When the government announced this year it would indefinitely delay plans to force UK companies to adopt a new post-Brexit quality mark, the UKCA, Simon Blackham, of the insulation maker Recticel, was delighted. “Yes! An outbreak of common sense,” he recalls thinking.
His joy was short-lived, however. It quickly emerged that the government’s change of heart did not apply to construction products, such as the insulation panels Recticel manufactures in Stoke-on-Trent.
Within the next 18 months, the Belgian-owned firm expects to have to spend about £400,000 in the UK retesting its products to comply with the new regime.
It is an increasingly common story: three years on from Brexit, as the government celebrates leaving the EU’s complex regulatory regime, many firms are finding the practicalities of this “divergence” costly and confusing – and business groups say that it is going to get worse.
Chemicals are another case in point. Since January 2020, the UK has failed to ban 36 pesticides that are not allowed for use in the EU.
Blackham wearily explains that construction products are overseen by Michael Gove’s housing ministry, not the Business and Trade department which issued that statement back in August, saying the government would continue to recognise the EU’s CE mark for many products.
Gove’s department has opted instead to press ahead with replacing the CE mark with the UKCA, for all construction products sold in the UK from June 2025.
This new mark incorporates the same standards as the EU version – but only UK-accredited testing facilities will be able to validate it.
Blackham, Recticel’s senior technical manager in the UK, explains that means everything will need to be retested, by a UK-based lab. In Recticel’s case, he says, this would have to be done for eight products, at a cost of approximately £35,000 each. The firm will also have to repeat fire testing, at about £14,000 a product.
“It’s the same standards, to the same test method, the same everything – and it would have to be paid for, ultimately by the customer, for us to retest material to a test that we already have, to a standard we’ve already done it to,” he says.
The firm has not yet made the final decision to go ahead, in the hope that, as in so many areas relating to post-Brexit regulation, the government – or its successor – could change its mind.
“Where we are at the moment is that we’re still waiting, still hoping that there is a chink of common sense on the horizon,” he says. But with testing capacity in the UK limited, they will to have to take the plunge soon.
A spokesperson for the Department for Levelling Up, Housing and Communities confirmed that the intention was not to recognise the CE mark from June 2025, but added, “we are reforming the UK’s construction product regime, and we recognise the need to provide certainty for the sector. We are carefully considering the recommendations put forward by independent reviewers and will set out next steps in due course.”
Simon Storer, chief executive of the Insulation Manufacturers Association, says the challenges faced by Recticel are being replicated at many other firms. “The unintended consequences are significant and incredibly damaging,” he says. “Most of the companies in my sector are European-owned, and they don’t want to produce a product to a different standard than the one they do in mainland Europe.”
He adds that there are concerns about whether there is testing capacity in the UK to underpin the new regime. “I understand that there are some products that there is no test in the UK for – therefore in theory they will not be eligible to be placed on the UK market. That is the seriousness of it.”
In one sense, the experience of the construction products industry is an exception. The decision to stick with CE marking for most sectors fitted a broader push by Rishi Sunak’s government to quietly smooth over trade frictions with the EU – by negotiating the Windsor Framework governing trade with Northern Ireland, and rejoining the Horizon scientific community, for example.
Plans to impose border checks on goods coming into the UK have been repeatedly delayed – though are now due to come into force next month.
“Active divergence has more or less stopped,” says Joël Reland, who tracks regulatory changes at the thinktank UK in a Changing Europe.
He says the cost of living crisis has meant bashing Brussels is no longer seen as good politics. “What voters care about is the economy and inflation, and if you want to boost growth and control inflation, you don’t want to be pursuing much divergence because it’s disruptive to business and it potentially damages your trade.”
“We’re getting more aligned in some areas,” agrees Stephen Phipson, chief executive of the manufacturers’ group Make UK, citing the decision to rejoin the European scientific funding scheme Horizon, and the 2035 date for phasing out petrol cars, which is now the same as in the EU, after Sunak pushed it back.
However, many goods exporters have already faced a battery of new tests and requirements since the trade and cooperation agreement (TCA) with the EU came into force in May 2021; and the challenge is likely to continue, as EU regulations shift over time – what Reland and his colleagues call “passive divergence”.
Peter Kersh has just retired as managing director of the Yorkshire-based fish food maker WorldFeeds, which supplies aquariums and fish farms in more than 40 countries.
After the TCA rewrote the rules of trade with Europe, it took the firm a year before it could find a way of dealing with the checks and paperwork necessary for every shipment.
Previously, they would send small consignments via “groupage,” where a logistics firm would take a mixed shipment across to the continent made up of products from many different firms.
Carriers stopped offering the service, once every crate from the UK had to be separately checked and accounted for. “When you ship food into the EU now you have to produce a health certificate, which is a laborious matter, and you have to have a vet inspection of your products on-site before they’re shipped across. So there’s all this rigmarole to go through, and it’s costly,” Kersh says.
WorldFeeds ultimately found a solution – sending a full load to a single EU client, who then ships individual orders on to other customers. “So we’ve managed to kind of get our marketplace back. But it took a year to sort out and it’s added 30% to the cost of the product,” Kersh says.
“Our customers have been very loyal to us: it’s a very special brand, it’s the best fish food in the world and people like it. But of course you can only stretch a piece of elastic so far, and they won’t wait because they’ve got to feed their fish. So we’ve been massively prejudiced by this. And it’s just really sad.”
And like many respondents to the British Chamber of Commerce’s annual survey on the TCA earlier this month, he says that the gap between UK and EU regulation is likely to widen, as the EU’s rules shift and the UK struggles to keep up, even if it wants to.
“Food is hugely regulated. It gets into ingredients that you can and can’t use: so they could ban an ingredient in the EU that we’re still using in the UK, which means you’re going to have two separate products now, because you can’t sell the same one.”
Perhaps because of barriers such as these, the independent Office for Budget Responsibility has suggested goods trade has been hit harder by Brexit than services exports, which have performed in line with other G7 countries.
Labour has promised to align the UK more closely with EU rules – seeking new agreements on veterinary standards, for example, and mutual recognition of professional standards. But such changes appear unlikely to tackle the broader issue of the EU’s regulatory system drifting further away from the UK’s, as rules are updated over time.
“We are starting to get out of step,” says Phipson. “We don’t have the regulatory capacity to keep up: it’s not intentional but we’re lagging behind.”
