The House of Lords is examining “Dynamic Alignment,” the process of aligning UK and EU Single Market legislation in areas mutually agreed by the UK government and the EU. News of the inquiry was received shortly before the submission date. Vice-Chair Fiona Wishlade took up the task of responding on behalf of EMiS (European Movement in Scotland).
You can read the full submission here.
Submission of the European Movement in Scotland to the House of Lords European Affairs Committee Inquiry on Dynamic Alignment
Background
The European Movement in Scotland (EMiS) is part of the European Movement International family, and a partner organisation to the European Movement UK. The origins of the European Movement date back to 1947 when the concept of a United Europe was being championed by, among others, Winston Churchill. EMiS is a cross-party organisation engaged in maintaining and developing Scotland’s links with its European neighbours. EMiS takes no position on Scottish independence but is committed to, and campaigns for, Scotland rejoining the European Union.
In looking to reconfigure its relations with the EU, the UK cannot ignore the geopolitics of the new Trump era not least the tumult resulting from the “Liberation Day” tariffs and the global upheaval unleashed by the reckless attack on Iran. Since Trump’s return, UK public opinion has increasingly favoured closer ties with the EU, and a majority now supports joining the EU (Best for Britain, 2026). Voters recognise that the UK’s best interests are no longer protected by the trans-Atlantic alliance. They see the sense in drawing ever closer to the EU in terms of economy, security and democratic values. Most of the public supports substantial and concrete moves towards a rapprochement with the EU in as many areas of policy and regulation as soon as possible.
Against this background, EMiS welcomes proposals to reset UK-EU relations and acknowledges the importance of the understandings reached with respect to a Common Sanitary and Phytosanitary Area (SPS) and energy cooperation, among others (UK-EU Summit). Nevertheless, such measures are very much second best: for specific sectors they can partially mitigate the damage wrought by the Trade and Cooperation Agreement (TCA), but their scope is limited and they come at the price of the UK being a rule-taker. In other words, the benefits of dynamic alignment fall far short of EU membership in terms of sovereignty and economic impact.
1. What is dynamic alignment? How does dynamic alignment operate under EU agreements with non-EU countries other than the UK?
In general terms, dynamic alignment involves the ongoing adjustment of the regulatory arrangements in one jurisdiction to keep in step with rule changes in another. Dynamic alignment can be unilateral – i.e. countries might, for various reasons, opt to maintain regulatory alignment with the EU without any formal agreement to do so (CER, 2024). Voluntary alignment confers benefits to businesses since they only need to comply with one regulatory framework for the same products. The Product Regulation and Metrology Act 2025 is a form of unilateral dynamic alignment insofar as it enables secondary legislation that reflects changes in EU rules. However, the gains are more substantial where dynamic alignment takes place within an agreement that delivers greater market access and eliminates obstacles such as border checks and paperwork.
For non-EU countries dynamic alignment with EU rules inevitably involves a trade-off between market access and national autonomy. That said, the scale of the EU market is such that non-EU countries seeking to export into the EU are effectively rule-takers anyway.
The UK already has some experience with the sensitivities involved in dynamic alignment under the Protocol on Ireland/Northern Ireland to the Withdrawal Agreement. The subsequent Windsor Framework simplified some aspects of checks on goods moving between Northern Ireland and Great Britain, and, politically significant, introduced the “Stormont Brake” potentially enabling the Northern Ireland Assembly to object to some changes to EU regulation (House of Commons Library).
The most comprehensive arrangement for dynamic alignment concerns the European Economic Area (EEA), and specifically the three EFTA Member States – Iceland, Lichtenstein and Norway. These are part of the Single Market and have the scope to ‘shape’ legislation through the EFTA Secretariat, participation in the preparatory work of the European Commission, Expert Groups and Comitology Committees (EFTA). That said, EEA-EFTA countries do not have voting rights on EU legislation and the EFTA court, while not subordinate to the European Court of Justice, follows relevant ECJ case law.
2. In developing its arrangements for dynamic alignment, are there lessons that the UK should draw from:
a) the other countries that engage in, or are preparing to engage in, dynamic alignment with the EU—namely the European Free Trade Association (EFTA) countries of Iceland, Liechtenstein and Norway, within the European Economic Area (EEA); and Switzerland?
and/or
b) the experience of a form of dynamic alignment with respect to Northern Ireland under the Withdrawal Agreement Protocol/Windsor Framework?
The Swiss experience in EU relations illustrates EU opposition to opening its markets through time-limited static regulatory alignment. EU-Swiss relations have long been characterised by multiple sectoral agreements, a fragmented approach which the EU has rejected in favour of an overarching agreement. This has taken around a decade to negotiate; it is not yet ratified but provides for the dynamic alignment of Swiss-EU agreements with the development of EU law. Under this arrangement, Swiss experts would participate in ‘decision-shaping’ before changes to EU rules, but a joint committee would decide whether to update the Swiss-EU agreement. Arbitration would determine whether this constituted a breach of Switzerland’s obligations, following which the EU could adopt proportionate ‘compensatory measures’ (Astrid Epiney, 2026).
In terms of negotiations, given that the TCA largely fulfilled the demands of the EU but left the UK with a ‘bare-bones’ deal, the UK is very much the supplicant in any discussion. Moreover, the processes are long; EU trade negotiators are highly skilled, experienced and well-organised; and, as the Swiss and the UK have found out, if the EU opts to play hard ball, it will prevail.
3. Can formal ‘decision-shaping’ by non-EU states, under agreements with the EU, deliver real influence over the EU law to which it applies? If so, what institutional arrangements and resources should the UK Government have in place—in London, Brussels and national capitals around Europe—to ensure that it can participate in EU ‘decision-shaping’ as effectively as possible?
As noted, exporters into EU markets are effectively rule takers. Dynamic alignment per se does not alter this relationship, but there is greater scope to shape decision-making if dynamic alignment is part of an agreement with the EU.
It is difficult to quantify the degree of influence that non-EU states can, or have had, over EU law. The EFTA-EEA countries have sometimes been characterised as ‘fax democracies’ but the reality is likely more nuanced (Lindsell 2013). At the same time, while cautious not to claim UK exceptionalism, it can be noted that the EFTA-EEA countries are small. As a large country the UK has a more significant pool of expertise and should aim to secure participation in working groups and expert groups associated with relevant policy areas. In addition, and consistent with the practices of EFTA-EEA countries, the UK could seek to second staff to the European Commission and relevant EU agencies.
4. Are current arrangements for parliamentary scrutiny of UK-EU relations adequate for scrutinising dynamic alignment? What would an ideal system for parliamentary scrutiny of UK dynamic alignment comprise?
The answer is patently ‘no’: current arrangements are inadequate to scrutinise dynamic alignment. Since the demise of the European Scrutiny Committee in 2024, the House of Commons does not have a single select committee with oversight of European issues. While many of the legislative proposals which affect the UK would be sectoral and highly specialised, requiring involvement of other select committees, the devolved governments and specific stakeholders, there is also a strong case for an overarching committee. This partly reflects the need for coordination, but also the scope for lessons to be drawn from the experience of dynamic alignment to be applied to other policy areas in due course.
The key is to influence legislation before it is adopted, which is possible both through the Council working groups and through the European Parliament, now that the latter is a co-legislator with the Council in many fields. That means ensuring full intelligence gathering on legislation in prospect, interaction with the Commission in advance of proposals, lobbying of Member States manning the technical committees and lobbying of MEPs and EP Committees. As such, the focus needs to be on adequate resourcing of those efforts. Ideally, it would be good for the government to have official observer status at technical committees; it is unclear whether that is being negotiated.
For the UK Parliament to be effective in scrutiny therefore requires early analysis and debate on key issues; once the government tables a legislative instrument, it is too late. The Lords European Committee has done some good work in the past on pre-legislative scrutiny. They might consider working with the Domestic Advisory Group under the TCA, and they might hope to have some influence if they can help inform especially Irish MEPs and the Irish Government, who sometimes have limited expert resources in highly technical fields, but were
rarely unaligned with the UK when the UK was an EU member (except, perhaps, regarding fisheries).
5. What impact are the three new UK-EU agreements that are currently in prospect likely to have on UK GDP? (the three agreements being on: the creation of a Common Sanitary and Phytosanitary (SPS) Area; the linkage of the UK and EU Emissions Trading Schemes (ETSs); and UK participation in the EU’s internal electricity market)
EMiS has not undertaken any specific assessment of the economic impact of these agreements. Government sources suggest that an SPS Agreement alone could add over €5 billion a year to the UK economy and Scottish government estimates that the benefits would be proportionately greater as agrifoods are a higher share of GDP in Scotland.
Whilst these gains are certainly welcome, they are modest and fall very far short of the benefits of a much wider and deeper arrangement, such as full participation in the Single Market or EU membership.
6. To what extent are the drawbacks and benefits of these prospective agreements for the UK, including with respect to GDP, likely to depend on their precise terms—for example, with respect to the scope and operation of, and exemptions from, dynamic alignment?
The depth and breadth of any agreement is highly correlated with the benefits it can generate in terms of reduced trade friction and economic gains; the sparse terms of the TCA essentially maximised the trade friction and economic harm resulting from Brexit. In terms of drawbacks, the chief concern is the limited scope for the UK to influence the EU rules to which the UK would implement. This, however, is an inevitable consequence of trying to mitigate the damage of Brexit while remaining outside the EU.
7. Should the UK make a financial contribution to the EU or EU policies as part of its dynamic alignment agreements? Is there a level of contribution that would mean that such agreements do not represent value-for-money for the UK?
It would be normal for the UK to make a financial contribution towards the operation of the agencies and other facilities involved in implementing common policies. For example, an SPS Area would involve costs related to agencies, systems and databases which the UK would need to access. Similarly, there would be administrative and implementation costs associated with any agreement to link the UK and EU Emissions Trading Systems and the UK should expect to meet its fair share of such costs.
Regarding an agreement on electricity whereby the UK would participate in the EU internal electricity market, the proposed costs to the UK would go beyond implementation costs and involve a financial contribution towards reducing economic, social and territorial disparities in the EU. This would be analogous to the contributions made by the EFTA-EEA countries and Switzerland under their respective arrangements. So-called ‘EEA grants’ contribute around €2.8 billion for the period 2021-28 (Council of the European Union, 2024); in addition, ‘Norway grants’ contribute a further €1.5 billion in 2021-28 (Council of the European Union, 2024a). These sums are directed towards the 13 newer Member States – primarily in central and eastern Europe, but also Cyprus and Malta, and include support for Ukraine. They relate to EEA-EFTA participation in the Single Market, so the relative contribution would be less for
the electricity market alone. Nevertheless, two observations are worth making. First, financial contributions towards Cohesion policy in the EU would be politically contentious, not least because of the wide economic disparities within the UK (ironically exacerbated by Brexit). Second, the financial contributions made by Norway are significant – for 2015 these involved a net contribution of €116 per head compared to the UK net contribution of €214 as an EU member (House of Commons Library). In short, Norway contributes a significant sum even as a rule-taker in the Single Market. Given this, the UK may well come to the view that full EU membership would represent better value for money than a series of sectoral agreements with limited input into decision-shaping.
8. What are the implications of the three prospective agreements with the EU, and of the Government’s general policy of dynamic alignment with the bloc, for the UK’s trade relations with countries outside the EU—with respect especially to the United States, and the UK’s membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)?
Since Brexit the UK has negotiated an array of trade agreements with non-EU countries. For the most part, these are ‘rollover’ deals that largely replicate arrangements of which the UK was a part prior to Brexit and do not alter the terms of trade. There have been some exceptions. For example, while negotiations between the EU and Australia were stalled the UK concluded a deal with Australia. However, the UK-Australia deal has been widely criticised, especially by the UK farming sector, for the advantageous terms given to Australian exports. Moreover, its economic impact is extremely modest – it is expected to increase UK GDP by just 0.08 percent or £2.3 billion a year by 2035 (House of Commons Library). Meanwhile, the EU has concluded a trade deal with Australia that is more advantageous to the EU than the UK-Australia deal is to the UK (Politico).
The UK has also joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the economic impacts of which are said to be similarly modest: “UK gross domestic product could increase by the equivalent of £2.0 billion in the long run” (House of Commons Library). It is unclear whether and how an SPS Agreement might impinge on membership of the CPTPP; however, the UK can with notice withdraw from the CPTPP within 24 months (CPTPP Accession Protocol) should membership be an obstacle to dynamic alignment with the EU, the benefits of which would be significantly greater.
The prospect of a UK-US Free Trade Agreement has long been promoted by supporters of Brexit as a significant prize for leaving the EU, but this seems increasingly distant. Moreover, the gains would anyway be marginal. The Conservative government outlined two scenarios depending on the level of reduction in tariff and non-tariff barriers achieved in negotiations. These suggested that the ‘long run’ gains from such a deal would be 0.07 percent of GDP in a minimalist scenario and 0.36 percent of GDP under a maximalist scenario (Department for International Trade).
In short, the long-run economic benefits of these actual or potential agreements pale into insignificance alongside the impact of Brexit – which reduced UK GDP per head by 6 to 8 percent by 2025 (NBER). As such, the possible losses from withdrawing from the CPTPP or potential gains from an elusive US trade deal, would be overshadowed by the gains from
dynamic alignment, and massively so by the benefits of full membership of the European Union. The simple fact is that it is easier to trade with countries which are closer.
9. What issues does prospective UK dynamic alignment raise for the UK’s devolved administrations and legislatures? How should the UK Government and Parliament engage with the devolved administrations and legislatures in a system of dynamic alignment?
The change of government in July 2024 provided an opportunity for a domestic reset of relations. While there has been something of a thaw, more needs to be done by the UK Government to involve the Scottish Government and Parliament in the development of relations with the EU. Scotland has key interests in the SPA and energy sectors. The reset negotiation arrangements should therefore provide intergovernmental machinery in which Scottish Government officials are intimately involved in agreeing UK policy objectives and their detailed knowledge of the respective industries reflected in UK expert groups.
It is also important to retain and develop the offices of the devolved administrations in Brussels and EU Capitals. It may be worth considering whether an expanded secretariat of the British-Irish Council could act as an official-level clearing house between the various devolved administrations and their Irish and Northern Irish counterparts. From a legislative point of view, it is to be hoped that the UK Government would invite Parliament to invest the Scottish Ministers with the same secondary legislative powers as they had under the European Communities Act when the UK was a member (even if UK Ministers maintain a reserve mechanism to ensure compliance to meet the UK’s international obligations to the EU). This would require a Scottish Parliament legislative consent motion under the Sewel Convention arrangements in relation to the forthcoming Westminster Bill.
10. What actions need to be taken and arrangements put in place—in legal, institutional and practical terms—before UK dynamic alignment under the three prospective agreements is operating fully and smoothly? How long might this process take?
Government sources are best placed to respond to this question. However, there is a need to act at pace across the board to prevent further divergence. Tracking of UK and EU regulatory change shows that divergence is significant in some areas, such as digital and chemicals (Reland, 2026). Failure to stem such divergence will lead to a clamour for transitional arrangements and risk delaying the benefits of dynamic alignment
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