The Brexit effect – institutional inheritance and adaptation

Reported by: Alex Kell EPSRC-funded Policy Intern (September - December 2019)

Withdrawing from the European Union presents a challenge for the United Kingdom’s evolving system of public administration. UK agencies will have to perform roles which were previously the responsibility of EU agencies. And if Brexit occurs suddenly, the challenge of rapidly adjusting the regulatory environment will become even more difficult.

Against this backdrop, CSaP organised a roundtable discussion with Professor Kenneth Armstrong, Professor of European Law, and his Leverhulme Trust Major Research Fellowship. The discussion, which brought together regulatory experts, senior policy makers and leading academics in the field, explored the challenges and choice points that Brexit poses from the viewpoint of regulatory agencies.

Can UK regulatory agencies attract and retain the talent required? With whom should the UK align on an international level? And how will UK regulatory agencies adapt to the changing pressures and environment? These were all questions that were raised and explored during the workshop.

It was pointed out that implementing policy is inherently difficult, and this will not change after Brexit. Tensions such as how to manage consumer versus producer interests and how regulation interacts with actors in the economy may become a greater responsibility for the UK government.

Brexit provides an opportunity to influence the regulatory environment in an international context and raises multiple choice points. For example, on an international level, the UK may decide to align with the USA on matters such as financial services, data and privacy. For the automotive sector, the UK may find it more appropriate to align with the EU. Participants discussed that the fact economic operators will have to make binary choices between which regulatory standards to follow may increase costs and remove a competitive advantage.

Participants discussed how Brexit had forced regulators to dedicate a large proportion of their resources to managing and preparing for Brexit. Although regulators feel that they are able to manage these impacts, the space and time for deeper thinking on the regulatory environment and policy risks being overshadowed.

One of the potential attractions of Brexit was the idea that the UK could deliver a flourishing economy without the burdensome rules and regulations of the EU. However, it was noted that the systematic approach to delivering this promise remained unclear.

Participants also discussed how businesses favour regulatory stability, which the EU has been able to provide. After Brexit, it may become challenging to provide stability due to internal and external political pressures. These political pressures may cause a changing regulatory environment, which may have a complex cumulative impact on small business owners.