Full speed ahead on SPS alignment

Joël Reland considers why the UK government’s announcement of the EU legislation ‘in scope’ for the UK-EU ‘SPS’ deal is significant, both for UK businesses and politically. 

This week the government published a list of EU legislation ‘in scope’ for the UK-EU ‘SPS’ deal. Translated into normal English, that is the list of EU laws which the UK will have to adopt in order to cut red tape on trade in animal and plant goods.

What have we learnt from this announcement? On a technical level, we now know that there are at least 76 pieces of EU legislation with which the UK will align, covering areas ranging from animal health, welfare and hygiene to food marketing rules and additive and pesticide restrictions.

But, stepping back from the legal minutiae, the statement sends an interesting political signal about just how keen the UK government is to get the SPS deal done. Two aspects in particular stand out.

First, there is the unfussy manner in which the government accepts the need for alignment. Most UK announcements about any form of closer cooperation with the EU are couched in obfuscatory language about ‘sovereign decisions’, value for money, and keeping matters under review. It often takes a deep dive into the supplementary annexes to properly understand what is going on.

Not so here. The press release essentially says: we want to cut red tape for importers and exporters; here are the EU rules that we need to align with to do that. The two sides continue to negotiate on a few limited cases where the UK may be exempted from alignment (namely some rules on genetic editing and animal welfare) – but the vast bulk of relevant EU law will be accepted without further scruples.

Second, the statement is clearly designed to get firms started on the process of adaptation. Normally, businesses would only learn of the outcome of a negotiation once the final, agreed text is published. This announcement is in effect a way of giving them advance sight of the deal – including guidance on what specific sectors need to do – so they can begin preparations for the new regime while the final details are haggled over.

There seems to be a concerted effort to avoid the errors of Brexit past, where the implementation of various new regimes was hampered by a lack of clear messaging about the way ahead and, therefore, a lack of preparedness on the business side.

This uncharacteristic assertiveness from a regime renowned for its caution tells us of the growing importance which EU policy plays in the government’s wider economic agenda. Last month, the Chancellor publicly stated her desire to make a “political argument” about the economic benefits of a closer EU relationship – making the implications of the ‘EU reset’ policy more explicit. Her argument – that “economic gravity is reality, and almost half of our trade is the EU” making better EU trade the “biggest prize” for the economy – is not something you would have heard a year ago.

But the government needs evidence to make that case, and this is why the SPS deal seems so prized. There is a tangible, everyday quality to the agreement which other deals on carbon pricing and electricity price auctions do not have, allowing the government to tell a clear story about how closer ties to Brussels can bring economic benefits at home – in terms of lower food prices for consumers and export opportunities for British fishers, farmers and small businesses.

It is telling that it the SPS deal is the only bit of business emanating from last year’s UK-EU summit for which the government has set a clear target date (2027). Whether it can deliver the anticipated economic and political rewards, however, is far from certain.

After all, just because government starts telling business to get ready doesn’t mean the deal is in fact done. Some important details are still subject to negotiation, and a best-case scenario would probably see the text agreed this summer. But, even then, the UK still needs to go through the process of adopting the necessary EU legislation – the parliamentary mechanics of which take time, especially if MPs seek close scrutiny of the process.

Then there is the question of business adaptation, with farming industry groups already arguing that a transition period may be necessary given the scale of divergence in UK-EU rules in areas like pesticides. The government says that most sectors should experience ‘minor or minimal’ change, but it will consider ‘targeted transitional arrangements’ for the most-affected – potentially adding many months before the deal is operating at full capacity.

An optimistic reading is that the agreement could come into full force 18-24 months before the next general election (if it takes place at the latest possible date of mid-2029). Is that enough time for voters to feel the benefits? Unlikely, given that the overall economic gains from the deal appear quite marginal, and any savings for consumers are likely to come in the form of lower food price inflation (rather than costs coming down) which will probably be blown out of the water by a spike in energy costs anyway.

The government is to be credited for being clear with industry about the way ahead on the SPS deal. Early and consistent messaging will be essential for a speedy adaptation process. But for it to win the “political” argument about the benefits of closer EU ties, it will probably need to set its ambitions a lot higher.

By Joël Reland, Senior Researcher, UK in a Changing Europe.