Recommendation 5

Regulatory divergence between the UK and the EU and within the UK internal market risks increasing costs for businesses, but also offers opportunities depending on the approach taken. Following EU Exit there is already some divergence in regulatory approach between the UK and EU. For example, the EU recently banned titanium dioxide as a food additive, while the UK has not introduced a ban and FSA is carrying out its own risk assessment. There will also be divergence because regulatory decisions are made at different times and will take into consideration UK risk profiles and usage, for example, in the authorisation of specific chemicals or regulated food products. Outside the EU single market, there is also greater scope for England, Wales and Scotland to reach different regulatory decisions in areas of devolved competence. The regulators are working with the Regulating after EU Exit 7 devolved administrations under a set of ‘common frameworks’ to reach an agreed way forward where possible and coordinate the timing of regulatory decisions and their implementation. However, in areas like gene editing for example, it is not yet clear whether a common approach will be agreed. There is a risk that over time regulatory divergence (both between the UK and the EU and between the four nations of the UK) may lead to increased costs for business and consumers through administrative burden and regulatory costs. We are concerned that these costs may have a disproportionate impact on smaller businesses. Recommendation: The regulators should put in place robust monitoring to keep track of regulatory divergence and its implications, particularly for small businesses.