A year after the UK decided to leave the EU, the Brexit negotiations have finally started
A year ago today, the UK voted to leave the EU by 52% to 48%. The shock result, which defied opinion polls, also defied the consensus view in construction. Research carried out by Building ahead of the vote showed two-thirds of the industry in favour of remaining; frustrations over procurement and EU legislation were clearly outweighed by fears that leaving the EU could cause market instability and make it harder for construction to secure the workers it needs. So, are those fears founded?
This week, the UK began talks with the EU over how exactly Brexit will work: negotiations that stand to have far-reaching implications for the industry, as well as the economy as a whole. A “hard Brexit” – favoured by the government at least until the Conservatives failed to achieve a majority in this month’s election (the UK’s latest shock vote result) – would leave the sector with an even greater skills gap than it has already, given that upper estimates put the number of its EU workers at almost 200,000. Meanwhile, if the UK is to rescind its trade agreements with the EU, any replacement deals with the union and other states will make a huge difference to the cost of importing and exporting materials.
These talks are scheduled to last almost two years, and until they are concluded, in one sense nothing will change: the UK remains part of the EU, and all current agreements and laws apply. But despite this, the 12 months since the vote have already seen some significant trends emerging for the sector.
One tangible impact already being seen is on migration. The number of people coming to the UK from the EU’s so-called accession states – the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia – dropped by a third last year to 48,000. Meanwhile, the number from these countries leaving the UK soared by 59% to 43,000 – almost as many as those who arrived. These states are the sources of most of the UK’s EU construction labour. We explore these issues here.
Behind these statistics, of course, are thousands of individual personal stories. While the legal status of EU workers in the UK so far remains unchanged, the vote brought with it a wave of uncertainty for people who had come to consider the UK their home, and their future. And in some cases, it sadly did more than that: the vote was used by some to “legitimise” attacks on those whose background differed, or appeared to differ, from their own. As Eugenie Bliah, a French project architect with Cullinan Studio, said this week: “Something in the atmosphere has changed.”
As part of this week’s Brexit special coverage, Bliah and other EU nationals working in the UK construction industry tell us about their year since the vote. Despite the challenges they and their compatriots face, one hugely encouraging pattern that emerges from their stories is the actions their employers are taking to secure their futures – with offers of sponsorship and other assistance – and their emotional wellbeing. One company, for example, wrote an open letter to its EU staff to detail the reasons why their expertise is valued. It may seem like a small gesture, but for those affected, it is an important one.
Firms’ ability to continue using EU staff will, of course, ultimately depend on the nature of the deal the UK government strikes over Brexit – both for any transitional period and for the longer term. And the employment security they can offer will also depend on the overall health of the sector. Here, as we explore, there is cause for concern for those reliant on commercial projects, with several sizeable schemes dragging due to market uncertainty.
If this trend continues – as forecasters believe it will – the impact it will have on the sector overall will depend on the government counterbalancing any drop-off with infrastructure and public sector work. Capita’s Richard McCarthy and Liberal Democrat peer Lord Andrew Stunell address these issues. And you can also get involved: by supporting Building’s Better Brexit campaign, you can help us to make the economic case to Whitehall for investment in these areas, and for transitional arrangements over importing skills.
Meanwhile, as our campaign details, the industry needs to work to reform its own training schemes, and invest in techniques that will improve productivity and ultimately reduce the demand for labour.
If it can do these things, then Brexit – for all of the challenges it brings – might also prove the unexpected catalyst for change that would put the sector on the front foot – if not just yet, then at least in years to come.
Sarah Richardson, editor