04/12/2020 20:45 GMT | Updated 04/12/2020 20:46 GMT

Will Michael Gove Use A Brexit Deal To Back Off Confrontation On Devolution?

PM calls it a “power surge”, Sturgeon calls it a “power grab”. But the Internal Market Bill may be left to wither and die.

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Hopes of a big breakthrough on a UK-EU trade deal took quite a knock tonight as Michel Barnier tweeted that “significant divergences” remain between the two sides. Still, frantic talks may continue this weekend, as both London and Brussels try one last (no, really last) big push to get an agreement. Time is indeed running out.

Among the many reasons for the urgency is that the UK’s controversial Internal Market Bill returns to the Commons on Monday. In a move that suggested No.10 thought a deal would be done by then, MPs will in theory be voting to reinsert the most controversial bits of this legislation that were stripped out by the Lords.

The most headline-grabbing element was of course the provision to break the law, by reneging on the Northern Ireland protocol bit of the withdrawal agreement signed between Boris Johnson and the EU earlier this year. The idea of tearing up international treaties is what prompted a huge Lords defeat. It’s also what triggered warning shots from a certain Joseph Robinette Biden Jnr.

If a Brexit deal is done in coming days, the whole idea of the UK needing its “safety net” (copyright No.10) would be rendered not just academic but redundant.

But there’s another less-noticed element of the bill, in England at least, that provides yet another incentive for ministers to quietly bin their own legislation: its threat to devolution. The Internal Market Bill gets its very name from the government’s desire to codify trade rules between the four nations after the Brexit transition returns key powers to the UK.

Michael Gove originally described the bill as providing a “power surge” to Scotland, Wales and Northern Ireland because it handed back to them scores of powers held by Brussels. But the devolved administrations, particularly Nicola Sturgeon and Mark Drakeford, said it was in fact a “power grab” because it threatened their right to set local regulations in lots of areas such as food and agriculture standards.‌

Sturgeon and Drakeford were most angered because they had already started under the May administration a “common frameworks” mechanism to sort out internal trade post-Brexit. This is a kind of gentleman’s agreement, not requiring legislation, to allow a dispute resolution process where each nation could diverge from trade rules.

The Internal Market Bill cuts completely across these common frameworks, allowing any business in one part of the UK to undercut locally agreed rules. Even some Whitehall officials were baffled why the bill was drafted in the first place. A ministerial belief that it would somehow “strengthen the union” was apparently the key driver.

The problem is that the bill has backfired spectacularly and by effectively destroying the authority of devolved areas, the legislation has further fuelled independence demands. The reaction was so bad that even in Wales, where support for a breakaway is much lower than in Scotland, independence has suddenly become a hot topic.

Reflecting all this, one of the government’s biggest Lords defeats was on an amendment by Lord Hope, a former Supreme Court judge, that gutted the entire devolution segment from the bill. And I’m told that it was this defeat that finally brought home to Gove just what a mess the legislation was now in.

Sources tell me that Gove has been looking at ways to either amend the devolution section of the bill, or ditch it altogether. If the whole bill is quietly left to die, he will have avoided gifting a powerful weapon to the independence movements. This matters because, despite Johnson’s official protestations that he won’t grant a second Scottish referendum, Gove’s unofficial task is to line up the No campaign arguments.

With polls consistently showing a lead for a Yes vote (a new poll this week put it at 56%), the stakes are high. The Johnson government also knows that Brexit has been a big driver for those who voted No last time. Many of the switchers think an independent Scotland within the EU is a better option than being part of Brexit Britain. And they could take the PM at his word with a ‘take back control’ move of their own.‌

If you strip out both the international law-breaking and the devolution-wrecking bits of this bill, there’s not much left that can’t be sorted in other regulations or legislation. The Lords have already done the government a favour by gutting it as efficiently as a Billingsgate fishmonger and now ministers may finally put it out of its misery.

The government may try to buy a bit more time to get its Brexit deal agreed, using “ping pong” between the Lords and Commons to keep the bill on life support. I understand the Lords are determined to dig in, and with the hard deadline of the need for a trade deal this month, their hand is a strong one. But once a deal is agreed, a brand new ‘UK-EU Trade Deal Bill’ will take precedence, and could take in any non-controversial dregs of the Internal Market Bill.

If that happens, Boris Johnson will have avoided an instant row with Joe Biden, but also lowered the temperature in relations with devolved nations. With many Scots already upset at Johnson’s blurting out that devolution was a “disaster” (and Jacob Rees-Mogg suggesting it could be torn up), he’s going to need all the help he can get to avoid being remembered as the PM who oversaw the break up of the United Kingdom.