27 March 2017

Financial Times: The inconvenient truth about EU regulation

[...] now that Mrs May is about to trigger Article 50 and begin talks with the EU, her officials are adopting a more realistic tone. As the Financial Times reports on Monday, the UK is starting to recognise that it will have to keep Britain under the remit of some EU agencies after leaving the bloc in 2019.

Whitehall officials present this concession as a matter of sheer practicality. As the CBI has indicated, a completely clean break would mean the UK having to set up around 34 national regulatory bodies covering areas such as energy, transport and communications.

As an official tells the FT: “We simply don’t have the expertise in some areas and wouldn’t have the time to start up new agencies from scratch.”

However, the lack of time and expertise is not the only reason why the UK will have to stay under the remit of EU agencies, at the very least for a transitional period. Two other factors are also forcing Mrs May’s hand on this matter.

First, business leaders in many UK sectors have always viewed the idea of breaking with EU regulation with alarm. The aerospace and aviation industry, for example, is concerned that the government will give up its membership of the European Aviation Safety Authority.

The EASA sets the rules for certification of everything from aircraft and their components to training schools for repair and maintenance. Recreating a domestic regulatory system in the UK would be expensive and add heavily to costs, say industry executives.

Secondly, British officials are having to recognise that complying with many EU regulations will be essential if the UK is to have any chance of signing a successful free-trade deal with the EU.

The point is hammered home by Michel Barnier, the EU’s chief negotiator, in his op-ed for the FT. Mr Barnier, like Mrs May, wants to strike an ambitious free-trade deal. But he insists this can only be achieved if the UK “ensures fair competition and guarantees high environmental, social and consumer protection standards”.

That means the UK needs to guarantee a level playing field in as many areas of trade as possible, sticking closely to the Brussels regulations. Mr Barnier’s message is that EU citizens will not allow long established rules on areas like the environment to be watered down. [...]

Full article on Financial Times (subscription required)

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