Photographer: Chris Ratcliffe/Bloomberg

Manufacturers Urge Brexit Continuity by Keeping EU Rules for Now

  • EU laws should be ‘transposed’ into U.K. statutes, bosses say
  • Industry embedded in EU fears disruption and uncertainty

The U.K. should maintain European Union regulations covering everything from working hours to chemicals until after the government sets out its plans for Brexit, said British manufacturers anxious to avoid a policy vacuum and safeguard access to their biggest export market.

For now, the U.K. should “transpose” EU regulations not already reflected in its own laws because the scale and complexity make a more selective approach impractical, manufacturing association EEF said in a report published Wednesday.

“We want government to provide regulatory and policy certainty in this important arena,” said Claire Jakobsson, head of energy and environment policy at the group, in a statement. “But in the longer term there is clearly an opportunity to pull back from EU regulation where it does not work for the U.K.”

U.K. laws have become increasingly enmeshed with EU directives since the country joined the predecessor to the bloc in 1972. Once the government has clarified its Brexit strategy, lawmakers should consult with business to “review aspects of EU law which act as a drag on global competitiveness,” the report said. 

One such regulation might be the European Industrial Emissions Directive, which aims to reduce pollution from factories and other sources. “It’s a huge cost burden for maybe not quite the environmental outcome that it’s setting out to achieve,” Jakobsson said in a call.

52 Percent

At this stage, red tape might be a price worth paying for access, the EEF said, because the EU is the destination for 52 percent of the U.K.’s manufactured exports by value. The U.K. has yet to trigger formal talks on leaving the EU, a process that could take as much as two years.

Less than a quarter of companies surveyed by the EEF want the U.K. to abandon the EU’s complex regulations on waste and chemicals, even though the group describes them as “burdensome.” Approximately twice as many advocated the status quo. Any move to replace these rules with tailored U.K. laws in the immediate future could be “costly and highly disruptive,” the EEF said, because businesses have already sunk substantial costs into dealing with regulation.

U.K. businesses have spent more than a decade satisfying requirements for a set of EU chemicals regulations called REACH, affecting approximately 30,000 substances. The EEF expects that exports to the continent will still depend on compliance with the 849-page document.

Sign up to receive the Brexit Bulletin, a daily briefing on the biggest news related to Britain's departure from the EU.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE