As far as I can ascertain, there is no regulation governing the maximum width of a narrowboat. But it appears that British canals are designed to be 14 feet wide, so in order for two boats to pass their total width cannot be greater than that. Hence the 7–foot standard.
Also, any boat with a beam of more than 7 feet will have difficulty navigating locks, bridges, etc.
The consensus seems to be that most modern narrowboats are built to be 6' 10" wide. I did find one website which said that some locks that were designed for 7–foot boats could no longer accommodate boats of that width due to subsidence.
© Haydn Thompson 2017