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Triggering Article 50

14 March 2017 Author: Janice Morphet

Blog _pic _tuesdayAs the Prime Minster triggers article 50, setting the clock ticking for a two year negotiation period with the EU, what issues should planners be looking out for in the coming months? These can be considered in two groups. The first is the wider economic and social context that will have a considerable influence on the course and outcome of the negotiations. All politicians are susceptible to influence from their own political parties and financial backers. The Prime Minster is no exception to this, as recent changes in policy on business rates, National Insurance Contributions and funding deals for some local authorities all demonstrate. Secondly, what are the issues for planning implementation including legislation, funding and defined projects?

The contextual issues are primarily economic and could have a considerable influence on the discussions as they proceed. While there has been much criticism of the cataclysmic economic forecasts that were made prior to the EU referendum, not least as the economy appears to be on a growth trajectory, there are also now some counter signs. Consumer spending before Christmas was high, although this was funded through personal debt and now expenditure is falling. This will have implications for both high streets and on line business together with the suppliers and distributors that support them.

Secondly, the early promises to Nissan about Government support, which were given but never made transparent, now seem to be less convincing than before. Other car makers would like the same deal if it is on offer, and despite this, several car manufacturing businesses are under threat including the Ford plants, the BMW production of the Mini, the Vauxhall production as part of the wider General Motors sell off and Jaguar Land Rover has stated that Brexit could threaten its future in the UK. Where these plants are located, it is not only the direct employment that will be under threat but all the jobs that sit on the back of the local income and expenditure they bring including suppliers, services and retail.  The volumes of jobs under potential threat are considerable and any statements that jobs will be leaving the UK in the automotive and other industries will sharpen the discussion at local and national levels. The same will the case with financial services where some major business have already announced their intention to relocate all or part of their businesses in the EU or the US.

A third contextual issue relates to the labour market. The UK is operating at high employment levels and labour shortages are being experienced in several areas including planning, construction and property. The number of EU workers in the public services including transport, higher education, health and social care cannot be replaced quickly by others.  As in the agriculture and food industries as well as hospitality, where Pret a Manger have stated that only one in fifty job applicants are from the UK, there will be labour shortages. This will be exacerbated by the strength in Eurozone economies and the uncertainly for future EU citizens in the UK that have already started to influence inward migration from the EU. Labour shortages will lead to inflation and higher prices, already being forced up by the reduction in the pound since the referendum. In fact the UK has already lost the equivalent of many years’  worth of EU contributions through the loss of the £’s value. These economic circumstances will also have consequences for localities.

For planning, much environmental legislation is rooted in UN agreements delivered through EU legislation. We will need to see how the opportunity to work within common legal frameworks will continue – a point that the UN concern as the environment crosses borders. When we consider funding, then it is the funding for investment in transport, rural areas, flooding and regeneration through devolution and growth deals and loans from European Investment Bank that will disappear. While the EU funds approximately 50% of the growth and devolution deals, it is membership of the EU that requires their devolution. Through subsidiarity principles in the treaties, devolution in Scotland, Wales and Northern Ireland is at risk and the Prime Minister has already stated that a new devolution settlement would be crafted after Brexit that will not contain the same automatic devolution of powers. The First Minister in Scotland has already responded  to this in announcing a second independence referendum.

Finally, there is a considerable loss caused by not being part of the EU strategic spatial planning approach that is being developed for the 2021-2026 programme. This includes infrastructure encompassing the Trans European Networks core routes and projects such as the A14 and HS2. These are approved through European Council meetings, subsequently enshrined in EU legislation and then the principles do not have to be considered by the UK Parliament. The next scale of transport routes, the comprehensive network, is now about to be designated and the map of Europe will show a gap where these routes might have gone in the UK. The same is true of energy and waste projects, no longer supported by strategic programmes, funding and regulations.

Will the EU give the UK a good deal? It is difficult to say. So perhaps the last consideration will be, can Article 50 be withdrawn by the UK if it changes its mind? There is considerable legal debate about this but what is clear is that the process can be suspended. When we see the deal on offer from the EU, this may be a consideration particularly if the economic situation has worsened. Meanwhile, the 27 member states will be progressing a spatial investment plan for Europe, the Energy Union, be working together to deliver the Parts agreement on climate change and UN’s New Urban Agenda agreed at Habitat lll….

Janice Morphet

Janice Morphet