The impact of Brexit on the UK’s planning and environmental regime: opportunities for limited change ahead?
The outcome of Brexit negotiations is still uncertain and it remains possible that the UK will crash out of the EU without a deal. The Conservative Party’s stated intent is to remove the UK from the Single Market, Customs Union and oversight of the European Court of Justice. However, as a minority government following the June 2017 elections, the government’s ability to get legislation through Parliament is heavily compromised. Therefore, it is unclear whether the government will be able to agree a deal with the EU for which it will have the support of Parliament.
Planning law in the UK is largely domestic, although it incorporates regulation on aspects such as environmental impact and habitat assessment driven by the EU. Much environmental regulation of industry also derives from the EU.
In the short term, there is unlikely to be any significant change as EU law will continue to have effect until the UK actually leaves the EU at 11pm on 29 March 2019 and during any transition period that is agreed with the EU (such a period is likely to run until 31 December 2020). The European Union Withdrawal Act came into force on 26 June 2018 and is designed to convert all EU law into UK law, as well as creating temporary powers (known as Henry VIII Powers) for Parliament to fill any gaps or amend legislation to better fit the UK framework.
The extent to which that legislation will survive Brexit beyond the short term will in part depend on any trade deal struck with EU and the continuing need for the UK to adhere to measures imposed to require high levels of environmental protection throughout Europe and a level playing field across Member States. If Brexit allows the UK to set its own environmental agenda, the outcome will depend on the political will of the UK Parliament. Over time, we may see the tailoring of environmental law to adapt to UK priorities or in response to business seeking deregulation.
The immediate term - The European Union Withdrawal Act
In the near future, it will be business as usual. The priority for the government is to avoid a regulatory gap upon leaving the EU, particularly in the environmental sphere as most secondary legislation implementing EU Directives has been made under the European Communities Act 1972.
The European Union Withdrawal Act will incorporate into domestic law all EU-derived domestic legislation, including statutory instruments made under section 2(2) of the European Communities Act 1972 to implement EU Directives and primary legislation to implement EU law, direct EU legislation (such as EU regulations, decisions or tertiary legislation) and other enactments that relate to EU law. As a result, all EU-derived planning and environmental law, such as the Environmental Impact Assessment regime and the Strategic Environmental Assessment regulations will continue to apply in the UK after 11pm on 29 March 2019.
In addition, UK courts will be bound by all decisions of the European Court made before exit day (and at least up to the end of any transition period, assuming the UK does not leave with ‘no deal’), but will not be bound by decisions made afterwards.
In the meantime, the government is releasing a series of guidance notes on the situation if a deal is not achieved which we will report on separately to the extent that they affect planning and environmental issues.
By 2019 – the way forward
Businesses affected by environmental regulation will need to monitor negotiations (both with the EU and between the government and Parliament) carefully. There is a remote possibility of a second referendum, the outcome of which would be uncertain but which might put an end to the Brexit process (as the European Court of Justice has ruled that it is possible for the UK to revoke the Article 50 Declaration).
It is looking increasingly likely that the government will not be able to get its Brexit proposals through Parliament. If this happens, the government might collapse and Parliament may seek to take control of negotiations, by passing a motion on what terms it would support the UK exiting the EU (subject to such terms being approved by the EU). In such a scenario, the UK could still join the European Economic Area (EEA), in which case it will have to comply with most EU environmental laws or retain membership of the Single Market and the Customs Union. As a member of the EEA but not the EU, the UK would have limited input into the evolution of existing environmental legislation or on the content of new legislation.
- For the planning regime, the UK would need to continue to comply with the Environmental Impact Assessment Directive and the Strategic Environmental Assessment Directive, requiring respectively assessment of the impacts of development projects and plans. However, the UK would be exempt from complying with the Habitats and Birds Directives.
- The UK would also be bound by legislation relating to water and air quality, waste management, REACH (Registration, Evaluation, Authorisation and restriction of Chemicals) and certain aspects of climate change legislation. Government incentives for renewable energy generation would still be governed by the State Aid rules.
If the UK signs a bespoke Free Trade Agreement with the EU or operates under World Trade Organisation rules (whether by choice or having failed to reach agreement with the EU on the terms of the UK’s departure which are also acceptable to the UK Parliament), there will be more scope for the government to consider changes to the environmental regime. However, even if the UK crashes out of the EU without a deal, in the short term it will be business as usual as set out above, as all existing EU- derived legislation will be incorporated into domestic law by the European Union Withdrawal Act. Furthermore, the government’s priority in such a scenario would be stability and certainty for business and therefore, the chances of any significant changes in the short term to the planning and environmental regime would be low.
The long term
As is evident from the above, the scope for change to environmental legislation in the medium to long term depends primarily on the outcome of Brexit negotiations.
Opportunities may, however, arise. The need to maintain a healthy economy is likely to result in the government coming under pressure from businesses to limit the burden of environmental regulation. Developers may seek to cut red tape and reduce the costs of development work, particularly in the areas of environmental assessment where there may be support for increasing thresholds and simplifying procedural requirements. Following recent changes to licensing regimes, there may be further paring back of the protection of species such as the great crested newt which are commonplace in parts of the UK.
However, any change is likely to be gradual as the need for sustainable development and environmental protection remains a key plank of domestic policy. The UK also has a strong environmental lobby with influence at government level. Further, the large-scale removal of regulation could have political consequences, particularly in the wake of the Grenfell Tower disaster.
Moreover, aside from EU regulation, the government’s room for manoeuvre is constrained by international commitments it has signed up. Examples include RAMSAR (on Wetlands of International Importance) and the Aarhus Convention (on access to information, public participation in decision-making and access to justice in environmental matters).
A particularly controversial topic at present is air quality. The UK is consistently in breach of the main directive and the issue is increasingly becoming a factor in planning decisions, such as on a further runway at Heathrow, which the government has recently committed to. The government might be tempted to water down these provisions, although in doing so may face considerable political opposition, given the adverse impact that poor air quality has on people’s health and the natural environment and the increasing ease for individuals to monitor the quality of their environment.
One possibility which businesses should bear in mind is that, in the medium to longer term, there could be increased divergence and fragmentation between the environmental regimes within the constituent parts of the UK. Environmental matters are devolved to the Welsh Assembly and the Scottish Parliament. Although it is unclear whether environmental competences returned from Brussels will automatically be returned to the devolved assemblies, there is significant political pressure for this to happen and the Sewel Convention (that the UK government will not legislate on devolved matters without the consent of the devolved legislature) suggests that it will. This could lead to the devolved legislatures enacting more stringent environmental regimes (which themselves may differ), even if the UK Parliament may cut regulation in England.
As the UK’s future post-Brexit becomes clearer, businesses are advised to think through their priorities carefully, talk to industry associations on issues of critical concern and consider the most effective ways of lobbying for change.
For more information please contact Claire Fallows on +44(0)20 7427 1046 or at email@example.com, or Tom Sharman on +44(0)20 7203 8916 or at firstname.lastname@example.org or your regular Charles Russell Speechlys LLP contact.