𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

The Government has been told to ditch its plan to realign with the EU as it could blow a huge £15billion hole in the economy,according to a think tank. The Growth Commission – comprised of 13 independent economists – said Rachel Reeves and Sir Keir Starmer should abandon proposals to align British Sanitary and Phytosanitary (SPS) with the bloc’s regulations.

So-called “dynamic alignment” is set to see Britain match Brussels’ regulations on food, animal and plant health and pesticides. Its Chairman, Shanker Singham, said: “Hardwiring into UK law SPS regulations which are already costing EU economies dear would be a monumental act of self-harm that would be extremely difficult to reverse given how supply chains get locked in over time.

“The European regulatory system is one of the most anti-competitive and growth-destroying regulatory systems in the world, which has led to stagnant growth across the continent.

“With a pressing need to grow its economy, the last thing a country like the UK should be doing is aligning to European regulations.”

He added that there are two competing models of the global trading system, and Britain risks picking the wrong one.

Mr Singham said: “The first model sees regulatory competition with equivalence and mutual recognition when it to comes to regulations. That’s the classic system embodied by the U.S., the World Trade Organisation and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

“The second model is that favoured by China and the EU, which demands harmonisation of regulations at the most restrictive level, making market access dependent on replicating regulations.

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“If the UK goes down the route of aligning its SPS regulations with the EU, it would be embracing the second of those models, effectively ceding power over British rules to the EU and causing a colossal hit to the British economy.”

The expert also suggests that growing closer with the EU would harm the UK’s relationship with the US, and disputed the argument that turning to Brussels would mean more frictionless trade with Europe.

The think tank’s models “demonstrate how the lack of competition in domestic regulation has a huge economic impact,” Mr Singham said.

He added: “It would be madness now to hand back control of our regulations to Brussels, thereby preventing future gains from adopting pro-competitive regulation and significantly damaging the UK’s external trade policy because much of that trade policy is dependent on a country’s domestic regulatory settings.”