A new sanitary and phytosanitary (SPS) agreement between the UK and the European Union has sparked political controversy, with critics warning it could shrink the economy by as much as £15bn, highlighting the significant economic stakes for the public and policymakers.

The deal, agreed between the government of Keir Starmer and the European Commission, would see the UK align closely with EU food safety, animal health, and pesticide regulations to reduce border friction on agri-food exports.

The Growth Commission-founded by former Prime Minister Liz Truss-described the agreement as a “monumental act of self-harm”, underscoring the political stakes involved in sovereignty and regulatory independence.

The commission argues that regulatory alignment will limit the UK’s ability to diverge from EU rules.

The deal’s regulatory alignment may limit the UK’s ability to diverge from EU rules, raising questions about future agricultural innovation and the flexibility to set standards independently.

The report estimates the long-term cost to the UK economy at £15bn, which could have substantial effects on sectors such as farming and regional economies, though government officials dispute the modelling underpinning that figure.

Shanker Singham, the Commission’s chairman, said: “Hardwiring into UK law SPS regulations, which are already costing EU economies dear, would be a monumental act of self-harm that would be extremely difficult to reverse.“

“The European regulatory system is one of the most anti-competitive and growth-destroying regulatory systems in the world … With a pressing need to grow its economy.

“The last thing a country like the UK should be doing is aligning to European regulations.”

“Having extricated ourselves from the … European Union, we now have the freedom to chart our own course when it comes to rules and regulations,” Singham added.

“We can and should have more pro-competitive regulations … which is the norm for non-EU, non-China markets. It would be madness now to hand back control of our regulations to Brussels.”

Some British farmers have voiced unease about the implications of rule alignment, particularly around competitive pressures from EU producers, ongoing compliance costs, and a reduced scope for regulatory innovation, which can make policymakers and stakeholders feel the complexity and difficulty of balancing interests.

However, other agricultural groups have welcomed reduced border checks, arguing that smoother access to EU markets could cut export delays and spoilage — especially for perishable goods.

The EU remains the UK’s largest single trading partner for agri-food exports.

The Growth Commission also raised concerns about potential friction with the CPTPP, which includes Australia and New Zealand, and how close alignment with EU standards might complicate future trade negotiations with these partners.

Critics argue that close alignment with EU standards could complicate regulatory cooperation with Pacific partners if standards diverge significantly.

Trade experts note, however, that many CPTPP members already export into the EU and are accustomed to meeting EU regulatory requirements when necessary.

The Cabinet Office rejected the think tank’s analysis, insisting the SPS agreement will help reduce border paperwork, cut inspection requirements, lower costs for exporters and deliver a net economic benefit of £5.1bn.

Officials argue that alignment in a narrow, technical area of food and plant safety does not equate to broader political control, and that Parliament retains the legal authority to diverge in the future — albeit with trade consequences.

A government spokesman stated: “No one seriously worried about British business competitiveness would argue for more paperwork, higher costs and longer queues at the border.

“Government analysis shows that a food and drink trade deal will add £5.1bn to the economy.”