End of Brexit phoney war means more uncertainty

Matthew Farrow
19 January 2017

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Brexit aftermath

The formal start of the Brexit negotiations will usher in further uncertainty for environmental businesses, says Matthew Farrow.

As 2017 begins, Brexit is once again dominating the daily headlines and it feels as if the six-month phoney war since the referendum is coming an end. The original phoney war of 1939-40 ended of course with the German BlitzKrieg offensive against France in May 1940. The triggering of Article 50 won't be as dramatic as that but just as that attack was just the opening chapter of five more years of conflict, it is likely that the formal start of Brexit negotiations will be followed by several years of complex negotiations and fluctuating perceptions of the ultimate impact on the UK. 

 In terms of our focus here at EIC - environmental markets and policies - the Brexit phoney war has already seen some emerging themes in terms of impact.  As 24 June last year dawned, it's no exaggeration to say that the environmental community was in a state of shock. Eighty per cent of British green laws are decided at EU level, and the environmental twittersphere was awash with despairing predictions of Britain reverting to its old role as 'the dirty man of Europe'.  

This pessimism had logic to it – for example UK recycling rates were about 10% before the various EU waste directives began to bite;  they are now over 40%.  A full-scale dismantling of EU environmental regulations post-Brexit would undermine the quality of our air and water and decimate the environmental markets served by the consultancies and green technology companies which EIC represents. 

The last few months of 2016 have though provided some respite from the gloom. When the UK lost a second Supreme Court case over its failure to achieve EU air quality standards, no less a figure than the prime minister pledged that ministers would do more to comply with the EU standards, rather than say, as she could have done, that they would be repealed post-Brexit. This reflects my own conversations with ministers who say that they recognise that the public expect clean air and water and the government must meet these expectations. Indeed, recent opinion polls suggest that 80% of the public want environmental protection post-Brexit to be 'as strong or stronger' than it is now.

Other positive developments have been the announcement of a 'Great Repeal Bill' which should ensure some continuity of legislation and the Greener UK  campaign run by a coalition of green NGOs led by Green Alliance, which has got 176 MPs to sign a pledge to protect environmental standards post-Brexit. 

But while the existential threat posed by Brexit to sustainability seems to have receded a little, the practical problems if anything have multiplied.  An academic expert speaking at a recent EIC member seminar spoke of the risk of 'zombie legislation' - EU-derived green laws which remain in force but which the UK lacks the institutional capacity to properly implement once we have left the EU.  

A good example would be the EU's system of chemicals regulation known as REACH – the subject of a recent EIC/Ramboll Environ roundtable. With almost every manufacturing supply chain involving the import, expert and use of chemical substances, REACH has had a very significant impact on the UK manufacturing and industrial sectors and on the consultancies which advise them on sustainability issues. 

The system is administered by the European Chemicals Agency (ECA) in Helsinki. We could keep the REACH regulations, but without the ECA we could not implement them and trade with the EU. We could create our own equivalent agency, but this would be expensive and challenging in terms of assembling the expertise and integrating with the ECA's modus operandi. Switzerland wanted to pay directly to join REACH and make use of the ECA but was told it must also accept the judgements of European courts on chemicals policy implementation, something which proved too much for the Swiss and would probably be also for UK politicians. 

All of this of course, means deep uncertainty for business - and that's unlikely to change even when the negotiations start. 

Matthew Farrow is director of the Environmental Industries Commission, the leading trade body for environmental firms.