The construction industry feels sidelined by the government in its vision for Brexit, complaining that ministers just aren’t listening. But is the sector itself partly to blame for failing to present a clear and unified voice?
In less than seven months the UK will sever its formal ties with the EU after more than four decades of close co‑operation – some would say too close – in order to “go it alone”.
Ever since Article 50 was triggered 18 months ago, UK government negotiators have been in locked in talks with their opposite numbers in Brussels over what will be the terms of the country’s relationship with Europe come Brexit Day on 29 March next year. But these discussions have been tortuously slow and seem to have yielded little. With the clock ticking, there urgently needs to be more meaningful progress towards a deal on which all sides agree.
While there have been calls in certain political circles for a “no-deal” exit, the construction industry is clear that leaving the EU without a deal would be disastrous for the sector – with a worsening of skills shortages just one of the likely negative effects.
“While we’ve had some good conversations, there isn’t much coming out the other side”
Alan Vallance, Riba
So with only months to go before the UK economy steps into the unknown, the charge is that ministers have not acted adequately to enable construction firms to plan for the outcome of Brexit and reassure them that leaving the EU – deal or no deal – won’t leave them out of pocket, bereft of the investment, staff and the materials they need in order to build the homes the country needs and the infrastructure to go with it. But while the government clearly has its critics, some are asking what the industry has done to make its voice heard. How has it tackled the issue of Brexit? And how has it engaged with ministers to get the reassurances it says it wants?
A sense of abandonment
As part of Building’s new campaign – Building Without Borders: Construction Needs a Deal – we recently polled the sector for its views on Brexit and on the government’s negotiations with Brussels. The findings reveal an industry concerned that ministers have cast it adrift, seemingly to focus instead on sectors that are of more obvious appeal to the electorate though of less economic importance, such as fishing.
The results of Building’s survey of more than 600 individuals suggest many feel abandoned by ministers, with 65% believing the government is not interested in getting the construction sector a good deal. Just one in 10 thought it was.
Survey respondents seemed to be struggling to believe the industry is even a consideration for ministers, as we approach Brexit. One said: “I have seen no evidence to suggest the impact of Brexit on construction has been considered by our negotiators.”
Lack of communication from Westminster had put the sector on the back foot, argued another: “The system seems murky and non‑transparent. We feel the government should have held consultations with businesses and understood more about what the people want and don’t want.”
Don O’Sullivan, Galliard Homes’ chief executive, agrees, not least because of fears of a depleted industry workforce from next March. “Brexit will trigger an employee shortage in the construction sector as European workers won’t be replaced and others may leave as we exit the EU. No one in government is advising us,” he says.
When asked by Building for a response, the Department for Business, Energy and Industrial Strategy said negotiations regarding a future economic partnership with the EU, including on trade and customs arrangements, were “ongoing” and pointed to the recently published series of technical notices it said gave advice to firms on a range of issues, including customs procedures. Yet none of these were specific to construction, unlike for farming and other industries.
The Department for Exiting the European Union, when asked what it is doing to prepare the construction sector for Brexit – and for its response to claims that it had effectively sidelined the industry – responded in a statement: “On 12 July 2018, the government published its white paper setting out a clear proposal for the future relationship we want to build with the EU.
“Since it was published, ministers and officials from across government have been travelling up and down the country talking to people, businesses and organisations about its contents. We will continue our extensive engagement throughout the Brexit process.
“In the white paper, we set out proposals to ensure continued frictionless access at the border to each other’s markets for goods.”
The government says that while freedom of movement will end, the UK will still welcome the brightest and best to its shores. This may cater for university-educated high-flyers or those with a few million pounds to invest in the UK, but it’s less clear where this leaves site workers from eastern Europe coming here to help us build the new homes, schools, hospitals and infrastructure the country needs.
Lack of understanding
While the government stands accused of having little constructive to say to the industry about Brexit, what about the industry’s own efforts to persuade ministers of the need to recognise construction in the debate? Gleeds chairman Richard Steer believes these have been lacklustre.
He argues that while construction has been ignored compared with sectors such as farming and the automotive industry, the lack of a strong voice from our industry is disappointing.
“Some trade bodies have spoken out, but the industry needs to be much more focused. Leading industry groups need to be beating a path to the door of Number 10,” he says.
But talks are taking place. The RIBA’s chief executive, Alan Vallance, says there has been a positive engagement between the architects’ body and various ministeries through forums such as the Creative Industries Council. Vallance himself has attended about 100 meetings with Whitehall officials over the past two years, “wearing out shoe leather”, as he puts it.
Since EU citizens make up one-fifth of registered architects working in the UK, Vallance says it is urgent to get certainty for them. He would also like to see arrangements put in place sooner rather than later for UK practices to be able to work in the EU after Brexit.
But the omens for obtaining such assurances aren’t great, it seems. Vallance says: “While we’ve had some good conversations, there isn’t much coming out the other side. There are seven months to go before we officially leave the EU, and there has been little in the way of specifics around areas like mutual recognition of professional qualifications.
“I’ve no doubt that practices will make the best of whatever Brexit turns out like. But no one likes uncertainty, and it would be much more helpful if we could get more [from ministers] in the way of detail,” says Vallance.
For its part, RICS has collaborated with the RIBA, the Chartered Institute of Building and the Royal Town Planning Institute in a series of talks with ministers. But such discussions have not brought the government any closer to making clear its position on the construction sector post-Brexit, says RICS policy manager Hew Edgar: “We want to work with the government to make Brexit work, but the information we’re getting is neither clear nor timely.”
As Edgar points out, the revolving door policy for ministerial posts is not helping the situation. “We had a series of roundtable events with Greg Hands, the then-minister of state at the Department for International Trade, where we discussed the importance of the built environment. We felt we were getting somewhere, so it was a shame when he resigned [in June 2018],” he says.
“We hope to be meeting up with his successor, George Hollingbury, soon,” he adds.
Simon Rawlinson, head of Strategic Research and Insight team at Arcadis and a member of the CLC, says that discussions about Brexit have been taking place to the same degree as other industries. He says: “The CLC is working with government to mitigate some of these issues. We’ve made our points clearly about a number of areas [labour, investment, supply chains] and the industry has worked in a collaborative way. But there are huge number of things that are currently unresolved – and currently unresolvable.”
Trade body Build UK, meanwhile, has joined forces with the CBI, throwing its weight behind the employer’s organisation’s stand on issues such as freedom of movement and the employment of migrant workers.
Suzannah Nichol, Build UK’s chief executive, says: “Every meeting and discussion we have with government is framed by Brexit. My team at Build UK works closely with the CBI and the heads of the other major sectors, as while there are some sector specific issues the majority of concerns are shared across the business community. We are pushing ministers and officials hard for certainty and clear policy that will help our members keep Britain building.”
Ann Bentley, global board director of Rider Levett Bucknall and a CLC member, agrees that the CBI – which has its own construction council – is one of the industry’s best bets for putting its message across. “It’s getting the most access at a sensible level and has regular meetings with government,” she says.
Bentley also believes there is a “huge amount” of informal discussion going on with ministers and Whitehall mandarins.
But she questions whether the sector itself is paying the attention it should to Brexit: “The industry is doing quite well at the moment with a number of companies making a decent profit. We’re going through a reasonably good period and one might say that perhaps some have taken their eye off the Brexit ball.”
But some still share Steer’s concerns regarding the fragmented nature of the construction industry’s dealings with government, and whether those in the sector are doing enough to push their case.
Liberal Democrat peer Lord Andrew Stunell, a former building regulations minister and an ardent opponent of a hard Brexit, says exiting the EU is “a clear existential threat to the construction industry”, and while the government might point to its links with the sector through the CLC, “a lot of people in the industry feel distanced from the work [the CLC] is doing”.
Stunell points to industries such as the automotive sector, which has effectively gained the ear of ministers through its own body, the very vocal Society of Motor Manufacturers and Traders. “I’d like to see more positive signs from the CLC that it is grasping the issues and that it’s holding its end up,” he says.
He suggests the industry might consider a more grassroots approach to influence the government on Brexit: “If [the CLC] says it’s doing its best but it’s not being listened to, then the industry needs to take advantage of its national reach.”
As there is construction work in every constituency in the country, perhaps the industry’s 90,000 or so companies should reach out directly to their local MPs to press their argument. “A very powerful case is there, waiting to be made,” Stunell says.
“The government has not yet gripped what needs to be done, particularly around rules and regulations, and time is slipping away.”
Others take a less proactive, but perhaps more pragmatic view. Redrow chief executive John Tutte says he and others “would like to see some clarity as to where we are at, and while you have uncertainty, you always have caution.
“We don’t want a really bad deal, but you have to have a point where you need to be in a position to get up and walk away. You would hope common sense will prevail. The EU needs a deal as well.”
And Colin Lewis, chief executive of Chesterfield-based housebuilder Avant Homes, acknowledges the level of detail from government has been inadequate, but wonders what ministers are supposed to do. “Yes, I want to see more clarity but I also appreciate that the government doesn’t want to give too much away when negotiating.”
Lewis thinks the House Builders Federation has done a “cracking job” of representing the sector’s interests when dealing with Whitehall, but he also believes ministers might have more on their plate than worrying about what housebuilders think.
“That said, I share the concern around the level of uncertainty and I’m very supportive of a drive for greater clarity about what’s going on. But honestly, I don’t think the government knows either.”
Building is running a campaign, Building Without Borders, to highlight the industry’s concerns about the chaos that a disorderly, no-deal Brexit could bring. We want the government to come up with a deal that is good for the sector and by extension good for the country as a whole.
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