How the upcoming Environment Bill could help businesses post-Brexit

Richard Andrews, managing principal at Ramboll, discusses how the upcoming Environment Bill could help businesses move forwards post-Brexit.

In July 2018, the Prime Minister announced that the UK government will bring forward the first Environment Bill in over 20 years. Intending to build upon the government’s 25 Year Environment Plan, the Bill sets out to clarify how we can work towards improving the environment for the next generation and ensure environmental protections are not weakened as the UK moves on with Brexit and leaves the EU.

The UK’s departure from the EU will mean that the current environmental principles underpinning environmental legislation and policy-making, as well as the mechanisms that ensure compliance with environmental law, will no longer apply. Environmental principles are currently set out in the EU Treaties and the European Commission can take action if it considers that EU law is not being properly implemented by referring cases to the Court of Justice of the European Union where necessary.

The UK government’s environmental principles and governance consultation published in May 2018 did not suggest equivalent enforcement powers for the new independent body it has proposed to address this governance gap. However, this consultation was superseded by the European Union (Withdrawal) Act 2018, which gave the government six months to publish a draft Environment Bill and would include a minimum set of environmental principles. a duty on the Secretary of State to publish a policy statement on the interpretation and application of those principles, and provisions to establish a new body to take enforcement action when there may be a breach of environmental law, including through legal action if necessary.

This latter point is particularly welcome. Legal enforcement powers should continue to be available as a last resort in the event that environmental law is breached: particularly given that the consistent application of environmental law and regulations is key in creating a level playing field that supports business investment.

Fundamentally, the new Environment Bill will need to include provisions that deliver upon the government’s intentions going forward. As the vehicle to establish the new independent environmental watchdog, the Bill will incorporate environmental principles into UK law, and could be a unique opportunity to provide statutory underpinning to the government’s ambition in the 25 Year Environment Plan.

Notably, the withdrawal Act did not include any provisions on the inclusion of forward-looking objectives in the Draft Environment Bill. Consequently, this section is not expected to be included when the draft Bill is published in December 2018, as understandably the Department for Environment Food and Rural Affairs (DEFRA) has had to focus on the parts it was legally obliged to deliver. However, we can expect a separate statement to be issued alongside the draft Bill, which will set out the government’s intentions in this area when the final Bill is introduced in 2019.

Without underpinning legislation, the 25 Year Environment Plan will not by itself send clear market signals to businesses. The Environment Bill is therefore an important opportunity to set some long-term, well-defined and measurable goals to improve the state of the natural environment and provide businesses with clear signals to invest in environmental improvements and more resource efficient processes. Specific measurable targets could be established in legislation to cover, for example, improvements to air and water quality, soil health, peatland restoration, net biodiversity gain and the UK economy’s resource efficiency – all underpinned by clear milestones.

Once in legislation, these goals can then be used to genuinely shape environmental policies in the next couple of decades, provide much needed long-term policy direction to business and help reinforce the UK’s reputation as a world-leader in environmental action.

If given a statutory basis, these measurable targets will help to drive the creation of a supportive policy and regulatory framework post-Brexit, ensuring departments across government, and successive governments, are held to account on their delivery against the set goals. If the new environmental body (by itself or in conjunction with other existing bodies) is equipped with independent advisory and scrutiny powers, it will be able to scrutinise, advise on and report on the development of government policy to deliver against the goals, such as occurs under the Climate Change Act.

If implemented properly, the Bill could also bolster the British economy. When launching the 25 Year Environment Plan in January 2018, the Prime Minister rightly acknowledged that investing in key natural assets and improving the resource efficiency of the economy is key to the UK’s competitiveness.

While some still hold the view that environmental regulations pose a barrier to economic growth, recent research commissioned by the Aldersgate Group (of which Ramboll is a member) suggests that where well-designed and properly enforced, environmental regulations could deliver positive economic outcomes in the form of increased business investment in innovation and skills, better quality products and infrastructure, greater business competitiveness and job creation.

As the UK navigates Brexit and moves towards leaving the EU, the new Environment Bill will provide vital legal guidelines for shaping our environmental policies post-Brexit. We have already seen similar dynamics work, as evidenced by the introduction of environmental regulations in the construction, waste and care manufacturing industries. It is vital that we strengthen the upcoming Bill with measurable goals and supported by an effective regulator, so that it can send clear messages for businesses to invest and fund innovation in environmental improvements. By tapping into the green economy, we can help the UK become a world leader in this field.