The limits of dynamic alignment

Joël Reland argues that the UK government’s plans for closer EU alignment may prove more difficult than anticipated.

The government is sending ever stronger signals about its plans for closer alignment with the EU. At the start of the month, the Prime Minister promised that this summer’s UK-EU summit “will not just ratify existing commitments made at last year’s summit” but “be more ambitious” in seeking “closer economic cooperation” with the EU.

Then, last weekend, briefing emerged which suggests that a forthcoming bill could grant ministers powers to adopt EU law in a range of sectors much wider than those where the UK committed to alignment at last year’s summit.

But there remains a curious disconnect between the government’s ever-bolder rhetoric on alignment, and its actions. Our new divergence tracker shows that, in many of the areas where the government has previously expressed in interest in closer alignment – like chemicals, products and vehicles – it is doing little to close regulatory gaps.

Take chemicals, where a new ‘PFAS’ plan (seeking to address the widespread presence of harmful, long-lasting ‘PFAS’ substances in everyday goods) is strikingly less ambitious than the EU’s. The EU has restricted the presence of PFAS in items including toys, food packaging, consumer textiles, cosmetics and some firefighting foams. The UK plan proposes only one consultation (on firefighting foams).

Meanwhile, a recent piece of legislation ends the ‘automatic’ requirement for the Health and Safety Executive (HSE) to consider all hazard opinions published by the European Chemicals Agency – which could exacerbate existing gaps on substance restrictions.

On product safety, last year the government gave itself powers to replicate EU rule changes under the Product Regulation and Metrology Act (PRMA), yet those powers have only been exercised once – to mirror EU rules on noise emissions testing for outdoor equipment. The government says that this avoids ‘unnecessary divergence’ in product standards which ‘could negatively impact on growth’ – which begs the question of why they have not sought to align in the many, many other areas of divergence (on everything from toy safety and online marketplaces to charger types and vehicle emission testing) that could have similar effects.

What explains this inaction? It does not seem to be for want of trying – the government bothered to pass the PRMA after all. Rather, it seems to be down to a lack of anticipation about the practical difficulties. The UK seemed to initially think that ‘voluntary’ alignment – where it unilaterally mirrors EU rule changes – was a stealthy way to plug regulatory gaps without inviting charges of becoming a rule taker. But it is in fact proving a Sisyphean task.

In any given sector, the UK simply does not have the administrative capacity to keep pace with all EU rule changes. The EU is a well-oiled administrative machine which has been doing this work for over half a century. It has a large bureaucracy and suite of regulators to oversee reforms.

The UK, by contrast, will have only a few officials in a range of different departments tracking EU legislative developments. That is enough to spot some of the most critical reforms on the horizon, and perhaps belatedly initiate a handful of pieces of mirror legislation – but nothing more. What’s more, voluntary alignment does not remove any of the trading red tape which Brexit created – it only avoids the creation of additional frictions over time.

The government seems to have belatedly realised this, and instead alighted on ‘dynamic alignment’ as an alternative. Under this model, as per the SPS deal, the UK explicitly becomes a ‘rule taker’ – obliged to adhere to more or less the full gamut of EU law in the sector in question (including as it evolves over time) – and in return most of the Brexit-induced red tape is wiped away.

But this, too, risks being another unsatisfactory halfway house. Practically, the UK will need to do a lot of work to implement EU legislation and then maintain dynamic alignment in future. The UK must, from scratch, build significant institutional capacity to implement large swathes of EU law which it has not kept pace with, and then ensure future updates are promptly adopted.

Alignment is a job for life. Even states like Norway, which have been doing it for decades, can find it challenging – ending up with backlogs that can antagonise relations. The struggles which the UK has had in implementing even basic voluntary alignment suggests that it is far from ready for the job.

And politically, there are clear limits to how far the EU will let the UK ‘cherry pick’ the parts of the EU market to which it can dynamically align. The current set of deals under negotiation will add only a fraction of a percent to GDP by 2040, and there are very few other areas where the EU will be open to alignment, unless and until the UK accepts free movement of people and payments into the EU budget – as the precedent of Switzerland demands.

The government may soon come to find that dynamic alignment is another red herring in its attempts to offset the costs of Brexit: a high-effort, low-reward strategy which consumes a lot of administrative bandwidth while barely moving the economic dial.

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