A survey of 23 industries indicated the vast majority of sectors would still prefer ongoing alignment with EU regulations.
Carolyn Fairbairn, the CBI Director-General, warned there was no desire on the part of the majority of British businesses to do away with EU regulations entirely ahead of Brexit negotiations on the future EU-UK trade deal.
She said: “It’s vitally important that negotiators understand the complexity of rules and the effects that even the smallest of changes can have.
“Deviation from rules in one sector will have a knock-on effect on businesses in others, and divergence from rules in one part of a production process will have consequences for market access throughout entire supply chains.
“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.”
The CBI’s report, named Smooth Operations, however suggested that tourism, shipping and agriculture could benefit from reduced EU regulations, but stressed that this would be outweighed by the impact on other sectors.
The report also indicated the UK could continue to have a say in key decisions on issues such as chemicals and aerospace through continued membership of EU agencies, in which non-EU nations such as Turkey currently participate.
The report has been rejected by many Brexiteers, who said it failed to acknowledge the many benefits that decreased European regulations would have on the UK economy.
Richard Tice, co-Chair of Leave Means Leave, said: “This report from the CBI protects the vested interests of global multi-nationals at the expense of the approximately 90% of the UK economy that does not export to the EU.
“It is quite extraordinary that this business lobby group wants to keep a load of unnecessary EU regulations that stifle growth and innovation, which will thus reduce wage growth potential for UK workers.”
This however comes at a time when Michel Barnier has stated that a post-Brexit free-trade deal could be derailed if Theresa May does not sign a ‘non-regression clause’ forcing the UK to match EU regulations.
The European Union’s Chief Brexit negotiator stated such a clause would provide reassurances to the EU members states that the UK was not trying to undercut EU standards in regards to tax, environment, and health.
The French politician also warned that if Theresa May were to reject the clause, EU member states are likely to reject any future free trade deal between the UK and the EU following Brexit.
Mr Barnier said: “There will be no ambitious partnership without common ground on fair competition, state aid, guarantees against tax dumping and social standards and, not least, environmental standards.
“The agreement on the future relationship with the UK should include a non-regression clause.
“We face a huge risk of ratification from national parliaments if we don’t reassure people and provide a solution.
“If we want to build a strong partnership we need to be very careful at every step.
“No one must underestimate the difficulty.”
The Commission’s demand for the UK to uphold European regulation post-Brexit in order to achieve a free-trade deal places Theresa May’s government in a dilemma, as one of the Tory’s principal reasons for leaving the bloc was to free itself from restrictive EU red tape.
April 11th, 2018: Express