Utilities and environment services

Encompassing vital services such as water supply and sewage, waste disposal and recycling, telecoms and broadband, the UK utilities and environmental services sector supports consumers and businesses in every other industry. Many of the expected potential effects of the vote to leave are long-term rather than immediate, and are mostly related to the effect on long-term investments. There are opportunities as well as concerns for businesses in this sector.

Key stats

  • 414,000 employees
  • £46.9 billion GVA (2.8% of total GVA)
  • £6.4 billion exports
  • £4.7 billion imports
EU Trade: A barrier-free and tariff-free relationship with the EU is important to this sector

Given the public-facing nature of utilities and environmental services – both directly servicing the consumer and public bodies – there is a significant motivation to keep costs as low as possible. However, if the UK is unable to secure a tariff-free relationship with the EU, there are concerns about increasing costs. There may be direct increases in the costs of exporting waste, for example, if the UK does not secure a new deal with the EU. There may also be rising expenses found in the supply chain of the infrastructure that supports utilities and environmental services – such as the cost of stainless steel.

Many companies within this sector seek to provide services and expertise on an international basis, including with the EU. There are concerns that, outside the EU, UK businesses will be unable to provide these services on a preferential basis and will face numerous non-tariff barriers.

Regulation: As a highly regulated sector, businesses in utilities and environmental services are seeking stability and certainty

The EU plays an important role in regulating utilities and environmental services businesses – and high quality regulation and enforcement in this area is vital, as it protects public health. Currently, the EU is the source of numerous regulations around areas such as energy, clean water and telecoms. There are also numerous environmental standards that are agreed at a European level. These regulations and standards are complex, detailed and comprehensive – covering everything from the end of life disposal of vehicles, batteries, asbestos, fridges and fertilizers. In the short-term, these regulations should be upheld in order to provide certainty for businesses. There are areas where the UK could seek a more flexible, tailored regime in these areas – however, this is a long-term objective.

Additionally, there are numerous international regulations that are important to this sector, particularly related to the environment. The EU currently plays a role in the implementation of these regulations. For example, the EU – rather than the UK – is a signatory to the international agreement governing the safe recycling of ships. Additionally, the EU Waste Shipments Regulation implements international requirements agreed at Basel level regarding international transportation and disposal of hazardous waste. It is important that these obligations are upheld, and that regulatory stability and clarity is secured as soon as possible to remove uncertainty in the industry.

Funding: A new deal for infrastructure funding should be long- term and meet local needs

The EU is currently the source of significant amounts of infrastructure funding, particularly for telecoms. For example, in July the European Investment Bank recently provided €21million for broadband in the UK. A new funding deal for vital infrastructure such as the UK's telecoms system should be designed in partnership with business, with long-term need at its heart.

Exit: A smooth exit is needed to ensure regulatory certainty in the utilities and environmental services sector

It will be important to ensure the UK's exit from the EU is a smooth one to maintain a stable regulatory environment. Initial transposition of regulations is one way in which the Government can go some way towards securing this for this sector. But business remains concerned about the potential risk of challenges to existing interpretations of the law if this process leaves some regulatory uncertainty.

Our members say

"As a largely domestic sector, we expect to be largely shielded from any short-term effects. We expect the UK government will continue to commit to the high standards that protect public health in the water industry." - water supplier

"We'll be paying close attention to the future of environmental standards and regulations in the UK. The benefit of any changes will have to outweigh the costs of implementing those changes." - medium-sized environmental services company

"Our priority is keeping costs as low as possible for consumers." - water supplier
Our partners have more information:
  • WaterUK

For utilities and environmental services at the CBI, contact Lara Robinson on 0207 395 8040 or Lara.Robinson@cbi.org.uk

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