Fred de Fossard is head of the British Prosperity Unit at the Legatum Institute.
After several deadline extensions and debates in Whitehall, the Government recently announced that it will allow indefinitely goods into the British market with the EU’s CE kitemark.
This was reported as a climbdown by the Guardian and the Financial Times, and a sign of the failure of the Government to prepare businesses for its own United Kingdom Conformity Assessment (UKCA) mark. Many Brexiteers suggested it is further sign of regulatory alignment with the EU.
Although this presents difficulty for the UKCA mark, there is more to this than meets the eye. With the right approach, the Government could use this to embark, counterintuitively, on a radical pivot away from EU regulatory standards.
Britain was once a world leader in standards-setting, thanks to the pioneering British Standards Institution. During our membership of the EU, market-friendly mutual recognition of standards gave way to the more dirigiste harmonisation of standards across Europe, which reduced flexibility and reduced the BSI, once a leader in the field, to an outpost of Brussels.
One of the great opportunities of Brexit is the opportunity to establish a regulatory regime for goods and services which is more open to competition and innovation than the EU’s. Product standards are an important part of this; Radomir Tylecote of the Legatum Institute noted them as fertile territory for reform back in 2017.
However, the UKCA mark has so far failed to deliver the sort of divergence and innovation many hoped for.
Its requirements for approval are essentially the same as those used by the EU, with some mitigations such as electronic goods not having to have the UKCA mark engraved into the product, allowing stickers instead. Thus, to businesses trying to sell products to both the UK and EU, UKCA approval is a duplicative cost, putting the same products through essentially the same testing processes for access to a smaller market.
While this poses no difficulties with items for domestic consumption (such as pint glasses, all now emblazoned with UKCA marks) for specialist electronic goods like medical devices, the costs associated with the UKCA become a disincentive to sell in Britain.
It is likely that a combination of status-quo bias and the eventual hope that the EU would agree a mutual recognition of standards with the UK led to the creation of the UKCA in this way. But it need not be so: in February 2022, Victoria Hewson wrote the case for the unilateral recognition of the CE mark for the Institute of Economic Affairs, as a free-trading, and pro-consumer measure.
This was endorsed by Jacob Rees-Mogg, then Brexit Opportunities Minister; he believed that while two-way recognition is best, one-way recognition is better than no-way recognition, and British consumers should not suffer the costs of non-tariff barriers imposed by their own government. The Government’s decision is (so slow does the British state operate) ultimately the conclusion of this process.
As things stand, however, this does appear like a step towards realignment with the EU: little significant deregulation has occurred since Brexit, and many believe the Windsor Framework locks the UK into regulatory lockstep with Brussels indefinitely. Trade commentators referring to the inevitability of the EU’s ‘gravity’ are hardly likely to assuage Brexiteer concerns that ministers have reverted to the sort of paucity of ambition seen during Theresa May’s premiership.
But the Government has a chance to turn this from a narrow administrative decision into an exciting step towards freer trade and regulatory freedom.
How? By expanding this measure to the unilateral recognition of consumer goods in a wider range of friendly, developed countries – ideally those part of the CPTPP trade agreement, whose membership was originally advocated by Legatum Institute in 2017.
This could be done either by recognising each nation’s own kitemark, or by granting automatic UKCA approval to, for example, goods from Canada, Australia, Japan, or Singapore. As the UK enjoys mutual recognition of standards with some CPTPP countries already, this is an obvious and simple step to take.
Rather than a duplicative cost and an unloved government scheme, UKCA should become a byword for innovation and competition, as well as new goods which are not available in the EU. This way, we could avoid repeating the mistakes of duplicating the EU’s REACH regulations for chemicals, which have been notorious for raising the cost of goods and shutting out competition.
A similar idea proposed in 2022 was met with resistance in Whitehall, likely motivated by a combination of protectionism and a desire to justify the costs sunk into UKCA.
But as well as benefiting consumers by increasing the variety of goods available, it would also start to reorient Britain away from the EU’s orbit, especially as new trade flows are established following the ratification of our membership of CPTPP.
Some progress is occurring. Pilots of the unilateral recognition of some consumer goods received collective agreement last year, and the Government has made positive noises about allowing the electronic, rather than physical, labelling of goods with screens, which would cut the costs of UKCA approval further.
Jeremy Hunt’s announcement that it would trial the unilateral recognition of medicines approved by other high-standards regimes provides an irresistible precedent, and strengthens the case for such a policy regarding consumer goods.
The decision on CE shows that the principle of unilateral recognition can be turned into reality. But if the Government really deliver the benefits of free trade, greater competition and cheaper goods to the British people, it must go further, and extend recognition to the CPTPP and beyond.
Fred de Fossard is head of the British Prosperity Unit at the Legatum Institute.
After several deadline extensions and debates in Whitehall, the Government recently announced that it will allow indefinitely goods into the British market with the EU’s CE kitemark.
This was reported as a climbdown by the Guardian and the Financial Times, and a sign of the failure of the Government to prepare businesses for its own United Kingdom Conformity Assessment (UKCA) mark. Many Brexiteers suggested it is further sign of regulatory alignment with the EU.
Although this presents difficulty for the UKCA mark, there is more to this than meets the eye. With the right approach, the Government could use this to embark, counterintuitively, on a radical pivot away from EU regulatory standards.
Britain was once a world leader in standards-setting, thanks to the pioneering British Standards Institution. During our membership of the EU, market-friendly mutual recognition of standards gave way to the more dirigiste harmonisation of standards across Europe, which reduced flexibility and reduced the BSI, once a leader in the field, to an outpost of Brussels.
One of the great opportunities of Brexit is the opportunity to establish a regulatory regime for goods and services which is more open to competition and innovation than the EU’s. Product standards are an important part of this; Radomir Tylecote of the Legatum Institute noted them as fertile territory for reform back in 2017.
However, the UKCA mark has so far failed to deliver the sort of divergence and innovation many hoped for.
Its requirements for approval are essentially the same as those used by the EU, with some mitigations such as electronic goods not having to have the UKCA mark engraved into the product, allowing stickers instead. Thus, to businesses trying to sell products to both the UK and EU, UKCA approval is a duplicative cost, putting the same products through essentially the same testing processes for access to a smaller market.
While this poses no difficulties with items for domestic consumption (such as pint glasses, all now emblazoned with UKCA marks) for specialist electronic goods like medical devices, the costs associated with the UKCA become a disincentive to sell in Britain.
It is likely that a combination of status-quo bias and the eventual hope that the EU would agree a mutual recognition of standards with the UK led to the creation of the UKCA in this way. But it need not be so: in February 2022, Victoria Hewson wrote the case for the unilateral recognition of the CE mark for the Institute of Economic Affairs, as a free-trading, and pro-consumer measure.
This was endorsed by Jacob Rees-Mogg, then Brexit Opportunities Minister; he believed that while two-way recognition is best, one-way recognition is better than no-way recognition, and British consumers should not suffer the costs of non-tariff barriers imposed by their own government. The Government’s decision is (so slow does the British state operate) ultimately the conclusion of this process.
As things stand, however, this does appear like a step towards realignment with the EU: little significant deregulation has occurred since Brexit, and many believe the Windsor Framework locks the UK into regulatory lockstep with Brussels indefinitely. Trade commentators referring to the inevitability of the EU’s ‘gravity’ are hardly likely to assuage Brexiteer concerns that ministers have reverted to the sort of paucity of ambition seen during Theresa May’s premiership.
But the Government has a chance to turn this from a narrow administrative decision into an exciting step towards freer trade and regulatory freedom.
How? By expanding this measure to the unilateral recognition of consumer goods in a wider range of friendly, developed countries – ideally those part of the CPTPP trade agreement, whose membership was originally advocated by Legatum Institute in 2017.
This could be done either by recognising each nation’s own kitemark, or by granting automatic UKCA approval to, for example, goods from Canada, Australia, Japan, or Singapore. As the UK enjoys mutual recognition of standards with some CPTPP countries already, this is an obvious and simple step to take.
Rather than a duplicative cost and an unloved government scheme, UKCA should become a byword for innovation and competition, as well as new goods which are not available in the EU. This way, we could avoid repeating the mistakes of duplicating the EU’s REACH regulations for chemicals, which have been notorious for raising the cost of goods and shutting out competition.
A similar idea proposed in 2022 was met with resistance in Whitehall, likely motivated by a combination of protectionism and a desire to justify the costs sunk into UKCA.
But as well as benefiting consumers by increasing the variety of goods available, it would also start to reorient Britain away from the EU’s orbit, especially as new trade flows are established following the ratification of our membership of CPTPP.
Some progress is occurring. Pilots of the unilateral recognition of some consumer goods received collective agreement last year, and the Government has made positive noises about allowing the electronic, rather than physical, labelling of goods with screens, which would cut the costs of UKCA approval further.
Jeremy Hunt’s announcement that it would trial the unilateral recognition of medicines approved by other high-standards regimes provides an irresistible precedent, and strengthens the case for such a policy regarding consumer goods.
The decision on CE shows that the principle of unilateral recognition can be turned into reality. But if the Government really deliver the benefits of free trade, greater competition and cheaper goods to the British people, it must go further, and extend recognition to the CPTPP and beyond.