UK-EU alignment in the spotlight
The Engineering and Machinery Alliance (EAMA), of which MTA is a member, signed a letter, published in The Guardian this week, which urges “a policy of alignment with EU standards and regulations unless it is explicitly not in the UK’s interests to do so”. The initiative was led by Paul Drechsler, chair of the International Chamber of Commerce UK and formerly president of the CBI and of London First. A total of 61 firms, trade bodies, academics and politicians signed the letter.
Alignment with the EU is a significant and challenging issue in terms of machinery products, and it is to be hoped that the letter will help stimulate debate. On the one hand, it is clear that there is little demand from businesses for the UK to move away from EU rules that we have. A consultation announced a year ago, calling for ideas for reform of EU rules to boost “advanced manufacturing”, is believed that have drawn few suggestions from the industry.
Much more pressing and difficult is the EU making changes such that it is no longer aligned with EU-derived regulations that Britain has now. The UK government will have to decide how to respond in each case – is it in the UK’s interest to change in step with the EU or not. That is likely to be a key issue for the next government.
It is important that the government – of whatever political make-up – is strongly influenced by industry, and that sectors and companies make their views known; and that there is a process for consultation.
Labour’s position
The Drechsler-led letter is published a week after comments made by Labour leader Sir Keir Starmer which sparked controversy and led to accusations that he wanted to take the UK back into Europe, in effect if not in law.. Speaking in Montreal, Canada on a platform alongside the prime minister of Norway, he said: “Actually we don’t want to diverge, we don’t want to lower standards, we don’t want to rip up environmental standards, working standards for people that work, food standards and all the rest of it.”
This went beyond what Starmer had said before. The question arises as to whether “we don’t want to diverge” should be taken literally and absolutely. Labour quickly indicated that it should not. “We don’t support dynamic alignment… We will not be in a position where we are a rule taker. Any decisions on what standards we follow will be taken in the UK parliament.” (Financial Times) Dynamic alignment means agreeing not only to follow existing EU rules but also to copy and paste new ones, to facilitate closer trade.
Labour says it would consider dynamic alignment in limited areas, such as a veterinary agreement (FT). That being the case, one can imagine a proliferation of limited areas. Switzerland, for example, has largely accepted the EU Single Market but with exemptions. It evolved its EU relationship differently from the UK and relations remain tense, to some degree.
Meanwhile, Starmer has re-stated Labour’s position that the UK will not rejoin the Single Market and will not rejoin the customs union. Trade friction will therefore continue. In Brussels, sources have indicated that Starmer has impressed as someone to be trusted but have repeatedly said that the 2025 review of the Trade and Co-operation Agreement with the UK will be purely technical, designed to ensure full implementation of the existing deal.
There is an opportunity to make comments on alignment to government through the UK product safety review consultation, which closes on October 24th.
We welcome comments from members, which will be in confidence – please send any comments directly to Jack Semple at EAMA (email: [email protected]) with a copy to Geoff Noon at MTA (email: [email protected]).
Relevant links:
Letter: As business leaders, we support closer alignment with the EU | Trade policy | The Guardian
City firms’ regulatory burden rises as UK and EU diverge on financial rules (cityam.com)
https://news.sky.com/story/brexit-we-dont-want-to-diverge-from-eu-says-sir-keir-starmer-12966338
List of signatories: Business leaders sign letter in support of beneficial alignment — UK Trade and Business Commission PSR consultation: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1175948/uk-product-safety-review-consultation-august-2023.pdf