The economy will be much better off if the UK sticks closely to EU rules rather than creating its own after Brexit, a leading business group has said.
Eighteen of 23 sectors analysed would benefit from regulations that remain aligned with Brussels, the Confederation of British Industry found.
It said the costs of divergence would “vastly outweigh” the benefits in most parts of the economy.
The CBI spoke to thousands of business leaders up and down the UK over a six-month period and found that, while there were opportunities to make beneficial new rules in sectors such as agriculture, shipping and tourism, these are limited.
In sectors such as aerospace, aviation, chemicals, financial services and technology, the majority of important regulation should remain the same in order to protect the economy and jobs, the CBI concluded.
The research found that changes to rules in one sector are likely to also have significant knock-on effects for companies in other sectors and throughout supply chains.
Where rules are fundamental to the trade or transport of goods, such as in the automotive, chemicals and life sciences sectors, remaining in lockstep with the EU is “essential”, the CBI said.
The Brexit deal should set a new international precedent for liberalising trade in services and digital products, the report says.
“The task of unpicking 40 years of economic and regulatory integration is complex and colossal,” CBI Director-General Carolyn Fairbairn said.
“It’s hard to overstate the importance of the decisions that will be taken over the next six months. Put simply, for the majority of businesses, diverging from EU rules and regulations will make them less globally competitive, and so should only be done where the evidence is clear that the benefits outweigh the costs.”
She called for a “major acceleration” in the partnership between business and government in order to make a success of Brexit.
“It’s vitally important that negotiators understand the complexity of rules and the effects that even the smallest of changes can have,” she said.