With a no-deal Brexit on the cards, the UK is doubling down on its own interests with the Internal Market Bill. Here’s how Boris Johnson’s latest move could affect your finances.
What is the Internal Market Bill?
Another day, another Brexit controversy. This time, it’s a piece of legislation called the Internal Market Bill. In fact, it’s so controversial it’s dividing the government and prompting resignations – but what is it?
Essentially, the Internal Market Bill aims to protect the free movement of goods and services around the UK, known as the ‘internal market’. It also ensures that all parts of the UK work together to grow the national economy and make new trade deals with other countries.
Like we’ve said, there’s a whole lot of criticism around the Bill – not least because it could break international law – but really, all it’s doing is giving the powers the EU already has over trade policy ‘back’ to the UK.
How does the Bill work?
The Internal Market Bill sets out to achieve a few specific aims.
- Mutual recognition: if goods and services are available in one part of the UK, they should be available across the whole country. In other words, if it’s legal to buy something in Scotland, it must also be legal to buy it in Wales.
- Non-discrimination: no part of the UK can introduce laws discriminating against goods coming from elsewhere in the UK. So, England can’t make it harder to buy goods from Scotland just to promote English goods instead.
Ultimately, the Bill protects Northern Ireland from facing tougher regulations just because it’s across the Irish Sea. You can read more about the Bill here.
What happens next?
As with all things Brexit, no one really knows.
- The Bill isn’t law yet. It’s still facing amendments in the House of Commons.
- There’s still time to find another way to handle the issues.
All we can do is keep an eye on how the Internal Market Bill fares in Parliament.
How could the Bill affect my money?
While we’re all interested in what’s happening at a national level, there’s another huge question to consider: how does the Internal Market Bill affect your money?
Well, it doesn’t. At least, not directly.
The Bill is really concerned with protecting the free flow of goods around the UK after the transition period ends. So it’s a fairly narrow issue. But the Bill could affect the UK’s future relationship with the EU, and that’s the part that will probably affect your money.
So, here are three ways the Bill could indirectly affect your finances (if it becomes law, of course).
1. Larger import tariffs
You don’t currently pay customs fees or other fees to import goods from the EU. If there’s no Brexit deal, we’ll default to World Trade Organization (WTO) terms, and you’ll pay customs fees.
And right now, EU leaders aren’t keen to agree a deal unless the Internal Market Bill is heavily amended.
On the other hand, higher import fees might encourage more of us to buy locally, which could boost the UK economy. Given the combined impact of coronavirus and Brexit, this doesn’t seem to be a bad thing.
2. Higher credit card fees
Yes, it’ll probably cost you more to pay by credit card within the EU. There are two reasons for this.
- The UK belongs to the Single Euro Payments Area (SEPA). SEPA makes it easier and cheaper to pay for goods across the EU. As it stands, we’ll lose access to SEPA. The result? It’ll probably take longer to complete credit card payments, and they may be more expensive.
- It’s currently illegal for retailers to charge you extra for paying by credit card. Without a Brexit deal, this law won’t apply anymore, and you could be charged more for using a credit card.
3. Bigger bills
Again, this one’s twofold.
- If the UK loses its access to EU gas and electricity, some customers could end up paying more for their utilities.
- It’ll be more expensive to import food from the EU. So you could notice a hike in your weekly food bill if you buy a lot of fruit, vegetables, meat or alcohol that has come from the EU.
Whatever happens with the Internal Market Bill, it’s clear that we’re leaving the EU. And it’s even clearer that we could conceivably leave without a trade deal.
While this sounds a little gloomy, you should remember that no one knows what will actually happen next. Much will depend on what UK government policy looks like in post-Brexit Britain.
The bottom line? Consider cutting back on unnecessary spending, and paying down your credit cards, until we see how Brexit plays out.
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