By Bryan Hay

In preparation for Brexit, the semi-autonomous Scottish Parliament commissioned an internationally respected expert on federalism to prepare a background paper on internal-market regulation in the United States as a possible source of ideas for instituting market regulations in the United Kingdom without the European Union.

John Kincaid, Robert B. and Helen S. Meyner Professor of Government and Public Service and author of various works on federalism, spent part of the summer preparing a 36-page report detailing the framework of internal-market and commercial regulation in the United States dating from the U.S. Constitution in 1788 to today.

“Many of the regulations that govern economic activity within the United Kingdom are European Union regulations. Those regulations will go away once Brexit occurs,” Kincaid says. 

If Brexit occurs, then the European Union rules that govern the United Kingdom’s internal market will evaporate, leaving a void that will need to be filled with new U.K. and Scottish legislation, Kincaid notes.

Scottish lawmakers want to know what positive and negative lessons might be learned from the American federal experience to inform thinking about legislation the Scottish Parliament might introduce and also propose for the UK Parliament at Westminster.

“Professor Kincaid’s insightful paper on the nature, structure, and regulation of the U.S. internal market will provide the Parliament’s Finance and Constitution Committee with valuable information to inform its ongoing work on the development of Common Frameworks in the UK, post-Brexit,” said Denis Oag, head of research and library of the Scottish Parliament Information Centre.

“Our system is very complex; that’s partly why the paper was long. I provided plenty of information from which to choose,” Kincaid says. “When you look at the U.S. system, the states do a lot more economic regulation than the average person may realize.”

The United States Constitution establishes federalism, the sharing of powers between the federal government and 50 state governments. Over time, the federal government has stepped in with more and more regulations, but where it hasn’t stepped in, states provide their own regulations, part of the nation’s federalist roots.

“States regulate all occupations, most consumer matters, securities, and insurance, among many other things,” he says. “Most people look at the federal government as the more visible entity in terms of regulation, but consider, for example, that every state has an insurance commissioner. Premiums that Americans pay on most insurance policies are determined by the state, not the federal government.”

Much has changed since the U.K. entered the EU in 1973, which predated formation of the new Scottish Parliament by a quarter-century.

“The Scots don’t want to revert to the more unitary system that existed when the U.K. joined the EU,” Kincaid believes. “With devolution progressively moving legislative powers away from London to Scotland, Wales, and Northern Ireland, perhaps there will be a more federal future ahead for the U.K.”

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