The Dead End of EU Divergence

Why the UK should align with EU Automotive Regulations

The new UK Labour Government led by Sir Keir Starmer has embarked on a welcome reset of its relations with the European Union (EU). However, the substance of the UK’s dialogue with the EU will ultimately depend on decisions to align, or diverge, from Single Market rules. This is especially true for UK car manufacturers who export nearly 60% of everything they produce to the EU. In fact, only 20% of UK car production is sold in the domestic market. The reality for car makers based in the UK is that eight of ten of the vehicles they produce must meet the regulatory requirements of the EU or other countries.1 The scope for divergence made possible by Brexit is, therefore, severely limited. Like it or not the UK is now mainly an automotive rule taker. If the British Government wants to effectively protect the interests of both its industry and consumers it must dynamically engage with automotive regulatory developments both in the EU and globally.

Systems of ‘type approval’ are commonly used worldwide to ensure that new car models meet environmental, safety, and security standards. Vehicles that are representative of a ‘type’ are physically tested to check they conform with the applied regulations. The EU’s regime now covers the entire life cycle of a vehicle from original approval to final scrappage2. It enables a manufacturer to have a new model tested once and then sold across all 27 countries in the Single Market. This reduces compliance costs and creates a level playing field of fair competition. From a consumer perspective European type approval has ensured that new cars sold in the EU now meet the most stringent safety and environmental standards in the world. At a global level the United Nations also promotes type approval standards though the World Forum for Harmonisation of Vehicle Regulations. Based at the United Nations Economic Commission for Europe (UNECE) in Geneva, the Forum enables any UN Member State to apply voluntarily a wide range of motor vehicle safety and environmental standards3.

During the referendum and in the early stages of Brexit the impression was given that the UK would remain aligned with EU regulatory best practice. In 2018 when former PM Theresa May set out her Mansion House proposals for a post-Brexit partnership, she pledged that “UK and EU regulatory standards will remain substantially similar in future”4. In the same speech May also talked up global standards as an alternative source of consumer protection. “Many of these regulatory standards” she argued, “are themselves underpinned by non-EU bodies of which we will remain a member such as the United Nations Economic Commission for Europe which sets vehicle standards”.

Unfortunately, May’s understanding of the Forum’s process was back to front. About 40 governments usually attend its meetings but with a crucial difference. The EU vote together as a block of 27 countries. Decisions in the Forum require a four-fifths majority which the EU easily obtains giving the bloc a dominant role. That is why the Forum usually adopts new UN regulations that originate in the EU. It is Europe that underpins the UN Forum - not the other way round. This is a classic example of the so-called ‘Brussels Effect’; the EU’s ability to be a regulatory superpower in global standard setting fora5. In Brussels a powerful eco-system of engagement with Member States, manufacturers, suppliers, universities and broader civil society drive the EU’s regulatory role. Since Brexit the UK is excluded from this dynamic policy and legislative process.

After leaving the EU, the UK adopted its own ‘GB Type Approval’ system on 31st December 20226. It duplicated the Single Market type approval system including all the previous regulatory requirements until UK withdrawal on 31st January 2020. Unfortunately, this state of alignment no longer applies. The previous UK Conservative Government rejected pragmatic alignment and instead looked for ‘Brexit opportunities’ despite warnings from the UK automotive industry and others against divergence7.

The first example of Brexit driven divergence has been the failure to adopt a package of vehicle safety measures now being applied to all new vehicles sold across the EU. The General Safety Regulation (GSR) was originally adopted in 2019 and entered into force on 6th July 20228. The GSR includes the phased introduction of intelligent speed assistance (ISA), autonomous emergency braking (AEB), better crash test standards, and improved truck visibility to reduce blind spots9. The package is the most significant upgrade to vehicle safety standards since the introduction of new front and side crash tests in the late 1990s and is specifically designed to improve the safety of vulnerable road users, including cyclists and pedestrians.

According to the UK’s Transport Research Laboratory the package could deliver a greater safety benefit than the introduction of seat belts. They estimate that in the UK over the next 15 years it could prevent 1,762 deaths and 15,000 injuries avoiding so much misery and pain and deliver £7 billion in net economic benefits. Which is why a cross-party group of six former road safety ministers in 2022 wrote to the Secretary of State for Transport urging him to introduce the GSR package in full adding that it is “the single most important thing you can do now to reduce deaths and injuries on UK roads”10. Rather than act on this advice the Department for Transport (DfT) delayed any decision. As a result, for the first time in 25 years the UK is falling behind the EU’s world class vehicle safety standards.

Grant Shapps

David Ward discussing the GSR with Grant Shapps, then UK Transport Secretary at a technology demo during the ITF Summit in 2022.

The GSR experience is not just bad for road safety but also damaging to industry and innovation. The failure to align with the EU will undermine UK leadership in promoting the future deployment of connected and autonomous vehicles (CAVs) which although in their infancy will eventually transform mobility as advanced vehicle safety systems become increasingly automated. For example, ISA equipped vehicles capable of reading the speed limit will be a ‘sine qua non’ for future CAV mobility and by not requiring the technology the UK will fall behind. The failure to adopt in full the GSR is like a slow puncture that will gradually deflate our safety standards and competitiveness.

It is also the case that some car makers may choose to include GSR technologies in their UK fleet even if not required to by GB type approval. This will avoid costly changes to their production line or risk their customer reputation. Many car manufacturers now want safety ratings provided by the European New Car Assessment Programme11 which since 1997 has provided a voluntary benchmark for best practice in vehicle safety. For models to be awarded the prestigious five-star rating all the GSR technologies and more besides are required. Nonetheless, some manufacturers may be tempted to switch some of their production from less well-regulated markets to the UK. Not all opt for five star Euro NCAP ratings and might see advantage in under cutting their competitors by exploiting the less rigorous safety standards now required in the UK.

Another concern is the absence of GSR technologies in commercial vehicles including vans and trucks. Euro NCAP has only recently begun testing vans12 and customer demand for safety is less developed. These results have revealed relatively poor levels of safety performance in vehicles that are disproportionately involved in fatal crashes and are also a fast-growing segment in the UK fleet13. It would clearly be beneficial, therefore, for ISA and AEB to be mandatory for vans and also trucks.

The UK previously had a proud record of promoting improved vehicle safety; for example, playing a leading role in the adoption of new EU crash test standards in the late 1990s14. These measures helped to nearly halve road deaths across the EU and the UK in the first decade of this century. Since 2010 unfortunately UK road safety has stagnated. Annually we suffer nearly 30,000 killed and seriously injured on our roads; equivalent to devastating a medium sized town every year15.

Although Sir Keir Starmer’s government has no plans to return to Single Market it is under no obligation to pursue divergence for its own sake. Hopefully, therefore, the new ministerial team led by Louise Haigh at the Department for Transport (DfT) will accept the clear evidence and arguments that support implementation of the GSR. Until this happens to be sure you are purchasing a new car that meets all the EU’s new safety requirements you need to buy it from a dealership in Northern Ireland!

Meanwhile the inevitable evolution of Single Market automotive regulations will repeatedly test the substance of the UK’s reset with the EU. In April this year new emission ‘Euro 7’ standards for cars, vans and trucks were adopted16. Currently a revision of the End-of-Life Vehicles Directive (ELVD) is under EU legislative scrutiny. Originally introduced in 2000 the ELVD needs updating to improve reusability, recyclability and recoverability of motor vehicles as part of a wider EU strategy to boost the circular economy17. In each of these cases the UK faces the question of whether or not to align with revised standards that the majority of UK production will have to comply with. The new UK Government can exercise its right to treat revision of EU Directives on a case-by-case basis but this treadmill exercise will each time confront the regulatory dominance of the EU over our automotive industry.

Surely the time is right for the Labour Government to now make a clear commitment to dynamic alignment with EU regulations. Ahead of the review of the UK-EU Trade and Cooperation Agreement next year, an unequivocal statement in favour of alignment would reengage the UK with the Brussels automotive ecosystem that drives development of global vehicle standards. The TAC includes an annex on motor vehicles with the objective of avoiding “unnecessary technical barriers to bilateral trade” and encouraging “convergence of regulations” notably at the UN Forum18. But to fully exploit this opportunity it makes no sense for the UK to allow divergence from the EU.

Harmonization of global regulations is a shared strategic objective of both the UK and the EU. The automotive industry is heavily globalized and international standards encourage a level playing field of competition and extend levels of safety and environmental protection worldwide. The economies of scale achieved by global standards make safer and cleaner vehicles more affordable everywhere. For a country that exports eight out of every ten cars it produces, working with the EU to promote global standard setting makes far more sense than drifting towards isolation under GB type approval. That is why dynamic alignment with the EU on automotive regulation is essential. It would mark the demise of the dead-end path of Brexit divergence and represent a UK-EU reset of real substance.

 

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