Impact of a no deal Brexit on the waste management sector
As a law firm, B P Collins has guided the waste management sector in the UK for more than 20 years and has also held discussions with an array of companies within the waste management and recycling area. Additionally, Matthew Farrow (executive director of the Environmental Industries Commission) acted as the chairman for the discussion.
Matters discussed below include; whether or not Michael Gove should remain at DEFRA, and the effect that a ‘no deal’ Brexit would have on the UK’s waste management.
Michael Gove’s future at DEFRA
Many participants felt that Michael Gove has made good progress at DEFRA, however his focus on the Deposit Return Scheme (DRS) seems to be misguided. There was a belief that Mr. Gove remaining as Environment Secretary would be a good thing for the waste management industry. It would help ensure that DEFRA maintains a high profile and guarantees a degree of consistency. However recent history does suggest that two years is the most common tenure for a DEFRA minister.
Statements
Matthew Farrow
As a Brexiteer, Michael Gove needed to show that Brexit did not mean environmental policies would languish. The prospect of Brexit has created a lot of interesting thinking in DEFRA and that’s had a positive effect on many policy areas such as the Environment Bill. In terms of recycling, the challenge now is to build on the progress with getting recycling rates up on the easier to collect materials such as with glass, card, paper and moving us from the bottom of the European league tables to a respectable mid-level position.
The recycling rate has stalled in the last five years and there are now much tougher issues to contend with such as the reality of the waste sector margins, which are often low, constant concerns about waste crime, regulations being enforced and fluctuating commodity prices.
David Smellie
David Smellie made the following statement of which BP Collins agreed with. Gove has been instrumental in a fundamental change of DEFRA’s policies and in the department publishing strategies which had been promised for some time including the government’s overhaul of the UK’s waste strategy. He is an asset to the department. But there is still much more to do. The UK still exports a large amount of waste and something has to be done to reduce the level of waste being produced.
Clifford Darton
I have met Michael Gove and he is not only clever, but he is an intellectual. My guess is that Mr. Gove might like to stay with environment and keep the department high profile.
In contrast however, there were many that questioned whether Mr. Gove had concentrated on the areas that needed alteration. An instance of where this was questioned can be seen below:
Matthew Ball
Having continuity and keeping Mr. Gove in place would not be a bad thing at all. But on the back of the consultations that have just recently closed on EPR (extended producer responsibility), packaging tax and DRS, I believe that EPR legislation needs to be looked at in greater detail. And it seems to me that DRS will only be required when there is consistency across the country and EPR has been fleshed out.
But for me it seems that Michael Gove has hung his hat on bringing DRS in, whether there is an appetite for it or not. And that’s my only area of concern at the moment. I think that he regards DRS as his thing and is going to push on regardless.
How the waste and recycling sector would be affected by a no-deal Brexit
With Boris Johnson being in the last two for the race to number ten, he has highlighted the fact that he is prepared to countenance leaving the EU on the 31st October without a deal.
The following statements were made in response to chairman Matthew Farrow who raised the question on what people’s opinions were on the effect that a no deal Brexit could have on the waste and resources sector. From the statements, it was evident that many believed Brexit is creating a problem in the industry:
Statements
Peter Donoghue, P B Donoghue
The biggest impact of Brexit for us is that there is currently a huge shortfall of operational staff in the industry at the moment. We have a number of Eastern European drivers, who form the core of our business, but since Brexit, long term employees are choosing to return home as they feel quite unsettled. The biggest challenge is to keep staff levels up.
Paul Britton, TVCC
What I hear is that the process for leaving the EU has given the Government little time to focus on those local and national priorities that need attention. I’m concerned that the Government’s waste strategy will not get to see the level of investment that can meet ambition.
Despite these statements, many also claimed that Brexit would pose little threat and that there are more demanding issues:
Jeff Rhodes, Biffa
I think in terms of UK operating businesses, such as Biffa, the impact of Brexit will be quite modest. Yes, we export and trade recyclables and RDF (refuse derived fuel) to Europe and elsewhere but those markets are changing anyway due to China’s recent restrictions on what recycling it will accept, other countries also now following China’s approach, plus foreign exchange rates and other, natural market dynamics. It’s the UK infrastructure that really needs to be improved so we don’t have to rely on recycling export markets as much, whether we’re out of the EU or not.
Matthew Farrow, EIC agreed:
Matthew Farrow
That broadly fits with the view of the EIC’s waste and resources working group which consists of a wide range of waste operators. Despite the scare stories such as waste being stockpiled in Kent in the event of a no deal, most companies seem to have contingency plans in place for no deal.
Lee Underwood, Veolia Group
Veolia has already made contingencies in France for our business. We don’t see Brexit having a massive impact. Generally, we have made significant investment, tripled our stock levels in certain parts of the world to compensate for any issues with Brexit, but on a waste level we don’t expect to see anything major.
Craig Williams, B P Collins
Having spoken to waste management clients with domestic and international operations, they all started their preparations for a potential no deal Brexit two years ago, so everyone is now relatively comfortable with that prospect.
Peter Charlesworth, Carbon Statement
The Hospitality Carbon Reduction Forum members do not expect Brexit to cause any significant problems for waste management. The hospitality sector will however be monitoring the situation closely for any issues with labour and their F&B supply chains. Availability of personnel and disruption to supply chains both have the potential to cause operational management issues for the sector.
Following this, others wanted to highlight some of the positives surrounding Brexit. For instance, Jeff Rhodes having this to say:
Jeff Rhodes, Biffa
Brexit has actually stimulated Mr. Gove to push through the development of a new waste strategy which we haven’t had in the UK for around 10 years. It means that work has been done in DEFRA, which probably would not have happened without the need for post-Brexit policy planning. That new policy framework will be important for when we leave the EU but will still be important if we don’t, because either way we clearly need more recycling, more waste management infrastructure and more end markets within the UK and that’s what the new policy measures are meant to support.
Others hoped to have a freer market with the government giving overall guidance, rather than micro-managing, while the market is able to make the millions of small decisions.
Alex Zachary from B P Collins however had this to say in regards to the need for accountability:
Alex Zachary, B P Collins
At present, the EU can take enforcement proceedings against the UK should it fail in its environmental obligations, but when Mr. Gove took over at DEFRA, the lobbyists believed that once we leave the EU there would be no constraints on future governments in terms of sticking to environmental targets set by their predecessors. One of the key principles for Brexiteers is that parliament is sovereign and should hold ministers to account, but there is concern that no one will have the power to stop the government changing course after Brexit.
Mr. Gove has proposed that a green watchdog – the Office of Environmental Protection – should be created to hold DEFRA ministers to account. There is ongoing debate about how this would work but in theory it will have powers to hold future governments to account if they fail to meet environmental targets.
The discussion was then concluded by a statement from Matthew Farrow:
Matthew Farrow
I think that today has shown the impact of having an activist environment secretary. We have seen a lot of progressive policies coming out of DEFRA over the last 18 months, but that does mean that there is a lot of consultation and potential complexity for business to deal with.
