This first appeared in The National, on Saturday 5th April 2025.
When Scotland votes in the Holyrood election next year there will be voters casting their ballot who were born in 2010, when Scotland had its fourth First Minister and was preparing for the fourth election of the devolution era.
Devolution is not new – and the fact that decisions on key areas like health, education and the environment are taken in Edinburgh, Cardiff and Belfast is now taken for granted.
But devolution has not been unchanging. While Holyrood has gained additional powers over its lifetime it has also, in the aftermath of the Brexit referendum, had its hands tied across a range of areas that were previously within the Scottish Government’s power.
The UK Internal Market Act was introduced to replace the European single market we were leaving, and sought to ensure that businesses could continue to trade across the UK. So far, so uncontroversial.
But in practice the UK internal market has had major implications – most notably in the case of Scotland’s planned Deposit Return Scheme, which faced an eleventh-hour intervention from UK Ministers and was subsequently paused and kicked into the long grass.
Deposit return is a well understood concept which exists elsewhere. Ireland introduced its scheme just last year. If Scotland had introduced its own scheme before Brexit we would all now be used to returning our bottles to the supermarket – but what is possible within the European single market was blocked within the UK internal market.
The UK Government is currently reviewing the Internal Market Act and has made positive noises about the need to improve its operation. This is a welcome opportunity to revisit legislation which has – intentionally or unintentionally – undermined the devolution settlement.
There is of course a need to harmonise trade across the UK. But there is also a wider point of principle at stake. The Scottish Government, with vast responsibility for the environment and able to set climate targets and to regulate a wide range of activities, should be able to introduce a recycling scheme.
The issues with the Act go beyond deposit return. Other policy areas have faced complications because of Internal Market rules, and straightforward steps like ending the environmentally destructive use of peat in garden compost, or banning rodent glue traps, have been dragged into a constitutional tug-of-war.
This is a result of the unnecessarily strict approach to managing the internal market. As the Act focuses on the trade of goods, it limits the ability of devolved governments to intervene at the point a product is sold. Even minor and proportionate measures, relating to areas of devolved responsibility, are blocked – and this can only be overturned by the administration in question seeking an exemption from the UK government.
One of the strengths of devolution has always been the ability of each nation to pursue its own priorities, to innovate, and to learn from each other. This was possible under the European single market without damaging trade across the UK. Now, the internal market is having a chilling effect across policymaking, with necessary measures not pursued or dragged into the bureaucratic and politically contentious territory of exemptions.
The environmental sector across the UK is united in seeing the Internal Market Act as an unnecessary blocker to action – a viewpoint shared by the constitutional experts who have given evidence on the review to Holyrood. A system which allows the devolved governments to take proportionate steps without first receiving permission from the UK government is possible. The UK Government has the chance to listen to these pleas and to redesign the internal market to respect devolution.
Dan Paris, Director of Policy and Engagement at Scottish Environment LINK