Delays to post-Brexit regulation posing risks to UK consumers and businesses
12 October 2022
In a report today the Public Accounts Committee says UK regulators are “struggling to recruit and retain the skills they need to regulate effectively” in their new and expanded roles post EU exit. Progress on developing long-term regulatory strategies post-EU Exit has been slow, and the future direction of UK regulation still unclear.
There are particular shortages of vets to monitor food safety and animal welfare in abattoirs and toxicologists to assess food risks and chemical safety, and lawyers and economists to enforce competition law. All these increase risks for UK consumers. If new requirements on all three regulators (along with the rest of government) to make headcount reductions of up to 40% are carried out it will “make the current regulatory models unsustainable” without “legislative change and fundamental reform”.
The Committee finds that there are opportunities from adopting more agile regulatory approaches outside of the EU that could deliver benefits in driving innovation and growth. But “the loss of access to EU systems and lack of progress in taking forward the regulatory cooperation provisions set out in the Trade and Cooperation Agreement” – despite the regulators’ willingness to do so – is increasing regulatory risks and costs.
Regulatory divergence between the EU and UK, and within the UK internal market offers opportunities but may make regulation less efficient and more costly for regulators, consumers, and businesses, depending on the approach taken. There is a risk that these costs could have a disproportionate impact on smaller businesses which are least able to afford them.
Dame Meg Hillier MP, Chair of the Public Accounts Committee, said: “Six years after the Brexit vote and with key international trade agreements still dangling years out of sight, repeated delays to implementing a new import regime continue to impact British businesses and increase risks for consumers. The effects of potential headcount reductions of up to 40% across government are unclear but, if implemented, would make current regulatory models unsustainable without fundamental reform including changes to legislation.
“Government’s poor preparation and planning have combined with international political realities and the result is exposure of UK consumers and businesses to greater risks and costs. Regulators and policy departments should now identify the impact of potential cuts on regulatory risk and set out where significant changes in the regulatory model would be needed to mitigate them. The regulators should work together on ways to address the loss of regulatory cooperation arrangements with the EU, and in six months we expect a progress report on how the arrangements set out in the Trade and Cooperation Agreement are being taken forward.”
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