After Brexit the Tories still cannot escape EU red tape

The writer is an FT contributing editor

I had hoped never again to write about the lawnmower directive. Sad to say, three decades after the EU set a common standard for motorised grass-cutters and six years after the Brexit vote, Tory Eurosceptics have still not grasped that Britain cannot simply play the international game by its own rules.

The contest to replace Boris Johnson has scarcely been uplifting. Promising to rescue the nation, the candidates conveniently forget that the Conservatives have been in government for more than a decade. Their own prominent cabinet roles in Johnson’s disgraced administration are similarly overlooked. Instead they are reaching back to the 1980s. 

The frontrunner Liz Truss has disinterred tax-cuts-pay-for-themselves Reaganomics. Rishi Sunak trumpets Thatcherite corner-shop thrift. Neither has anything close to a strategy to remedy the nation’s deep-seated economic ills, to repair the political fractures jeopardising the future of the UK union, or to rebuild Britain’s tarnished international standing.

One thing they agree on is that the EU is still a threat. They have thrown their weight behind legislation to repudiate the Northern Ireland trade arrangements agreed in the Brexit treaty with the EU. This promises a further souring of relations with Britain’s neighbours and to undermine its reputation as a reliable international partner.

The two would-be prime ministers are also promising a “bonfire” of those EU regulations retained in UK law. The government has counted more than 2,400 pieces of EU-derived legislation still on the statute book. Sweep them away, the contenders say, and, hey presto, Britain will return to the sunlit uplands of economic growth.

Sunak pledges that: “I would go further and faster in using the freedoms Brexit has given us to cut the mass of EU regulations and bureaucracy holding back our growth.” Truss is not to be outdone: “EU regulations hinder our businesses . . . I will seize the chance to diverge from outdated EU law and frameworks and capitalise on the opportunities we have.”

Both overlook the government’s own estimate that scrapping the EU regulatory regime for the chemicals industry in favour of a UK-only version is likely to cost business some £2bn. This the bill for just one industrial sector. Companies across the economy will now be told to stump up for the cost of replacing EU rules with homegrown red tape. All to no purpose save mollifying hardline Brexiters on the Tory backbenches.

Which takes us back to that ban on noisy lawnmowers. The regulation became a cause célèbre for the then relatively small band of Tory Eurosceptics who railed against the Maastricht treaty during the 1990s. Even some pro-Europeans were initially mystified as to why Brussels should delve so deeply into the nooks and crannies of national life.

Douglas Hurd, the foreign secretary, ordered an investigation. Far from being an example of EU over-reach, the directive had been a British initiative. Environmentally-conscious Germany had kept out British-made lawnmowers citing “noise pollution”. By persuading Brussels to set a relatively high decibel ceiling, Britain opened up the market. The same Whitehall strategy, incidentally, led to EU legislation on motorcycle engines.

There should have been nothing surprising here. As a champion of the single market, Margaret Thatcher accepted that joint regulation was the best route to trade liberalisation. When British (or for that matter French or German) companies faced sales barriers in other EU markets, they petitioned governments to press for EU rules.

Truss and Sunak are right of course that Brexit means they can now tear up all these regulations. But they are wholly mistaken in suggesting Britain can escape them. UK businesses in effect will have to pay twice. Even as they stump up for a new panoply of national regulation and oversight, companies that operate in the EU will also have to continue to meet the standards set by Brussels. Call it a double-whammy of UK and EU regulation.

The uncomfortable truth is that Brexit turned Britain from a rulemaker into a rule-taker. The new prime minister can certainly scrap EU-derived legislation. Doubtless there are a handful of rules that could usefully be disposed of. But mostly, business will pay a heavy price. Whether it is lawnmowers or chemicals, the EU will continue to decide what can be sold in the single market. Britain’s economy is sliding towards recession. Strange then, that the two candidates for the premiership are promising to give it another shove in the same direction.