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Five key implications of Brexit for planning, infrastructure and development

  • United Kingdom
  • Brexit
  • Competition, EU and Trade - Brexit
  • Real estate planning
  • Energy and infrastructure
  • Real estate sector


The outcome of the vote in favour of leaving the EU will undoubtedly have far reaching implications, but what does this mean for the UK planning system?

We have not rushed to comment upon the planning and environmental implications of the vote to leave the EU and have taken time to reflect on the emerging position. We have, in this process, identified 5 key issues:

1. Transport and Energy Projects

At the outset, it is important to recognise that nothing will change in terms of the function and operation of EU legislation until the UK leaves the EU. As such, much of the immediate impact of the vote will be a product of business uncertainty. This is likely to persist to a lesser or greater degree until discussions with the EU have meaningfully progressed.

The vote to leave the EU will inevitably impact to some degree upon a series of energy and infrastructure schemes until negotiations have progressed and a clear strategy has been settled which maintain a policy and funding commitment to these projects. These arrangements will have to focus upon the funding structures which support transport and energy projects under the existing TEN-T and TEN-E Regulations. The most visible and early impact will be in the promotion of local schemes, such as city tramway projects, which are supported as TEN-T projects and require the provision of funding statements to justify the compulsory acquisition of private land interests.

We know, however, from our direct involvement in the successful promotion of cross-boundary planning projects with non-EU countries that these arrangements can be put in place and that they work to good effect in the delivery of the most complex infrastructure projects. There is now every good reason for local authorities, utility companies and project promotors to join forces to press and lobby Government for early certainty as to these arrangements and to ensure that these obviously important projects are safeguarded.

2. Commercial and Residential Development

We are undoubtedly entering a period of market uncertainty. There must, however, be some prospect that low borrowing costs and a depressed pound will make the UK an attractive home for investment and this will build as confidence returns and the prospect of a workable deal is secured with the EU. We have every expectation that the Government will do all it can to prop-up the UK housing market, not least because voter confidence and the stability of the UK market is so directly linked to certainty and security in the housing market.

There is good reason particularly for optimism in the housing market given the substantial shortfall in housing provision when set against clearly established need. We know also that the Office for National Statistics projections have adopted very cautious estimates as to net in-migration for the long term and with this very cautious estimates of population and household growth for planning purposes. Although the ONS did not explicitly take account of Brexit, there is no evidence whatsoever to support the notion that leaving the EU will see a reduction in migration of a scale that would be necessary for population estimates to fall below projected levels and, importantly, for housing projections to change in any way, shape or form.

We have already seen very early signs of that confidence in the real estate investment market and also a very strong indication that the strategic housing market is very much alive and kicking.

3. Incorporating EU Legislation

We can be certain at the point of departure from the EU that EU Regulations and EU Directives implemented by secondary legislation (for example, Statutory Instruments) under the European Communities Act 1972 will no longer have effect in the UK unless the UK Parliament introduces UK legislation or amends the ECA, to the contrary. It is also clear that any separate Acts of Parliament implementing EU law will remain in place until the UK Parliament decides which should remain, be repealed or superseded. The review process in determination of which EU laws should continue to be applicable in the UK will take many years. As time goes on there could well be an increasing divergence between EU and UK law.

As such, the process of change to legislation as we move out of the EU structure will require the transition of a very large body of European legislation into a domestic structure. This is a mammoth task, whether or not there is any intention to refine and adapt large tracts of planning, building control, habitat and environmental law. In the interim, nothing changes until the UK actually leaves the EU. During the negotiation period, the strict legal position is that the UK and businesses operating in the UK must continue to comply with EU law and EU law will still be enforceable in the UK. However, as a number of commentators have suggested there could be a ‘go slow’ in relation to the implementation of new EU laws during the negotiation and withdrawal period.

It is also the case that any judgments of the Court of Justice of the EU which have been reflected in subsequent UK law, including in UK court judgments, will continue to apply until the UK Parliament or UK courts decide otherwise.

It will be interesting over time to see what will change from a planning perspective and whether, for example, the Habitat Regulations, are diluted in any way. It will also be worth watching emerging legislation from the EU and, for example, the Government’s enthusiasm to bring forward the new changes through the amended Environmental Impact Assessment (EIA) Directive (2014/52/EU).

The opportunity to dilute and move away from some of the strictures of this legislation can only be welcomed by developers and local authorities in equal measure and now, more than anytime before, is a critical moment to develop those arguments and to start the process of lobbying for change.

4. UK Legislation

The whole process of legislative change will take up a great deal of Parliamentary time and will also be a heavy burden upon already stretched civil servants. We can only really expect that new planning, building control and environmental legislation will be delayed, and it must also follow that secondary legislation will in some way stagnate. It would, for example, be interesting to watch the progress of the Neighbourhood Planning and Infrastructure Bill and if some of the regulations ever emerge as part of the Housing and Planning Act 2016.

We expect that for most developers and local authorities it would be a welcome moment of tranquility to not have to grapple with yet another piece of planning legislation and this pause in the onslaught of legislative change might also allow the current system to settle down.

5. Political Change

The political fallout of the decision to leave the EU is very much in transition but the current leadership frontrunners have expressed very different views on key UK projects and policies. The outcome of this process may well impact on residential schemes, green belt release, the northern powerhouse initiative, key infrastructure delivery and the development of a clear UK energy programme. It will, for example, be interesting to see if a decision on a third runway at Heathrow is delayed and whether there is a continued commitment to new nuclear development.

Again, some of these outcomes might be quite positive for the development industry. We would, for example, expect that the demise of David Cameron's starter home initiative would be welcomed in almost all quarters and would help remove this further burden upon the delivery of much needed housing.

We also know from very recent events that prospective leaders are quite capable of abandoning previously strident views in response to changing circumstances and it may well be that their earlier resolute objections to certain projects and policies dissolve away when they have to stand in front of the despatch box in leadership of the Government.