Boris Johnson has been urged to use new-found Brexit freedoms to ensure that the UK becomes more competitive.
Shanker Singham, a former Brexit adviser to the Government, said that in order to “maximise the benefits” of leaving the EU, Britain should not remain tied into Brussels’ rules.
Mr Singham, the CEO of economic consultancy Competere, said the ability to diverge on standards could boost competitiveness if both parties lowered market barriers as a result of the free trade deal.
Writing in The Telegraph, he said: “We must now, as a country, choose to use our freedom wisely.
“We must use it to create wealth, not destroy it – to be governed by competition on the merits as an economic principle, not intervention and Government distortion. We must put consumers above producers, recognising that all producers are consumers of something.”
The former Brexit secretary David Davis said new industries could flourish in the UK if the Government managed to get regulation “right” after Brexit.
He said: “For me it’s more about the new industries, from new pharmaceuticals to gene biology and AI. We need to establish our own regulation. If we get it right we will attract all sorts of new industries here.”
The Cabinet Office minister Michael Gove insisted on Monday that leaving the EU would mean “smarter and better” regulation.
He said: “If we look at the way in which the European Union has regulated in the past, when it’s come to financial services it hasn’t always regulated in a way which works to the advantage of the UK.
“London is the biggest financial centre in Europe, one of the two greatest financial centres in the world, and European Union regulation hasn’t always been as enlightened as it might have been, in making sure that we can regulate smartly and effectively.
“The Chancellor has already spelled out ways in which we can make it easier for companies to list here, but there are also other changes that we can make which can make sure that when it comes to things like financial technology that we can be a centre of innovation.”
In an interview with The Telegraph, Boris Johnson said he had defied accusations of “cake-ism” in getting a trade deal that allowed for divergence from EU standards. The Prime Minister said it had been seen as out of the question “that you could do free trade with the EU without being drawn into their regulatory or legislative orbit”.
The UK has signed up to maintain current standards in some areas, which had caused concern among Brexiteers keen to deregulate and boost competition.
However, Mr Johnson said: “All that’s really saying is the UK won’t immediately send children up chimneys or pour raw sewage all over its beaches.”
Under the compromise reached, both sides will be about to seek redress of divergence from standards through an independent arbitrator, with the possible imposition of tariffs if one party is deemed to have an unfair advantage.
A senior European Research Group member said there was an “expectation” that the Government would use the mechanism to diverge from Brussels’ rules in the near future.
The Tory MP said: “This is an agreement that has been designed to accommodate divergence, rather than convergence, which is really quite remarkable for a trade agreement.
“It will be an assessment for the Government of the day as to the extent to which they feel that further divergence is in the national interest. It is expected that the percentage of trade with the EU will decline and the rest of the world will increase.
“So it may well be that a government takes the view that well we’ll talk to the EU about diverging further. My feeling is that it’s probably likely to be the case that such divergence will start relatively soon.”