Regulations and their divergences are a fact of modern economic life. Right-wing governments like the current Conservative-majority in Westminster traditionally portray themselves as anti-regulation. The EU can therefore be easily presented as an opposition figure: pre-Brexit, it was The Regulator – a Grand-Nanny state if you will – bearing down via Brussels like a bureaucratic raincloud to impose rules and regulations and minimum standards on the UK. The proliferation of red tape that has sprung up since Brexit 'got done’ is therefore rich in irony.
To continue doing business with our nearest neighbours, which is necessary for many British businesses, goods and services coming from the UK must meet EU regulatory standards. But without EU membership – which indicates that goods and services moving between member states are of a shared standard – more checks are being made to ensure that British goods are up to scratch. This has led to two main outcomes for British businesses: disruption, and limbo.
We have already seen burgeoning border-chaos, supermarket shortages, small businesses suffocating under the weight of navigating new regulations, and the British fishing industry essentially brought to its knees. No part of trade or border crossing is free from disruption – think of the infamous video of a Dutch border guard confiscating a sandwich from a driver because POAO (products of an animal origin) can no longer be transported from the UK to Europe. “Welcome to the Brexit,” indeed. However, where some businesses are struggling to function as normal – or indeed to function at all – others are suspended in a curious limbo.
The financial services industry is one such case. There are concerns that the bloc will look to reduce reliance on the City of London to create its own autonomy from the UK post-Brexit. With only a thin section on financial services in the Brexit agreement, and a memorandum of agreement yet to be reached, many questions remain. Will there be equivalence between the UK and EU? How can a heavily regulated industry trade smoothly with Europe when they must comply with state-by-state regulations? Will the sector retain its international standing post-Brexit? It is no wonder that financial services professionals, leaders of the City of London, and even the Mayor of London himself are sounding the alarm and calling on the UK government to tread carefully in its quest for regulatory autonomy.
This poses both ideological and practical problems for Brexiteers, and those tasked with delivering it. A movement which positioned the EU exit as freedom from pesky continental constraints has seen businesses lose control that they were promised would be taken back. More practically, the Conservative government must tread a fine line of pursuing regulatory autonomy while allowing British businesses to trade and function at pace. Westminster must recognise that unpicking the ties that bound the UK to its closest neighbour for nearly 50 years is a delicate process.
It is a bold enough statement that Britain has separated from the bloc. If Government pursues further deregulation in the name of ideology and autonomy – divergence for divergence’s sake – then businesses and individuals will suffer. They also risk devaluing and diminishing the respect that is held for British industry and working standards around the world. Surely ‘taking back control’ means optimising existing processes to the advantage of the whole of the UK and shaping a ‘global Britain’ which can continue to be held in internationally high regard – not knocking down regulations like a British bulldog in a china shop and risking economic and common good in the process.
Put simply: if it ain’t broke, don’t fix it.