How Will British Water Survive Brexit?

In late June, a referendum vote was held in the UK to decide whether it should leave the European Union (EU). Fifty-two percent of voters opted for a British exit, or Brexit, setting the wheels in motion to negotiate a withdrawal with EU leaders, likely imposing stricter rules on who can travel to and work in the UK and limiting access to the Union’s single market economy.

While many of the details of Brexit are still to be decided, some financial implications have already begun to announce themselves. For instance, following the voting results the British pound fell to a 30-year low against the dollar, according to CNBC.

Amid uncertainty of how, or if, business will continue in an independent UK, British Water issued an announcement that it can help members navigate the new landscape. The trade association represents over 180 water and wastewater companies.

“We will further develop our established links with government organizations, such as UK Trade & Investment and UK Export Finance, and work with them to signpost our members towards the advice they need,” Lloyd Martin, the chief executive of British Water, told Water Online. “We will contribute actively to whatever discussion groups are set up across the industry to pool our knowledge with as many organizations and stakeholders as possible.”

While the full economic implications of Brexit will remain unclear until the dust settles, there is reason for concern in the water industry. The downgrading of UK credit ratings will likely have adverse effects on future investments in infrastructure. Martin said that the nation’s water sector had been anticipating improvements to flood and catchment issues and domestic retail competition, which may now be delayed.

Still, Martin remains optimistic.

“The world will always need water and the drivers of population growth and climate change do not go away,” he said. “The market will carry on.”

British Water does not anticipate any changes on the national side of its services, which include covering commercial interactions between its members and UK-based water operators and contractors. Likewise, the technical services it provides will carry on with minimal change. However, its international activities including seminars, workshops, and trade missions stand to be affected.

“Thirty percent of markets where our members are currently most active, or most interested in becoming active, are EU territories,” said Martin. “This percentage may well change.”

For the UK water industry, it’s possible that despite economic changes, Brexit will be a positive. Prime Minister Theresa May, who took office when David Cameron stepped down as a result of the referendum vote, has already made alterations to the nation’s Department for the Environment, Food And Rural Affairs (the equivalent of the U.S. EPA) and introduced a Department for Business Energy & Industrial Strategy. British Water sees this, along with forthcoming changes to the international export structure, as a positive sign for its clients.

“Some would see the uncertainty that Brexit will bring as being a negative, but in fact if we can provide additional stability at this time … then this can only help the supply chain,” Martin said. “It is important that water is not diminished in these bodies and British Water will continue to lobby for the sector at a governmental level.”

In times of turmoil, trade groups like British Water stand to gain, offering guidance and networking opportunities for member companies. It is unlikely that Brexit will be so stark as to shut down all trade between the UK and the EU, and domestic water use as well as markets outside of Europe should all remain stable. Still, the world will be watching to see how domestic businesses like the members of British Water handle a drastically altered landscape.

“The UK has a long history of deftly adapting to changing events, and British Water and its members will continue this tradition,” said Martin.