Huge gaps in UK regulation exist following transition from EU

A joint initiative by ‘Negotiating the Future’ – a project undertaken by UK in a Changing Europe together with the Centre for Competition Policy, and Brexit & Environment, our new report ‘UK regulation after Brexit’, takes a first step to mapping the new regulatory settlement in the wake of the UK’s withdrawal from the EU.

The report explores key findings over twenty-six areas (see below) including how UK regulation has changed since the transition period ended on 31 December 2020. It looks at the UK’s readiness to assume regulatory responsibility from the EU, the extent the UK has diverged from EU policy, and the long-term prospects for UK alignment or divergence.

It finds that the UK is still not in a position to assume responsibility for regulation in several critical policy areas including trade, crime and the environment. The UK was ill-prepared when responsibility for regulation switched from the EU following the end of the transition period. The UK does not have the physical or IT infrastructures in place to manage trade in its new relationship with the EU and is relying on transitional arrangements to make the system work.

UK regulators are still not ready to take on their new responsibilities. For instance, in the environment, the UK left the EU’s European Environmental Agency but the UK Office for Environmental Protection has still not opened, leaving the UK without a body to monitor government action or scrutinise compliance with environmental law.

Many UK authorities are not adequately equipped compared to the EU bodies they replaced. Staffing and budget are an issue, but UK bodies lack powers in inspection and enforcement too. They have also lost access to data crucial to the police and border control. Europol databases had been consulted more than 500 million times a year by UK authorities, and the Metropolitan Police made more than 100,000 requests for information from the European Criminal Records Information System.

The report also raises important question marks about costs and duplication. In chemicals and aviation, UK regulators replicate the same functions that are performed by EU bodies and in those industries, which are both heavily regulated, it will be a tall order for UK authorities to develop the same levels of expertise as the EU bodies they replace.

UK businesses wanting to operate in both the UK and the EU will have to submit to the same bureaucracy twice. In chemicals, industry will have to cover the costs of testing and registration a second time, estimated at a total of £1bn, when they only recently paid for the creation of the EU system.

The report, also describes how the UK EU deal leaves significant ‘unfinished business’. There are grace periods for customs formalities, issues where the UK and the EU still need to reach agreement, and transitional arrangements where the terms of the UK’s withdrawal from the EU are not yet decided and where the full effects have yet to be felt. A future review of energy is linked to how well the new arrangements play out in fisheries, while the entire agreement will be reviewed every five years.

The report concludes that the UK’s decision to leave the single market and the customs union was driven by a determination to gain regulatory autonomy at all costs. But, in practice, the UK is unlikely to be able to diverge over the long term. The UK is bound by the terms of the Trade and Cooperation Agreement and highly dependent on trade with the EU and the UK is constrained by wider international laws and conventions. The EU is a global standard setter in many areas, so if the UK were to diverge from these standards it is likely to disadvantage businesses in the country.

List of contributors

The architecture of regulation and regulatory agencies by Michael Harker and Kathryn Wright
The level playing field: regulation of trade in goods and services by Meredith A. Crowley
Trade in goods by David Bailey
Authorised economic operators (AEO) and trade by Wanyu Chung and Antonio Navas
Medicines and medical devices by Mark Dayan, Nicholas Fahy, Tamara Hervey, and Matthew Wood
Competition policy and state aid control by Andreas Stephan
Public procurement regulation by Albert Sánchez-Graells
Digital and data regulation by Amelia Fletcher
Data protection by Karen McCullagh
Changes to intellectual property law by Sabine Jacques
Consumer protection by Amelia Fletcher
Financial services by Scott James
Energy by Pierre Bocquillon
Road haulage by Sarah Hall and Martin Heneghan
Maritime transport by Sarah Hall and Martin Heneghan
Aviation by Hussein Kassim
Farming policy by Michael Cardwell
Agriculture: environmental, food and animal health standards
by Mary Dobbs and Ludivine Petetin
Fisheries policy by Christopher Huggins
Food safety by Tola Amodu and Andrew Fearne
Environment regulation by Charlotte Burns and Andrew Jordan
Climate policy by Brendan Moore and Andrew Jordan
Workers’ rights by Catherine Barnard
Immigration policy by Catherine Barnard
Asylum and refugees by Steve Peers
Security and cooperation on crime by Steve Peers
Conclusion by Cleo Davies and Hussein Kassim