The civil nuclear industry faces “significant damage” unless the UK maintains the benefits it enjoys as a member of Euratom treaty, the Confederation of British Industry (CBI) has warned in a new report.

In the study, entitled Smooth Operations, the business lobby body has assessed the extent to which the UK should diverge from EU rules and regulations following Brexit.

In most of the 23 sectors the report examines, it concludes that the benefits from diverging are “vastly outweighed” by the costs of deviating from rules necessary to ensure smooth access to the EU single market.

These include energy where it concludes that alignment with the EU’s energy and climate change rules will help “achieve secure, affordable and low-carbon energy supply”.

The CBI throws its weight behind efforts to keep the UK within Euratom, which the report says provides the UK with access to in international trade in nuclear products and services or replicates its benefits via replacement arrangements.

The CBI says Euratom’s safeguarding arrangements are “vital” for the operation of the existing nuclear fleet and the delivery of the new build programme, commencing with the Hinkley Point C plant.

The report says it is “important” that the UK maintains the benefits of Euratom.

“Failure to preserve continuity in these arrangements on nuclear would result in significant damage to the UK civil nuclear industry,” it says.

The report also calls for:

  • regulatory convergence to ensure barrier-free access to the Internal Energy Market, and the preservation of the all-Ireland Integrated-Single Electricity Market
  • full participation in the EU Emissions Trading System until 2020 and ensuring equivalence following that date
  • new mechanisms to manage alignment of regulations and for the UK to influence rules that affect it post-Brexit

It says: “Given the critical nature of the energy system, it is vital that a pragmatic approach to negotiations is taken in this area.

Carolyn Fairbairn, CBI director-general, warned at the launch of the report this morning (11 April) that alignment with EU rules matters for UK jobs and prosperity.

She said: “The task of unpicking 40 years of economic and regulatory integration is complex and colossal.

“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.”