Brexit: a messy divorce or clean break for waste?

Written by: Matt Clay | Published:

Following the EU referendum, and with concerns about local authority funding being withdrawn, along with circular economy ambitions, what are the implications for the UK’s waste and recycling sector? Matt Clay investigates

Few could have the predicted the result of the EU referendum on June 24. Even MEP Nigel Farage, who has resigned as leader of UKIP and who could be called “Mr Leave”, was reported to have been shocked at the result. Britons had spoken – the majority (just, at 51.9%) wanted change and had voted for the UK to leave the EU.

Immediately following the result, the political landscape of the country and financial markets were in turmoil. The pound sank to its lowest level in 30 years, £100 billion was reported to have been wiped off the FTSE 100 and the UK was stripped of its top AAA credit rating by Standard & Poor’s. Prime minister David Cameron resigned, while former London mayor and Leave advocate Boris Johnson said he would not stand in the race to replace him.

While Brexiteers, along with German leader Angela Merkel urged the country to remain calm among a period of insecurity, the UK waste and recycling sector didn’t hold back when it came to sharing their thoughts.

Regeneration funding

Representing local authorities, the Local Government Association (LGA) immediately raised concern over EU funding that could be cut. In a briefing released at the end of June, the association said that as a result of leaving the EU, there will be a risk to local regeneration funding, worth £5 billion in England (2014-2020).

“It is important for the government to guarantee it will protect this vital funding to avoid essential growth-boosting projects stalling and local economies across England being stifled,” said the LGA.

The association also questioned whether the government has the resources to transfer full regulatory powers to Westminster.

“The sheer scale of the negotiations that need to be undertaken by government calls into question whether it has the capacity and staffing to deliver. The civil service may need to focus on our international trade agreements and we could offer to lead the negotiations where services are delivered locally (for example on economic development and waste).”

Meanwhile, the Association for Public Service Excellence (APSE), which works with more than 300 local councils across the UK, said the referendum vote will have a “fundamental impact on local government”.

Paul O’Brien, chief executive of APSE, says: “It is not for APSE to judge the outcome of the referendum. The British people have voted for change, however we must not allow the results of the referendum to bring a further assault on local government finances. The ship is only just steadying from years of austerity budgets and now is not the time to crush the progress that local councils are making in bringing about stable local government services.”

Access to the single market

One of the biggest concerns from the Remain camp following the vote is the UK’s access to the EU’s single market, the largest economy in the world with a GDP per head of €25,000 from its 500 million-strong population. In return, the UK is the largest export market for EU goods.

The Bureau of International Recycling (BIR) expressed concern over a Brexit impact on trade.

“The decision of the people of the United Kingdom to leave the EU will undoubtedly have a deep impact on trade in the European Union and internationally and the economic and political consequences of this vote cannot be fully assessed at this moment in time,” says Ranjit Baxi, president of BIR. “We need to continue working together to promote free and fair trade globally while strengthening our diversity and reducing legislative and bureaucratic burdens on businesses.”

Others believe it has been EU regulation that has helped shift the UK’s environmental image in Europe.

David Palmer-Jones, CEO for SUEZ recycling and recovery in the UK, says: “As we transition to a more resource-efficient economy, something to which all UK devolved administrations aspire, the waste and resources sector continues to seek vision and leadership from Whitehall.

“EU membership for Britain has been a crucial and effective driver of environmental policy and legislation which has seen the United Kingdom transform from being the ‘dirty man of Europe’ to a solid environmental performer.”

He adds: “Our industry has a very clear vision and understanding of what needs to be done to ensure that we continue to make environmental improvements with or without EU membership. The environmental services industry stands ready to maintain its work with UK policy-makers to ensure that we have a positive future in front of us, and that we build on the environmental gains achieved over the last two decades.”

Circular economy – what now?

Other questions remain over the country signing up to the EU Circular Economy Package – a move that was expected had we voted to remain. If signed up, there could be

a household recycling target of 65% set by 2030, subject to considerations by the European Commission.

Ray Georgeson, chief executive of the Resource Association, believes circular economy ambitions should not falter.

He says: “The decision to leave will create uncertainties for many industries including our own. We made this clear during the referendum campaign, but recognise that the public have made a decision about the UK’s future in the EU. We must continue to advocate the power and value of the circular economy and ensure that our concerns about policy uncertainty are addressed.

“We will be looking for clear signals and reassurances from the government that they recognise the potential and value of our industries and that they commit to a more resource-efficient future, regardless of our future status in Europe.” Others believe the UK should implement circular economy proposals regardless of its position in the EU.

“The referendum result will extend and intensify the uncertainty around both our industry and the UK more generally,” says Jacob Hayler, executive director of the Environmental Services Association (ESA). “The danger now is that the waste and recycling sector is placed at the bottom of the government’s in-tray. It is therefore vital for us to make the case for the circular economy within the UK and to highlight the advantages of a strong and competitive resource-efficient economy. Once the dust settles it will be absolutely critical for investment in our industry that the government acts quickly to set out the terms of a UK exit and what it means for the waste sector.”

Performance uncertainty

Steve Lee, chief executive officer of the Chartered Institution of Wastes Management (CIWM), predicts that exiting the EU could bring political and regulatory uncertainty.

“The decision for the UK to leave the EU is not what most CIWM members, or many environment sector professionals, have said they wanted,” he says. “While it was conspicuously absent from the respective referendum campaigns, there is no hiding from the fact that EU membership has been a strong positive force for the quality of our environment and the associated benefits for our health, well-being, jobs, skills, growth and general sustainability.”

Lee adds: “Stepping out of the EU brings financial, policy, legal and performance uncertainty which may well threaten a slowdown or reversal of the improvements we have enjoyed in recent years.”

Clearly the recycling and waste sectors, like other environmental industries including renewable energy, have been shocked by the EU referendum decision. While (at the time of writing) the pound and FTSE 100 index have recovered to pre-Brexit-vote levels, leading Brexiteers to say “I told you so”, concerns remain over how the UK’s separation from the EU will affect it in the long term.

May Clay is a freelance correspondent

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