UK markets closed

Why a no-deal Brexit means more bureaucracy for toy and electrical makers

Tom Belger
Finance and policy reporter
Trade representatives speak during the Toy Fair 2015 in central London. Photo: Leon Neal/AFP/Getty Images

When Britain went to the polls in the EU referendum three years ago, leading voices in the Leave campaign promised freedom from Brussels bureaucracy.

But a new report suggests many UK manufacturers could now face twice as much bureaucracy over product safety if Britain leaves the EU without a deal.

Producers of certain toys, electrical equipment, and medical devices currently have to add the ‘CE’ mark to show they meet European standards and sometimes face external safety tests.

Some manufacturers could be forced to comply with two different sets of standards and add two different safety marks to products under a no-deal Brexit — even though the standards may be virtually identical.

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A report compiled for MPs by the House of Commons Library this month sets out the potential new hurdles faced by companies if Britain leaves without a Brexit agreement on 31 October.

It warns “hundreds of thousands” of products could be affected, with many firms facing two new separate hurdles to continue exporting abroad and to sell at home.

Several of the frontrunners to be the next Conservative leader and UK prime minister have said they would be more prepared than the current government to lead Britain into a no-deal Brexit.

What are the current EU rules and what is the CE mark?

The EU’s current ‘CE’ mark system helps the “free circulation of potentially highly sensitive goods while ensuring public safety” across Europe, according to the report.

Regulated sectors include toys, medical devices, energy, transport, construction materials, and electrical equipment and machinery.

Some manufacturers can self-certify that products meet required standards, but others have to apply to accredited organisations that check over their products.

How would no-deal affect firms exporting to the EU?

Lorries arrive at the Port of Dover. Photo: Reuters/Peter Nicholls

The EU has said it would stop allowing UK-based organisations to run safety checks on many goods if Britain leaves without a deal.

Many manufacturers would then face the headache of finding and enrolling with different organisations, based in the EU, to keep exporting to its member states from 31 October.

Large numbers of medical device makers would be affected, as almost half of all medical products approved in the EU are currently tested by Britain-based firms.

Some large UK-based organisations have contingency plans to swiftly register their business abroad in a no-deal scenario to avoid any problems, but manufacturers have been encouraged to make sure they are prepared.

What would no-deal mean for firms selling in the UK?

British firms could face an additional hurdle if they sell in both Britain and the EU.

Not only will the EU not recognise UK accreditation any longer, but the UK will also ultimately stop recognising EU accreditation. So they would need to pass two sets of similar or even identical standards.

That means firms could end up no longer able to keep using the European CE mark to show products are safe enough to be sold in the UK.

The UK government has announced a new ‘UK Conformity Assessed,’ or ‘UKCA,’ mark for certain products placed on the market in Britain under a no-deal exit.

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Many British-based organisations that currently run safety checks for goods sold across Europe would probably keep trading, but would offer UK-only safety checks instead.

“Some goods made in the UK and exported to the EU may have to be stamped with two marks: a CE mark for EU markets and a UKCA mark for the UK,” according to the report.

“For some products that could also mean two sets of tests, as the EU may not recognise ones done by UK organisations.”

How difficult could it be for business?

If Britain negotiates a deal with Brussels before leaving the bloc, the current rules on product safety may remain the same or at least similar to the status quo.

The UK government has also said it would continue to allow products in Britain to carry the CE mark rather than the new UKCA one in a no-deal scenario, but only for a time-limited period.

It has not made clear how long this will be, and some firms would still need new accreditation to keep their CE mark from an EU-based organisation.

The manufacturers’ organisation Make UK has previously warned of the costs of the changeover.

Make UK chief executive Stephen Phipson told the BBC thousands of firms would have to spend “millions of pounds” collectively in a short space of time to deal with the changes.

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