Ten years on from the Brexit referendum, this blog post analyses where relations stand between the UK and devolved governments on regulating the UK’s domestic market. Specifically, using Wales as a case study, it focuses on the legal and political controversy surrounding the UK Internal Market Act 2020 (UKIMA).
Brexit and devolution
The events of the Brexit process exposed significant fault lines in the UK’s territorial constitution. Within the referendum result, the mandate differed across the four parts of the United Kingdom – Wales and England voted to leave, whereas Scotland and Northern Ireland voted to remain – leading to different interpretations of what constituted a “British-Exit” from the EU. The presence of devolved governments and legislatures also gave the territorial incongruity of the referendum result a political voice which, at times, ran contrary to the decisions of the UK government.
In Scotland, the SNP government’s white paper, Scotland’s Place in Europe, argued strongly that the UK should remain within the Single Market and Customs Union. Failing this, the white paper argued that provision should be made to allow for Scotland to remain, either through a “differentiated deal” or, failing that, a second referendum on independence. In contrast, the UK government moved to interpret and apply the result on the basis of a unified British exit and refused requests for territorial differentiation. While this position would later change regarding the treatment of Northern Ireland, the UK government’s decision on a unified approach remained consistent in Great Britain.
In Wales, the Welsh Labour government, which had campaigned to remain within the EU, was required to reconcile its position with the decision of the Welsh electorate, who voted by a narrow but significant majority to leave (Leave: 52.5%, Remain: 47.5%). In January 2017, the Welsh government, in collaboration with Plaid Cymru, published its white paper on Brexit negotiations, Securing Wales’ Future, which argued that the decision to leave the EU did not include withdrawal from the Single Market and Customs Union. Central to this position was the desire to maintain unfettered access to the Single Market, which accounted for two thirds of identifiable Welsh exports. However, unlike in Scotland, the Welsh government’s position throughout the Brexit negotiations remained focused on UK-wide solutions to market access – either through UK membership of EFTA or a bespoke arrangement unique to the UK – and did not advocate for a differentiated deal for Wales.
Over the coming months and years, the question of the UK’s future trading relationship with the EU would form a central tenet of the Brexit negotiations. Within this fell the issue of how to regulate the UK’s domestic market in the event of withdrawal from the Single Market and Customs Union. How the negotiation and regulation of this issue would proceed would come to have a defining impact on the territorial constitution and the relationship between the UK and devolved governments.
Regulating the UK’s domestic market
Prior to Brexit, the UK’s domestic market was integrated into the EU internal market. This required the UK and devolved legislatures to comply with EU law in areas affecting intra-EU trade. The presence of this supranational framework meant that there was limited scope for regulatory divergence between the four parts of the UK. Therefore, the UK government’s decision to leave the EU internal market raised a regulatory dilemma – the removal of the EU’s supranational framework could allow for regulatory divergence to emerge between the four parts of the UK’s domestic market.
The UK government, then led by Theresa May, initially sought to respond to this dilemma by working with the devolved governments to establish “Common Frameworks” in areas of devolved competence previously regulated by EU law. This effort, designed to minimise regulatory divergence within the UK’s domestic market, would rely on a cooperative approach between the UK and devolved governments. The UK government also set out how the process for developing Common Framework would deliver “a significant increase in the decision-making power of each of the devolved administrations”. As other events at this time were highlighting the legal vulnerability of the devolution settlement – foremost of which being the UK Supreme Court’s decision on the Sewel Convention in Miller [2019] UKSC 41 – the promise of a cooperative approach for establishing Common Frameworks was welcomed by the devolved governments.
However, as the Brexit process developed, the UK government, now led by Boris Johnson, changed its approach when it introduced a new regulatory mechanism under the UK Internal Market Act. While responding to the same concerns on possible regulatory divergence within the UK’s internal market, the UKIMA introduced a top-down approach for managing the UK’s internal market. Unlike the Common Frameworks, the UKIMA does not provide a mechanism for cooperation with the devolved governments and places much of the regulatory power in the hands of UK ministers. This revised approach to regulating the UK’s internal market, coinciding with other examples of so-called “muscular-unionism” from the Johnson administration, led to a robust response from the devolved governments and legislatures in Wales and Scotland.
The UKIMA and devolution
Both the Senedd and the Scottish Parliament withheld legislative consent on the UK Internal Market Bill. In September 2025, the Welsh government’s legislative consent memorandum to the Senedd set out its concerns regarding the Bill’s potential to undermine parts of the devolution settlement:
the proposals in the Bill go far beyond the structure that may be needed to ensure economic and regulatory cooperation between the nations of the UK and, if enacted, would undermine the long-established powers of the Senedd and Welsh Ministers to regulate in relation to matters within devolved competence.
Although some amendments were subsequently made to the Bill at Westminster, the Welsh government’s second legislative consent memorandum in December continued to recommend that consent be withheld due to the potential risks to the devolution settlement through the Bill being designated a protected enactment. Regardless of these concerns, Westminster proceeded to pass the Bill, with the UKIMA entering into force on 31 December 2020. Since its enactment, the devolved governments have continued to voice their concerns on the operation of the UKIMA and its effects upon the devolution settlement.
In January 2021, the Welsh government escalated matters when it announced that it would seek permission for a judicial review to challenge the UKIMA. The Counsel General requested an advisory declaration that the UKIMA did not modify the Senedd’s legislative competence under the Government of Wales Act 2006 (GOWA). Specifically, this request came in two parts: (1) that the UKIMA’s classification as a protected enactment would not impliedly repeal parts of the GOWA; (2) that UK ministers’ powers under the UKIMA to exercise delegated powers to amend primary legislation would be limited to incidental and consequential amendments, subject to the principle of legality. The High Court and, later, the Court of Appeal, refused the petition on both grounds, owing to the prematurity of the application in the absence of specific legislative proposals having been introduced in the Senedd.
As I have written previously, the Welsh government’s decision to challenge the UKIMA before the courts exhibited two competing dynamics that had emerged over the course of the Brexit process. First, the request for an advisory declaration was an acknowledgement of the legal vulnerability of the devolution settlement and the Welsh government’s concerns about the effect of the UKIMA on the Senedd’s legislative competence. Second, the decision to begin legal proceedings against the UK government also amounted to a significant escalation in the Welsh government’s approach to constitutional disputes. Prior to this action, the Welsh government had approached Brexit by seeking compromise and concessions from Westminster, as opposed to directly challenge its position through legal proceedings.
Devolution and the UKIMA today
Following the UK general election in July 2024, the return of a new Labour government at Westminster was promised as an opportunity to reset relations with both the EU and the devolved governments. Regarding the latter, the intervening years have provided some notable developments, including improvements to both the apparatus and dynamics of intergovernmental relations, a decline in the number of Sewel convention disputes, and a manifesto commitment to strengthen the Sewel Convention through a new memorandum of understanding. In December 2024, the UK government also announced that it intended to review the operation of the UKIMA – a development that was unexpected, though nevertheless welcomed, by the devolved governments.
Taking place a year before the UK government was formally required to complete a statutory review of the UKIMA, the terms of the review appeared to offer certain concessions to the devolved governments – including a broader scope for the review than was required by statute, with the addition of a pledge to reprioritise the use of Common Frameworks over the UKIMA’s market access principles. However, while the turn back to Common Frameworks works to reintroduce a cooperative approach between the UK and devolved governments, the outcome of the review does not directly amend or repeal the UKIMA, which remains an active part of the statutory framework for regulating the UK’s domestic market.
Looking at the devolved response to the review, the then Welsh Labour government broadly welcomed the reform proposals, while simultaneously pushing for further statutory changes to be made to the UKIMA. In December 2025, however, eleven backbenchers from the Welsh Labour group in the Senedd noted their continued protest, signing a letter that accused the UK government of “rolling back the existing devolution settlement” through its use of the UKIMA – this specific challenge related to the UK government’s “Pride in Place” programme that would include investment in communities in Wales, bypassing the Senedd. The response from the Scottish government was more unequivocal, citing the UKIMA as “the single greatest impediment to more effective and respectful intergovernmental relations”. Thus, while the reprioritisation of the Common Frameworks may have aided in reducing the anxiety of the devolved administrations, the continuation of the UKIMA as a live statutory authority remains a contested issue.
Since the review, the UK Internal Market Act has been analogously compared to a “nuclear deterrent in statutory form” – being a measure that campaigners still wish to abolish, and those in charge seek never to use. More substantively, the reprioritisation of Common Frameworks over the UKIMA is emblematic of a consistent dynamic within the UK’s territorial constitution – an ad hoc solution that works to limit rather than defuse a central point of contestation. That said, should the next Prime Minister seek to continue Keir Starmer’s policy of closer alignment with the EU – a policy broadly welcomed by the devolved governments – its effects may limit the scope for intra-UK divergence and further restrict the application of the UKIMA. In this regard, the regulation of the UK’s domestic market and its implications for the devolution settlement may be set for a further recalibration in the near future.
Gareth Evans.
Gareth is a Lecturer in Law at Swansea University and a contributing writer for the Constitution Society.
The Constitution Society is committed to the promotion of informed debate and is politically impartial. Any views expressed in this article are the personal views of the author and not those of The Constitution Society.