Policy paper

Purpose and role of the Office for the Internal Market

Updated 17 November 2020

This was published under the 2019 to 2022 Johnson Conservative government

What are we going to do?

The UK Internal Market Bill will create an Office for the Internal Market (OIM) within the Competition and Markets Authority (CMA) to carry out a set of independent advisory, monitoring and reporting functions to support the development and effective operation of the UK internal market on an ongoing basis. The OIM will analyse the health of the UK internal market and report to the UK Parliament and the devolved legislatures.

How are we going to do it?

The OIM will support the smooth running of the UK’s internal market, providing independent, technical advice and reports on issues that may impact it. It will sit within the CMA, analysing the health of the UK internal market and reporting to the UK Parliament and all devolved legislatures.

At the highest level, the OIM will be guided by and must have regard to straightforward objectives set out in the Bill, to ‘support, through the application of economic and other technical expertise and having regard to the interests of consumers and other stakeholders, the effective operation of the internal market in the United Kingdom (with particular reference to the purposes of Parts 1, 2 and 3 of the Bill).’

The OIM will also carry out its functions equally in relation to all the administrations in the UK and to support a UK internal market that works equally in the interests of all parts of the UK.

What is the Competition and Markets Authority?

The Competition and Markets Authority (CMA) is the UK’s competition authority and works to promote competition for the benefit of consumers, both within and outside of the UK. It is a global leader for promoting competition and its aim is to make markets work well for consumers, businesses and the economy.

The establishment of the OIM within the CMA will mean the CMA’s considerable existing technical and economic expertise will be available to support the work of the OIM and the development of the UK internal market.

The CMA has existing relationships with the devolved administrations, legislatures, regulators, business and the general public which also makes them well suited for this role. 

What are the benefits of the Office for the Internal Market?

The UK government and the devolved administrations will be able to draw upon the OIM’s impartial, expert reports on the economic impact of proposals and regulations on the operation of the UK internal market across the UK.

The reporting and monitoring functions will ensure that the economic impacts of emerging trends, proposals and regulations on the operation of the UK internal market are independently assessed and evaluated with robust evidence, to help facilitate both good policy-making across the UK and constructive intergovernmental collaboration and agreement where appropriate. In addition, the OIM will undertake information gathering to support its functions.

These reports will be published and laid before all the legislatures, ensuring Parliamentary oversight, transparency and accountability.

What are the responsibilities and functions of the Office for the Internal Market?

This will cover:

• provision of non-binding economic and technical reporting: if requested by an administration, the OIM will provide non-binding and expert advice on the potential economic impact of proposed regulations on the UK internal market
• proactive and reactive monitoring: the OIM will undertake macro-level monitoring reporting on the health, functioning, and evolution of the UK internal market (yearly), sectoral and regional monitoring and reporting, and periodic system monitoring of the Market Access Commitment delivered by the UKIM Bill (5-yearly). The provision of this monitoring by the OIM will ensure that emerging trends and developments are identified, and the economic impact of regulations on the UK internal market can be independently assessed.

In addition, and consistent with the CMA’s existing powers, the OIM will have a power to proactively gather information from businesses, consumers and public bodies to support its advisory, monitoring and reporting functions. This will allow reports and monitoring to be based on rigorous, accurate information and evidence.

The OIM will be able to make ongoing and any requested reporting publicly available, allowing businesses and industry groups to read, review and respond to the findings and trends contained within them. Businesses will be able to make valuable contributions during consultation and evidence gathering stages of report writing. However the OIM will not be able to take on cases from businesses relating to possible unfair treatment.

It is proposed that the OIM will also have a duty in carrying out its functions to have regard to the interests of consumers. This will be achieved through its reports and monitoring, whereby the OIM will evaluate the functioning of the UK Internal Market including its impact on consumers.

The OIM’s non-binding reports and advice will support the separate intergovernmental process between the four administrations to resolve any potential disagreements on the impacts of regulation on the UK internal market and enable dialogue based on robust evidence. The intergovernmental arrangements underpinning this engagement are subject to the outcomes of the Review of Intergovernmental Relations expected by the end of 2020.

The OIM will operate in a way which has regard to the requirements of both the UK government and all the devolved administrations on an equal basis. A time-limited consent mechanism will ensure that the devolved administrations have a significant say during the OIM panel appointment process. The UK government is committed to holding annual ministerial meetings with the devolved administrations to discuss the UK Internal Market system, and consult them on exclusions and legitimate aims.