Nothing has changed: The path to a greener economy does not pass through a 'no deal' Brexit

James Murray
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Nothing has changed: The path to a greener economy does not pass through a 'no deal' Brexit

The implications for the green economy of tomorrow's crucial parliamentary vote are as clear as polluted mud, but one thing remains clear

What else is there left to say? For the past eight weeks, and arguably much of the past two years, the government has been engaged in a dismal exercise of time-wasting deferral. In what amounts to a still shocking dereliction of duty hard choices have been ducked, unavoidable trade-offs dismissed, timetables torn up, and key votes delayed. These political machinations have achieved nothing beyond fuelling investor uncertainty, burning through crucial good will, and upping the likelihood of extreme economic and social chaos. Well done everyone.  

And yet reality can only be denied for so long. Tomorrow the House of Commons finally votes on the government's Brexit deal and the interminable exit process enters a new phase. It is tempting to characterise the prospect of this dramatic parliamentary showdown as the start of the Brexit end game - tempting, but false.

This is no end game, it is merely another staging post on a tortuous journey that will take the best part of a decade and possibly longer. Whatever the eventual outcome - May's deal, an alternative deal, a second referendum, or 'no deal' - years of continued uncertainty and political heavy-lifting stretch ahead, be it through the brokering of a supremely complex new UK-EU trade deal, the repairing of the divisions a new referendum would inevitably deepen, or the long haul of recovering from the economic and geopolitical fallout which would come with 'no deal'.

It is not true of every 'no deal' advocate, but there is a sneaking suspicion some of the political and media cheerleading for the most reckless route forward is driven in part by a combination of boredom and laziness (yes, Boris and David, we are looking at you).

How do you avoid the daunting task of brokering one of the most complicated trade deals in history? How do you duck the urgent debate about how to repair the UK's frayed unwritten constitution? How do you best ignore the growing chasm between the two sides of the country? Just get on with it, of course. Embrace the Warnock doctrine. Crash out and hope for the best. Deliver a 'Clean Brexit', engineered with help from dirty money and in pursuit of dirty policies. No deal is better than a bad deal, after all.

However, for the government and the vast majority of parliamentarians who recognise the huge risks 'no deal' entails a flurry of finely balanced political equations now present themselves. The implications for the green economy are as significant as they are obvious. The problem is trying to calculate which path forward promises the lowest risks and the highest rewards.

Revealingly the Greener UK coalition of environmental groups, which has done a sterling job tracking the complexities of the Brexit process and its likely implications for the UK's environment, last week published an update of its briefing on the Withdrawal Agreement. "At this stage, it is unclear whether approving or rejecting the deal would lead to better environmental outcomes," it declared. A few days from the vote and on this most important of issues everything remains as clear as heavily polluted mud.

Greener UK is right. It is impossible to tell which route forward presents the best option for the environment and the green economy. It boils down to a value judgement based on MPs' assessment of likely future scenarios and their willingness to trust the government.

On the face of it, the government's argument is reasonably compelling. The Withdrawal Agreement and political declaration incorporates repeated pledges to maintain environmental protections, introduce a new Green Watchdog, and work closely with the EU on climate action and other critical issues. It gives Michael Gove the freedom to pursue his sweeping green reforms of agricultural subsidies. And it steers the UK away from the 'no deal' iceberg, delivering low barriers to trade and relative stability, giving Ministers the freedom to get back to the serious work of delivering the next wave of green economic development.  

So May's deal it is, right? Not so fast, unfortunately. It is understandable that many business groups are attracted to the supposedly safe harbour offered by May's deal, but are their rocks hidden just below the surface?

While acknowledging some of the benefits of May's deal, Greener UK's briefing highlighted how many of the green pledges and commitments contained in the Withdrawal Agreement are not as robust as they first appear. The story of the proposed Green Watchdog is a case in point, with the proposed Environment Bill still failing to ensure the agency is properly independent and provided with the enforcement powers EU agencies currently enjoy. Moreover, the running battle between Defra and the Treasury is still not resolved, and as such the government's current proposals feature various caveats and legal get out clauses that would make it relatively easy for a future administration to water down environmental standards and policies.

The government insists such an outcome will not happen. That the public would not support a deregulatory drive and, besides, Ministers have no desire to engineer one. But are such reassurances credible? As the New Statesman's Stephen Bush observed this morning, Theresa May has an inglorious track record of misleading and flat-out false statements, whereby her characteristic stubbornness morphs into a say anything willingness to save her own skin. It was the Conservative's stance on Wales' referendum that was the subject of today's exercise in creative remembering, who is to say all those Green Brexit pledges don't one day enjoy the same fate.

In the wake of the referendum vote I had a coffee with a Conservative politico who predicted the big risk for the green economy was that May would ultimately have to provide the Hard Brexiteers with some red meat to secure their support, and the environment was one of the top candidates for the role of sacrificial lamb. That analysis is as compelling now as it was then. The government may have talked up its environmental pledges, but in her inability to smack down Ministers who trail their green deregulatory vision or chlorinated chicken trade deals, her failure to publicly stress her commitment to climate action, and her unwillingness to take a stronger line against the Treasury's antipathy towards environmental issues May hints to colleagues that the Green Brexit model could be up for negotiation. From the controversial Irish Backstop down, you can see why the EU is so keen on incorporating safeguards in the Withdrawal Agreement that limit the UK's ability to undercut it in the future. Instead of building trust, May has spent years demolishing it.

So rejecting May's deal is the most sensible path forward for the green economy then? Again, not so fast. It is true that defeat for the government opens up the route to either a second referendum or a softer Norway-style Brexit deal, which would deliver tighter integration with EU environmental policies while still allowing the UK to pursue its own Green Brexit farming and fisheries reforms. The merits of such an approach are obvious for green businesses and investors. However, there is a fork in the road towards such green (if not exactly sunlit) uplands, and it heads towards the 'no deal' quagmire.  

If one thing is certain amidst all this uncertainty it is that 'no deal' would be a disaster for the green economy. You can carefully catalogue the technical risks that would come from crashing out of the EU emissions trading scheme, energy union, and wider European regulatory regime. You can mull the extent to which an economic crunch would damage green businesses and push climate action further down the agenda of a government battling with a self-imposed recession. And you can weigh the likelihood of a future government responding to these pressures with a dose of deep deregulation and tax cuts straight out of the disaster capitalism playbook. But most of all you can simply look at how so many of the cheerleaders for a 'no deal' Brexit are precisely the same people who have spent over a decade trying to demolish the UK's efforts to become a modern, world-leading, 21st century, decarbonised green economy.

In one of his many self-justifying post-referendum musings, the Vote Leave mastermind Dominic Cummings acknowledged that Brexit could prove to be a disaster, but insisted it still opened up more positive 'possible branches of the future' than the status quo. As MPs mull their vote tomorrow their decision rests on how confident they are in their ability to navigate these 'possible branches', to head off disaster and plot out a workable route forward. 

All green businesses can do is watch and wait, knowing that whatever happens varying degrees of uncertainty are inevitable and a full blown crisis cannot be ruled out. As Theresa May observed when confronted with a different hugely damaging bind of her own making, nothing has changed.

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