UK Internal Market Act 2020 Review: Government Response

(Limited Text - Ministerial Extracts only)

Tuesday 15th July 2025 Written Statements

[The Minister for Trade Policy and Economic Security (Mr Douglas Alexander)]

The UK Government are today publishing their response to the review of the United Kingdom Internal Market Act 2020 and public consultation.

The review was launched in January 2025, with its scope expanded beyond what the law requires, to help determine how the operation of the Act can be improved. The review is now complete, well ahead of the statutory deadline of December 2025.

During the review, the UK Government conducted a 10-week public consultation, closing on 3 April. We engaged a wide variety of stakeholders, and more than half of the 85 responses received were from the business community. We are grateful to everyone who took the time to send a written response and to join the stakeholder roundtable discussions that we held during March 2025.

The consultation confirmed that businesses, wherever they are based, need certainty that they can trade freely within the UK, unencumbered by unnecessary disruption resulting from poorly managed regulatory difference between the nations. Businesses also require clarity and certainty to take informed planning decisions and make confident investment decisions for the future. This is highlighted by the latest figures from the Office for National Statistics showing that trade between the four nations of the UK is valued at £129 billion, equivalent to around 6% of UK GDP in 2019, and that it is particularly important to the economies of Scotland, Wales, and Northern Ireland.

The UK Government have been explicit about the need for businesses to have certainty, which is why the review has not considered repeal of the Act. Instead, we pledged to explore improvements in the way the Act’s provisions operate through common frameworks. There was also strong support in our consultation for the four Governments within the UK to work together through the common frameworks. That is why the UK Government’s response describes how to manage the UK internal market in a more transparent, proportionate and pragmatic way, fostering open policy discussions between the UK Government and devolved Governments, with greater clarity and engagement with businesses and other stakeholders.

In common frameworks, discussions between the four Governments can maximise opportunities for alignment where in the nations’ mutual interest, and manage divergence in ways that might promote long-term growth across the UK.

Therefore, the UK Government will:

implement UK Internal Market Act exclusions that have been agreed by all Governments within a common framework;

alongside economic impacts, now consider in particular environmental protection and public health in UK Internal Market Act exclusions, thereby ensuring a balance of factors is considered;

establish a minimum economic impact process for considering smaller exclusions, and implement them where all Governments agree the exclusion has an economic impact of less than £10 million a year;

implement a “reserve” exclusions process where it has not been possible for all four Governments to reach agreement on an exclusion;

work with the devolved Governments to agree processes for how all four Governments engage with businesses and other stakeholders on matters being discussed in common frameworks; and

work with the devolved Governments to agree a process for all four Governments to jointly refer UK internal market matters for advice to the Office for the Internal Market.

The UK Government are confident these measures meet the key requests of many stakeholders, allowing Governments to move forward together in managing the internal market in a way that delivers growth, jobs and opportunities across our country.

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