New planning bill could jeopardise UK’s trade deal with EU, ambassador warns

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Ripping up environmental protections will put at risk the UK’s free trade agreement with the EU, Europe’s ambassador has warned.

The Guardian understands Pedro Serrano visited the environment secretary, Emma Reynolds, this week and warned her that the planning and infrastructure bill going through the House of Lords could jeopardise the trade deal.

Access to the EU’s energy markets is also imperilled by the bill, representatives of the EU warned the government. This would be very difficult for the UK, which imports 16% of its electricity from Europe. The UK government estimates the deal will add £9bn to the UK economy by 2040.

The bill, which the government hopes will boost economic growth, removes EU-derived nature protections and instead allows developers to build on wildlife areas if they pay money into a “nature recovery fund” and commit to improve the environment within 10 years.

The EU believes its protections, which the UK used to follow, are stronger as they involve not harming habitats in the first place, and quickly replacing what is lost rather than making a vague long-term commitment.

EU negotiators have also noticed there are provisions in the bill for the Treasury to claw back the money from the nature recovery fund in some instances, meaning it is not fully ringfenced to protect wildlife.

The ambassador is understood to have warned Reynolds that the bill as it stands could flout the “level playing field” rules that underpin the free trade agreement. These rules state that the UK cannot regress on its environmental rules in a way that would give it a competitive advantage over the EU. The bloc believes this bill does exactly that.

EU representatives also raised this concern at a meeting with government officials earlier this month.

It has been noted by the EU that all the ministerial speeches about the bill have been about removing red tape to boost economic growth. EU officials say it will be hard for the government to argue the bill does not give it a competitive advantage in light of this.

Keir Starmer, the prime minister, has been trying to start a “reset” with the EU, to remove friction for trade and undo some of the damage to the UK economy caused by Brexit.

Ben Reynolds, of the green thinktank IEEP UK, said: “It is understandable that the EU has concerns that the planning bill as it stands regresses on the commitments the UK made when it left the EU to maintain similar levels of environmental standards, and in this case nature protection.

“There is no clear argument around removing these protections as the bill currently threatens, but the case against is strong if it jeopardises the government’s nascent work to rebuild relationships with the EU. The economic case is clear for closer cooperation with the EU, be it on energy markets or other aspects of policy that would remove trade barriers and benefit British businesses and our environmental standards.”

Earlier this year, the EU met the UK to discuss participation in the electricity market. As part of these discussions, there was an understanding that the UK would align with relevant environmental protections concerning the building of electricity infrastructure. However, the bill would remove these to make it easier to build renewable energy, and the EU currently understands the bill as lowering environmental protections for the benefit of energy generators.

A government spokesperson said: “The planning and infrastructure bill will not regress any environmental standards – it will deliver a win-win for nature and development. Environmental delivery plans will secure better environmental outcomes that go further than current legislation which simply offsets harm, and money from the nature restoration fund is ringfenced for nature under clauses in the bill. We are committed to the EU-UK trade and cooperation agreement and ensuring our mutual high standards are protected.”

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