Brexit deal finally brokered on Christmas Eve, but big questions remain over long term ramifications for environmental standards and green trade
The UK and the European Union have finally come to an agreement on their future relationship after the Brexit transition period ends next week, with the two sides announcing an historic trade deal on Christmas Eve that at last delivers a degree of stability for green businesses after more than four years of uncertainty.
With just over a week to go until the Brexit transition period ends on 31 December, a trade deal - reportedly 2,000 pages in length - was finalised this afternoon following the latest in a string of calls between British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen.
The trade agreement means that although the UK will leave the EU's Single Market and Customs Union in the New Year as planned, British business will be able to continue trading most goods tariff-free and without quotas across the EU's 27 member states. It also paves the way for continued close cooperation on a host of key issues, including climate change, energy, and security, the two sides said.
However, the deal does mean the UK will leave the single internal energy market, UK professional qualifications will no longer be automatically recognised in the EU, frictionless trade will end meaning reams of new paperwork for many businesses, border checks will begin leading to disruption to supply chains, and financial and other services firms will face significant new administrative burdens when trading with the EU.
Johnson hailed the deal - which the government claims is worth £668bn of trade, in 2019 terms - as a victory for the UK, which allows it to "take back control" over laws, borders, money, and fishing waters, while von der Leyen said the agreement meant EU rules and standards "will be respected".
With the full text of the deal not yet released at the time of going to press, experts and analysts were poised to comb through precise details of the agreement and its ramifications for environmental, food, animal welfare, and trading standards. MPs will also be faced with the near impossible task of assessing the lengthy document before voting on it next week.
However, businesses will nevertheless be hugely relieved that a disruptive no-deal cliff-edge has been avoided and the foundations laid for a relatively stable new trading relationship.
At a press conference this afternoon, Johnson claimed the "comprehensive, Canada-style, free trade deal" would protect jobs, avoid tariffs and quotas for UK goods, and "if anything allow our businesses and our exporters to do even more business with our European friends".
"We've taken back control of our laws and destiny," Johnson said. "We've taken back control of every jot and tittle of our regulation in a way that is complete and unfettered. From January 1st we are outside the Customs Union and outside the Single Market. British laws will be made solely by the British parliament, interpreted by UK judges in UK courts, and the jurisdiction of the EU Court of Justice will come to an end. We will be able to set our own standards, to innovate in the way that we want, to originate new frameworks for the sectors in which the UK leads the world, from biosciences to financial services, artificial intelligence, and beyond."
The deal is done. pic.twitter.com/zzhvxOSeWz
— Boris Johnson (@BorisJohnson) December 24, 2020
He also specifically referenced a potential boost for the green economy, which the government hopes will flow from the ability to develop more flexible environmental rules and state aid policies post-Brexit. "We'll be able to decide how and where we're going to stimulate new jobs, and we hope new free ports and new green industrial zones," Johnson said. "We'll be able to cherish our landscape and our environment in the way that we choose, backing our farmers and backing agricultural production. And for the first time since 1973 we will be an independent coastal state with full control of our waters."
The deal is expected to proceed to a Parliamentary vote after Christmas, most likely right up-to-the-wire on 31 December. Labour has already confirmed it will vote in favour of the deal. MEPs, meanwhile, are expected to have their say on today's final agreement later next month - although in both cases the deal is more than likely to secure approval from lawmakers.
In her own separate press conference in Brussels earlier, von der Leyen was quick to list climate change as a key area of continued cooperation between the UK and EU post-Brexit.
"We have finally found an agreement," she said. "It was a long and winding road, but we have got a good deal to show for it. It is fair. It is a balanced deal, and it is the right and responsible thing to do for both sides. Competition in our single market will be fair and remain so. EU rules and standards will be respected. We have effective tools to react if fair competition is distorted and impacts our trade."
"Secondly, we will continue cooperating with the UK in all areas of mutual interest," she added. "For example, in the fields of climate change, energy, security and transport. Together we still achieve more than we do apart."
Green groups, businesses, and trade associations are sure to breathe a collective sigh of relief that a no-deal cliff-edge scenario has been avoided that would have slapped sizeable tariffs on trade in clean technologies and plunged the economy into even deeper uncertainty amid the worsening coronavirus crisis.
CBI director-general Tony Danker said today's announcement was "a huge relief" for both the UK and EU economies. "We will review the full details," he said. "But it is urgent that both sides agree to smooth the cliff edge next week. Business now need grace periods to adjust and immediate guidance to proceed."
Key sticking points in the marathon trade talks had consistently surrounded whether the UK would have to follow EU rules and standards to continue trading tariff-free in the single market - a so-called 'level playing field' - and how much control the UK should gain over fishing in its seas.
Greener UK chair Shaun Spiers said both sides "appear to have agreed not to lower environmental standards" which he said was "very welcome".
"What will be important in the coming years is how the UK and EU challenge each other to raise standards and forge a partnership to tackle the nature and climate crises," he said in a statement this evening. "It is a relief that we now have a deal. Over the next few days, we will analyse details of the agreement."
On fishing, meanwhile, Downing Street today said the UK would have access to half of the fish in UK waters from next year rising to around two-thirds over the next 5.5 years, after which point the UK would gain full control over fishing in these areas. UK fishing communities will also benefit from a £100m programme to help modernise their fleets, the government said.
But with analysts and experts now set to analyse the final deal, its precise terms and what they could mean for business and environmental standards remain unclear in many areas, and focus will now turn to just how good a deal has been struck for UK plc and the green economy. Fears remain that the Brexit deal will be followed by a concerted push from those Brexit campaigners who oppose high environmental standards and climate action for the UK to now dilute EU green rules as swiftly as possible.
Sarah Williams, head of Greener UK - the coalition of 13 environmental groups campaigning for a green Brexit - said the organisation would be "looking closely at the deal to assess what it means for the environment".
Thank goodness for that. We'll be looking closely at the deal to assess what it means for the environment but good to hear from @vonderleyen there will be continued cooperation on climate change. We are more likely to tackle the climate crisis if we can work with our neighbours.
— Sarah Williams (@sarahw243) December 24, 2020
In a statement, RenewableUK said it hoped the announcement of a Brexit deal would "provide certainty for investors and stability for hundreds of companies developing and operating vital renewable energy projects throughout the UK".
"We'll need to study the text of the agreement in detail and there are several key points we'll be looking out for, but the agreement of a free trade deal on goods will help the British manufacturers exporting renewable technology to EU countries," the green energy trade body said. "It's important that our future arrangements with the EU's energy market allow us to trade power in a way that maximises the benefits of the interconnection with EU countries, so we can export our surplus power and import flexibly to support our energy system when necessary."
But while business and trade figures have welcomed the avoidance of no-deal scenario Brexit, many have also stressed that the agreement still signals significant upheaval ahead for trade and standards post-Brexit, and that costs and paperwork are set to increase for many firms.
Minette Batters, president of the National Farmers' Union (NFU), said the conclusion of a deal between the UK and EU was "very positive news for British agriculture", but she also stressed that the agricultural trade body would now analyse the details "to ensure it meets the needs of British food and farming".
"It does remain the case though that our relationship with the EU will experience a fundamental change at the end of the transition period on 1 January 2021 and we do anticipate that there will still be disruption to trade at the border," she said. "New checks, paperwork and requirements on traders will add costs and complexity."
Significant concerns also remain over how the UK will regulate and oversee its own environmental laws and regulations outside the auspices of the EU, with environmental groups continuing to push for greater independence and enforcement powers for the new Office for Environmental Protection (OEP).
Yesterday the government confirmed the appointment of Dame Glenys Stacy as chair of the OEP - the UK's new watchdog established to oversee UK green laws and regulations after Brexit - who has previously served in number of public sector regulatory and legislative bodies. Her past roles include acting chief regulator at Ofqual, chief inspector of probation, and chief executive at Animal Health.
Stacy - who received backing from MPs on Parliament's Environmental Audit Committee earlier this week - will take up the role in February, working with the interim Environmental Governance Secretariat before the OEP is fully established, according to the government.
"The OEP will one of the most important organisations of our time, dealing with the most pressing issues of our time," said Stacy. "We have a hefty job to do, on behalf of the public and our future generations - making sure environmental law works and develops as it should, to truly protect and improve our environment, and holding government and public authorities to account without fear or favour."
She added: "I am thrilled have the opportunity to lead and develop OEP, so that it becomes the unstinting and resolute watchdog we all want it to be."
However, green groups have consistently warned the agency and other similar bodies remain underfunded and underpowered compared to the EU bodies they are set to replace.
Today's trade deal and the impending transition period deadline on 31 December brings an end to decades of close trading cooperation between the UK and EU, and signals significant changes ahead for UK businesses and policymaking.
But Nick Molho, executive director at the Aldersgate Group, urged the EU and UK to continue to work together on mutual areas of priority, with both parties now aiming for net zero emissions by 2050 and working to "overturn the major declines in biodiversity and the state of the natural envirionment".
"Businesses will want to see both parties continue to innovate and work together to meet these goals, grow low carbon trade and build global political momentum on climate and environmental issues," he said. "We would encourage both parties to use the upcoming COP26 climate summit to put this collaborative approach into practice."