U.K. Promises Not to Torch EU Regulation in Post-Brexit Britain

(Bloomberg) -- Brexit Secretary David Davis will reassure the European Union that the U.K. won't try to undercut the bloc by tearing up regulations after the split, making the case for mutual trust between regulators on each side.

“Mutual recognition” of regulatory standards should continue after the divorce, Davis will say in a speech in Vienna on Tuesday. Cars manufactured and approved for sale on one side of the channel should still be approved for sale on the other, according to excerpts released by his office.

“A crucial part of any such agreement is the ability for both sides to trust each other's regulations and the institutions that enforce them.” Davis will say. “Such mutual recognition will naturally require close, even-handed cooperation between these authorities and a common set of principles to guide them.”

Davis's words are the clearest statement yet of how closely the U.K. wants to remain aligned with the EU after the divorce, in a bid to maintain the best possible access to Europe's single market for U.K. companies.

His comments address one of the main concerns the EU has about Brexit -- that once outside the bloc, Britain will slash regulations and taxes to make its companies more competitive in the global marketplace.

High Standards

“The certainty that Britain's plan, its blueprint for life outside of Europe, is a race to the top in global standards, not a regression from the high standards we have now, can provide the basis of the trust that means that Britain's regulators and institutions can continue to be recognized,” he will say.

EU chief negotiator Michel Barnier has often spoken of concerns about a race to the bottom on environmental, social, and labor legislation, and has said that if Britain indulges in such practices, the European Parliament might refuse to approve a trade deal.

Davis name-checked workers' rights, financial stability, animal welfare and the environment. His speech is part of a series by senior ministers before Theresa May is due to set out her vision of post-Brexit economic ties next week.

While the Cabinet has yet to decide on the blueprint, officials say the plan will involve staying close to EU rules in some areas while breaking free in others. The risk is that the EU rejects the approach as an attempt to cherry-pick the best bits of EU membership.

To contact the reporter on this story: Emma Ross-Thomas in London at erossthomas@bloomberg.net.

To contact the editors responsible for this story: Heather Harris at hharris5@bloomberg.net, Flavia Krause-Jackson, Stuart Biggs

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