Tuesday 1 August 2023

UKCA: a symbol of the folly of Brexit

I said that I would break the ‘summer recess’ of this blog if a Brexit event of sufficient interest or importance occurred and it has, with the government’s announcement today of an “indefinite extension to the use of CE [Conformité Européenne] marking for British businesses”. It sounds dull enough to make you weep, but, actually, both in and of itself and as an illustrative case, it blows a huge hole in the entire case for Brexit. So it should be a cause for weeping, though not tears of boredom but, first, tears of laughter at the utter farce of what has happened and, then, tears of rage at what it means.

A brief history of UKCA

The origins of this saga go right back to 2019 (£), when the government began to plan for a ‘no deal Brexit’ and realized that one consequence would be for the use of CE conformity assessment marking of products. This is the system whereby many types of goods offered for sale in the EU single market must bear a mark showing conformity to EU safety, health and environmental standards. Crucially, this isn’t just about placing a mark on the product or its packaging, but about registering, at a cost, the evidence that the product actually does meet the relevant standards via a ‘notified body’ within an EU member state (although in some cases self-declaration is possible).

In the face of a possible ‘no deal Brexit’, the government announced that, were it to happen, the CE mark could and would go on being used in the UK until, at some unspecified point, being replaced by a UK system, of an unspecified nature. In the event, ‘no deal Brexit’ was averted, both in the original sense of leaving without a Withdrawal Agreement and the later sense of leaving without a trade agreement. However, in line with the Johnson-Frost ‘sovereignty first’ Brexit, it was still intended that the UK would have what by that time we knew would be called the United Kingdom Conformity Assessed (UKCA) system. During the Trade and Cooperation Agreement (TCA) talks, the UK sought a ‘mutual recognition agreement’ as between CE and UKCA systems, but this proved impossible.

At the time the TCA was struck, so much attention was focused on the issue of post-Brexit terms of trade, not to mention on the still-raging pandemic, that what UKCA was going to mean was scarcely recognized outside those businesses affected by it, and not always even by them. But once the transition period ended, and the TCA dust settled, it became clear that manufacturers were going to face dual systems of conformity assessment. I think that this was the first time I mentioned what I called this “especially absurd consequence of Brexit” on this blog, and I have returned to it several times in the years since.

The absurdity was that, at least initially, the actual standards to which conformity would be assessed were in almost all cases identical. So a firm selling identical goods in both Great Britain (GB) and the EU would have to mark them differently, and register their conformity assessment separately. For British exporters this represented costly duplication, which was especially onerous for small firms but no less real for big firms, and created a disincentive to serve both markets. Equally, overseas firms (not only, but including, those of the EU) exporting goods to Britain faced the new costs of UKCA, thus potentially increasing prices or, especially if their UK market was quite small, simply not offering their goods for sale here, thus potentially reducing consumer choice. The situation was even more nightmarish in Northern Ireland where, as discussed in an August 2021 post, the CE mark would continue to be used because it effectively remains in the EU single market for goods, in some cases alongside a new UKNI mark (but not if the good was bound for the EU), but goods made in Northern Ireland that were bound for GB would need the UKCA mark.  

Unsurprisingly, at least to anyone who understood it, the introduction of compulsory UKCA marking has been repeatedly postponed from what was initially going to be January 2022, reflecting both the time and effort needed from businesses as well as persistent lack of governmental clarity about how it would operate, and also the lack of registration capacity. Meanwhile, in February 2022, even Jacob Rees-Mogg seemed to have grasped the ludicrous burden of extra ‘red tape’ it required, although the government continued to insist that it was on course for implementation, at that point in January 2023. Subsequently, in November 2022, that date was extended to January 2025.*

What does the new announcement mean?

It is that latter deadline which has now been indefinitely postponed, with the CE mark now being indefinitely valid for firms to place goods for sale on the UK market (including Northern Ireland), as well as in the EU single market. This doesn’t mean the end of the UKCA mark. Companies can still use it to place goods on the GB market (but not Northern Ireland or the EU) if they are confident that they only sell in GB and are only going to sell in GB. Some such firms, especially if they have already made the transition, may well do so. However, even for these, there must now be a question mark as to the extent to which consumers will recognize and be convinced by what will surely be a minority usage. Moreover, these firms may find that their goods are unacceptable when offered to other UK firms as components in finished goods destined for the EU or Northern Ireland.

I suggested in May 2023 that the writing might be on the wall for UKCA once the government retreated on its plans for the wholesale scrapping of Retained EU Law (REUL). For what that seemed to presage was the abandonment of ideas for widespread divergence from EU goods product standards. This latest UKCA announcement presumably points even more strongly in the same direction since unless the UK continues to adhere to the relevant EU standards then the CE mark will not be achievable. Perhaps there will be some cases where UK standards do diverge and there, too, there will be an ongoing role for UKCA, but it hardly makes sense to tell firms that they can go on using CE marking in the UK if there is also an intention to depart extensively from EU standards.

True, that implies consistency in government policy where there has been little so far. For example, in June 2021, almost unnoticed, it was agreed that UK would continue to participate in CEN (the European Committee for Standardization) and CENELEC (the European Electrotechnical Committee for Standardization), which seemed to imply an intention to remain aligned with EU product standards even though the process for scrapping REUL, which began in September 2022, might have (and, some Brexiters surely hoped, did) implied otherwise.

However, although there was always a strong possibility that CE marking would continue to be valid, it would have been a brave firm which acted on this assumption, so although today’s announcement is a sensible one, in and of itself, it doesn’t obviate the fact that many firms have sent considerable amounts of money (how much will probably never be known) on what has turned out to be unnecessary. It is perfectly possible that some have even already gone out of business as a result. It is also possible that some UK firms have already decided to cease trading with EU customers, or overseas firms with UK customers, and they may or may not now seek, or be able, to revive that trade. In other words, although now abandoned, the replacement of the CE mark with the UKCA mark has already been highly costly.

In this sense, the government’s suggestion that this today’s change of policy is part of its plans to “ease business burdens” and “cut red tape” shows extraordinary chutzpah, if not downright shamelessness. Not only has it already created costs, but to the extent it is now reducing them it is only taking away costs its own Brexit policies have created. That it made a similar suggestion when postponing introducing post-Brexit import controls, currently set to begin this October, gives cause to wonder if these, too, may once again be postponed or watered down.

The bigger picture

The bigger aspect of this fiasco is that it reveals two central features of Brexit. One is just how much unnecessary aggravation and cost has been caused by Brexit hubris and by the rush to get Brexit done. As this today’s announcement shows, it was not a necessity of Brexit to ditch CE marking and it only arose because of the hubristic desire for ‘sovereignty’ and the almost frenzied desire to expunge all traces of EU membership. And even having adopted that position, it was unnecessary and unrealistic to try to do it so quickly, which itself was part of a wider refusal to create a long, or even any meaningful, transition period.

Secondly, and more profoundly, the fact that the government has finally been forced to change policy reveals the utter vacuity of the ideas of sovereignty and regulatory divergence that inform so much of Brexit. Akin to the ‘gravity’ effect of geographical proximity on trade, there is what Professor Anu Bradford of Columbia Law School labelled the ‘Brussels Effect’ which exerts a regulatory pull on nearby, smaller, economies. That applies not just to conformity assessment but to regulation in a more general sense, and explains why, for all the Brexiters’ bombast, there has so far been fairly limited regulatory divergence and what, according to Joël Reland of the UKICE research centre, is a growing trend towards ‘managed divergence’ via UK-EU agreement.

To the extent that the continuation of CE marking implies continuing alignment on many kinds of goods standards it also shows the myth of sovereignty in the Brexiter sense: it seems that in most cases goods sold by UK firms in the UK will conform to many of the standards set by the EU, which also generally means changing as and when the EU changes those standards. Moreover, those firms will in many, perhaps most, cases require assessment to be registered via an EU-approved notified body within an EU member state.

So this is what ‘taking back control’ means in practice: almost the opposite of what it promised. The Mail has described the CE decision as a “another Brexit climbdown” by Rishi Sunak, and it is not yet clear to what extent there will be a backlash from Brexiters. Will the average leave voter care about, or even be aware of, this? Almost certainly not, and there is no reason why they should. But, by the same token, the idea that leave voters either had a burning desire for, or gave a mandate to, the scorched earth theory of sovereignty that Brexiters claimed to flow from the 2016 referendum is also ludicrous.

As for the rest of us, UKCA now stands as a literal symbol – if there is such a thing – of the waste, stupidity, hubris and sheer folly of Brexit itself. In that context, several possibilities suggest themselves for what the ‘C’ and the ‘A’ might stand for, few of which are suitable to be spelled out for younger readers.



*Note that the various deadlines referred to had some exemptions/ variations, especially as regards conformity assessment marking of medical devices. Also note that, as ever with Brexit, there are all sorts of deeper complexities, qualifications and exceptions in relation to what goods, what standards, and what forms of registration are affected. I’ve tried to skip over these by the use of various qualifiers (‘most’, ‘many’, ‘often’ etc) so as to stick to the main contours of the issue.

Updates (3 August 2023)

1. The retention of CE marking does not quite mean, as some commentators suggest, that the UK is simply a 'rule-taker' of EU standards. This is because, as mentioned in the text, the UK participates in CEN and CENELEC (and also, though not mentioned, ETSI) as a non-EEA member. As such, it (via BSI) can participate in discussions and vote, and in some very specific circumstances not adopt standards which it didn't vote for. However, it is of course the case that the UK no longer has any say in the wider policy and legislative frameworks within which and from which particular standards may derive. In any case, the sovereignty point in this specific development isn't primarily about standards, it is that it shows the impracticality of a national system of conformity assessment marking and registration.

2. Subsequent to writing this post, it emerged that neither the construction industry nor the medical devices industry were included in the announcement of indefinite postponement. In both cases, unlike the general situation where CE validity in GB was due to end at the end of 2024, these already had later deadlines (June 2025 for construction and various dates in 2028 and 2030 for medical devices). It is not clear if this discrepancy will persist, or what its rationale could be. No doubt more in future blogs.

3. As briefly pre-figured in this post, a couple of days later the government announced a further delay in introducing import controls. Crucially, this was attributed to the potential inflationary effects of doing so, a tacit admission of the extra costs of post-Brexit trade. For discussion of the import control issue, including the risks posed by postponement, see my post of April 2022. Again, no doubt there will be more in future blogs. 

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