Publication of the first official analysis of the UK internal market

The IOM report demonstrates the scale and importance of trade, which is expected to exceed £190 billion a year, between England, Scotland, Wales and Northern Ireland.

In its report, the IOM – part of the Competition and Markets Authority (CMA) – describes the flow of goods and services across the borders of the internal market and offers new insights into the extent to which regulatory policies differ between the nations of the UK.

The report includes new data on the domestic market economy, including data from 2 surveys.

Key economic findings from the IOM report include:

  • Most businesses find it easy to trade between UK countries at present, with the extent of cross-border trade remaining the same or increasing over the past year
  • The highest proportion of cross-border trade was in manufacturing and wholesale/retail trade, with each sector accounting for over a third of total trade
  • Scotland, Wales and Northern Ireland trade more with the rest of the UK than with the EU or the rest of the world (England does not publish intra-UK trade data)
  • Many markets are local and larger companies are more likely to trade with other countries in the UK than with smaller ones

Andrea Coscelli, Chief Executive Officer of CMA, said:

This first-of-its-kind report on the flows and regulations of trade between the nations of the UK illustrates not only the vast scale of the internal market, but also the importance of the work that IOM has been commissioned to do.

With billions of pounds of trade between the 4 nations every year, it is important that the internal market works for the benefit of the people of the UK. Although the IOM has so far found few substantive regulatory differences between countries, this is not surprising given the short time that has elapsed since Brexit was implemented.

By deepening our understanding of cross-border trade, IOM’s work will help make buying and selling across the UK as easy as possible, wherever you are based.

Following the UK’s departure from the EU, significant powers were returned to the UK government and devolved administrations, increasing the possibility of regulatory differences between the 4 nations. Part of IOM’s internal market assessment therefore focused on whether the regulations of the 4 governments have started to differ more from each other since the end of the Brexit transition period on 31 December 2020.

The IOM found no evidence of any new substantial regulatory differences between the 4 administrations since the UK left the EU. However, this is not unexpected at this stage and differences may emerge over time as governments develop and implement their programs.

Different policies in different jurisdictions could have implications – both positive and negative – for trading across borders, including changes in the price, quality and choice of goods and services. IOM has identified certain sectors where certain regulatory differences may be more likely, including: environment, energy consumption, agriculture, animal welfare, food, beverage and health, and certain security issues.

Ahead of the release of its first statutory reports in March next year, IOM will continue to work with the 4 UK governments to help individuals, businesses and policy makers by improving understanding of trade in the UK. United States, in particular by developing new data. The IOM will also review any emerging political developments that may affect businesses’ ability to sell their products and services across the UK.

IOM is also ready to respond to requests from governments for reports and advice on specific regulatory provisions. Individuals and businesses can report any issues that may impact the UK internal market by completing the IOM web form.

Notes to Editors

  1. IOM was launched in September 2021 to provide non-binding technical and economic advice to the 4 UK governments on the effect on the UK internal market of the specific regulations they introduce. The IOM operates independently of the 4 governments.
  2. Since leaving the EU, significant powers have devolved to the UK government and devolved administrations, increasing the possibility of regulatory differences between nations. IOM’s work helps governments understand the extent to which businesses are able to sell their products and services across the UK’s 4 countries and the impact of regulatory provisions in this regard, to be considered alongside questions broader policies.
  3. A provision (e.g. legislation, regulation, etc.) which is necessary to implement the Northern Ireland Protocol will fall outside the scope of UK Internal Market Law and IOM will not be able to offer advice or produce reports on this subject.
  4. IOM publishes this report giving an overview of the UK Domestic Market as a discretionary product under Section 33(1) of the UK Home Market Act, six months after its inception and a year before it be required to produce its first annual report and five-year reports.
  5. IOM is working with the Office for National Statistics and analysts from all 4 UK countries to review and improve trade data within the UK.
  6. Further information is available on the homepage of the Internal Market Office.
  7. Research from the Center of Excellence for Economic Statistics estimates that intra-UK trade is set to exceed £190bn a year.

  8. The CMA commissioned a telephone survey of nearly 600 businesses across the UK to gain a deeper understanding of the UK domestic market economy and to provide data that is more recent than published statistics. Analysts from the 4 governments made valuable contributions to this work.
  9. The CMA has included questions on intra-UK trade in the Office for National Statistics’ Business Insights and Conditions survey. The survey shows that the highest proportion of cross-border trade was in manufacturing (42%) and wholesale/retail (40%).
  10. For media enquiries, please contact the press service via [email protected] or 020 3738 6460.

Comments are closed.