contrast, includes a wide-ranging set of public policy considerations. Both the Scottish and Welsh Parliaments refused legislative consent, but Westminster proceeded anyway.
The UK Internal Market Act is exceptional in another way, in that the provisions apply equally to Scotland and Wales and to England, which comes directly under the UK Government. In practice, with England accounting for some 85 per cent of the UK market, manufacturers are likely to conform to English standards so that these could become de facto the UK norm. So, while it is true that the Act does not take competences away from the devolved governments, it does undermine their exercise.
Following an amendment in the House of Lords, the UK Internal Market Bill was amended so that matters coming within an agreed Framework could be excluded from its provisions by statutory instrument, subject to the consent of the devolved legislatures. In this case, consent is unlikely to be problematic as it would the devolved bodies themselves that ask for the exclusion. By September 2022, the only agreed exclusion was for Scottish legislation on single-use plastics. While this was a rather uncontroversial matter and it is likely that the other UK territories will adopt similar regulations, its negotiation was quite prolonged and the Scottish Government was not satisfied with the narrow scope of the exception.
The second transversal matter concerns the control of subsidies ('state aids' in European language). There was a disagreement among the government about whether this was already reserved but this was resolved by the UK Parliament explicitly reserving it. The Subsidy Control Act (2022) reinforces this by making the UK authorities the ultimate authority on permissible subsidies. Responsibility for scrutinising subsidies lies with the Competition and Markets Authority but can only provide guidance. Enforcement will, as with the UK Internal Market Act, be a matter for the courts (Stephan, 2022).

Whither regulatory divergence?
The story of regulatory control since Brexit has been one of attempts by the UK Government to centralise, curbed by resistance at the periphery and modifications to the original proposals. Brexit has been the occasion for multiple over-rides of the Sewel Convention, notably in the enactment of the European Union (Withdrawal Agreement) Act 2020, with all three devolved legislatures having refused consent. It also gave the Supreme Court, in the first Miller case, the occasion to declare that the Convention was merely 'political' and not at all binding. New consent provisions have been inserted in relation to statutory instruments in some of the legislation but they have become progressively weaker. The (now repealed) provision in the European Union (Notification of Withdrawal) Act 2017 on taking back powers stipulated that if the devolved legislature consents, the instrument is valid; if it refuses consent, it is valid; and if it takes no decision, it is valid. In the UK Internal Market Bill (section 10.11), this is replaced by: 'If consent to the making of the regulations is not given by any of those authorities within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent' https://www.legislation.gov.uk/ukpga/2020/ 27/section/10/enacted By the time the UK government introduced the Professional Qualifications Bill in May 2021, consent had been replaced by 'consultation'.
The UK Government has persistently argued for the need for unification or harmonisation of the UK's regulatory regimes in order to comply with international trade agreements, which are a reserved matter. Scottish and Welsh ministers are obliged to give effect to the UK's international obligations and UK ministers can instruct them to present any implementing legislation to their legislature. Although their legislatures are not obliged to comply (unlike with EU law before Brexit) there is in practice very little scope to defy them, given the other powers available to UK ministers.
The scope of regulatory divergence in practice will depend on (a) how far the EU introduces new regulations, diverging from the status quo ante Brexit; (b) how far the UK chooses to diverge from the EU; (c) how far Scotland and Wales seek to diverge from the UK. The argument about deregulation continues to divide the Conservative Party and it is too soon to tell how this will be resolved. There could also be a price for deregulation if it involves regression from existing protections and thus allows the EU to suspend parts of the Trade and Cooperation Agreement.
The Retained EU Law (Revocation and Reform) Bill provides that all retained EU law, whether in reserved or devolved fields, will expire at the end of 2023. There is a promise that any effects on Common Frameworks will be managed within the relevant Framework mechanisms. UK, but not devolved ministers, can extend the sunset clause. UK ministers are given powers to make statutory instruments in devolved fields, without a requirement for consent. If that provides a massive challenge for Westminster, it is even more so for the devolved administrations with their limited capacity. The challenge for them will be whether to keep the EU regulations, whether to follow the new UK (England) regulations, or to write their own distinct one. The Scottish Government recommended that the Scottish Parliament not give legislative consent on the grounds that: Firstly, the Bill's deregulatory agenda poses risks to important protections and high standards. Secondly, it significantly undermines devolution. And thirdly, the Scottish Government believes that the sunsetting approach brings significant risk to the coherence of the statute book, and that the proposed 2023 date for sunsetting is impractical and unachievable, imposing unrealistic burdens on both government and Parliamentary resources to complete the necessary work to preserve REUL in the available time. (Scottish Government, 2023) The Scottish Government is committed to maintaining dynamic alignment with EU regulations but this commitment is rather ambivalent. There is an ambition that dynamic alignment will be the default option to ensure that a future independent Scotland is as close as possible to the acquis commuautaire so as to facilitate EU membership https:// www.parliament.scot/-/media/ede6ec7e12574a7c8e34927b03ccf1b0.pdf. Yet this is qualified by consideration of whether any given EU regulation is appropriate. The first report on the use of this power states that it was not used, The second, in October 2022, states that it was considered on only two occasions https://www.parliament. scot/-/media/files/committees/constitution-europe-external-affairs-and-culture-committee/ correspondence/2022/eu-alignment-5-may-2022.pdf On one issue the Scottish Government decided not to align, using very similar reasoning to the UK Government's decision on that issue (electric charging points at car parks in residential buildings). On the second issue, it declared that it is still considering whether to align. Scottish ministers may use other powers, including primary legislation, to align but there is so far no evidence of that. This does not seem to presage a broad strategy of alignment but rather a consideration of the merits of EU regulations in each case. There is not, as yet, a comprehensive system for monitoring EU regulations in order to decide whether to align but this is under consideration.

Conclusion
To date, regulatory harmonisation and divergence have been accommodated by a strategy of depoliticisation and technical cooperation. The test will come if and when there is substantial pressure for divergence. So far, there has been broad agreement on the general directions of policy on environment and climate change. In agriculture, there is a long tradition of Scottish management within broad UK lines, predating devolution and the policy communities are interlinked. After devolution, the Scottish and Welsh Governments made use of the discretion allowed to Member State Governments to modify the Common Agricultural Policy, with some significant differences of emphasis if not of principle. Recent developments indicate more of the same, within the Common Frameworks. Fisheries policy has, to a significant extent, been led from Scotland. The EU Retained Law (Revocation and Reform) Bill is likely to come into collision with the Scottish Government strategy of dynamic alignment with EU law. If a Labour Government is returned at the UK level after the next General Election, it is likely to move closer to EU regulatory rules; there have been suggestions to adopt common sanitary and phytosanitary rules on agriculture. In that case, the divergence between the UK and devolved levels might be reduced to more manageable levels.
While the initial ambition of the UK Government to take back regulatory powers was rebuffed due to political pressures, the process has been characterised by a creeping recentralisation. The Sewel Convention only held as long as it was not challenged but Brexit has put more weight on it than it can bear. It was initially breached in the EU Withdrawal Bill, with the express approval of the Supreme Court. While this might have been explained on the ground that this was necessary in order to start the process mandated by the referendum result (and so not 'normal'), it was subsequently breached on a series of Brexit-related bills, to the point that it has become normalised and effectively meaningless. Brexit has entailed expanded use of statutory instruments and 'Henry VIII powers' (altering primary legislation by statutory instruments). There has been a steady expansion of the rights of UK ministers to make statutory instruments in devolved areas, something almost unknown before except for agreed implementation of EU legislation. This has happened through primary legislation (such as the EU Withdrawal and Withdrawal Agreement Acts) and also through the EU Exit Statutory Instruments (the 'deficiencies' instruments) which confer powers variously on UK ministers, devolved ministers or both. Powers for UK Ministers are being conferred in subject areas that were not formerly governed by the EU (Scottish Parliament Constitution, Europe, External Affairs and Culture Committee, 2022).
So a transfer of power from Parliament to the executive and from the devolved administrations to the centre have gone together as part of the post-Brexit regulatory regime. Scottish ministers, it should be said, have also acquired Henry VIII powers, either via UK legislation or in the Continuity Act. It is another ironic effect of Brexit that parliamentary scrutiny and devolution have been undermined, contrary to the slogan of 'Take Back Control'.
While the UK was in the EU, there were arrangements for the devolved governments to contribute to the UK line in negotiations via the Joint Ministerial Committee (Europe). Devolved ministers were sometimes invited to join the UK delegation to the Council of the EU. The devolved governments regularly complained about the inadequacy of these arrangements but they did acknowledge the role of devolved governments and the fact that key European competences were managed by them. For the Brexit negotiations, there was a Joint Ministerial Committee (European Negotiations) with a weaker role. It was merely consultative, the devolved governments complained that they rarely had time to make an input before negotiations, and they were not represented in negotiation teams. There is a similarly weak role for the devolved governments in the Trade and Cooperation Agreement Partnership Council. The devolved governments are not represented on the Council although officials do participate in some of the specialised committees. In the negotiation of trade and other international agreements, the devolved governments can be consulted but have no formal role.
Membership of the European Union underpinned the devolution settlement in important ways that were ignored or underplayed in the Brexit campaign. Central to the case for Brexit was the need to restore sovereignty to the United Kingdom, conceived of a unitary nation state and people. The 'British people', we were told, had voted to leave the EU. From the perspective of the smaller nations, however, the United Kingdom is not a unitary nation-state but a plurinational union lacking foundational agreement on demos (the people), telos (the purpose of the state and its historical trajectory), ethos (shared values) and sovereignty (Keating, 2021a). Seen this way, it closely resembles the European Union, which is also such a polity. Far from an incompatibility, there was a good fit between the two. The foundational questions were never resolved but managed through ambiguity, abeyances and pragmatic compromises. EU membership dispensed with the need for politically contentious provisions for a single market or regulatory harmonisation. The prevailing pro-European sentiment in successive Scottish and Welsh governments made this more acceptable than UK provisions would have been. This complex, multi-level polity is now challenged by a renewed unionism that, in the words of the UK Internal Market White Paper (Department of Business, Energy and Industrial Strategy, 2020) 1s a 'unitary state'. Calls for a differentiated Brexit for Scotland Scottish Government (2016) have been rebuffed. The Levelling Up fund, which replaces the Structural Funds (for which the Scottish and Welsh Governments were managing authorities) is run from Whitehall and UK ministers have new powers to act and spend in devolved matters. There will be no wholesale takeover of devolved fields by UK departments, which lack the knowledge, capacity or will to administer Scotland and Wales directly, but a strong element of hierarchy has been introduced into the system. Note 1. Comitology is the dense system of committees including EU institutions, Member States and other actors by which EU policy is made.

Disclosure statement
No potential conflict of interest was reported by the author(s).

Funding
This work was supported by Directorate-General XII, Science, Research, and Development: [grant number 822304].