The noise from Westminster on the decision dubbed “one of the biggest in our lifetimes” by Cameron has only built as the week has gone on


When David Cameron set a date for the EU referendum on Saturday, it sparked a scramble for MPs to declare their stance on the debate - whether immediately, or slightly more theatrically after a few days of “heartache”, in the case of the London mayor (for even thick-skinned politicians like Boris will have their consciences pricked when making blatant grabs for the biggest job in the land). The noise from Westminster on the decision dubbed “one of the biggest in our lifetimes” by Cameron has only built as the week has gone on. And coming from a sector intrinsically tied to the country’s economic and political fortunes, it is time for construction firms, until now virtually silent in the debate, to take a public stance.

Building reported in January that, although research from accountancy firm Smith & Williamson suggested 85% of construction and real estate firms backed continuing membership, there were less than a handful of firms willing to speak out publicly on the issue on either side. Much of this could be attributed to firms’ traditional reluctance to align themselves with politically sensitive issues, particularly as for many their work is in part financed by the public purse. But there were also signs that a worrying proportion of the industry simply did not feel they had enough information to take a view either way.

Our own poll, conducted in the week following publication of that feature, gave cautious backing to EU membership - but, crucially, also highlighted a lack of understanding of the implications of the decision on the sector. Fifty percent of firms thought that leaving the EU would damage the UK construction industry, compared with 39% who did not; a very sizeable 11% did not know.

It is arguable that the final terms of the UK’s reformed membership of the EU, were it to remain within the union, will do little to change the impact on the sector of either remaining in the union or leaving it. There is an explicit commitment from the union to take “concrete steps towards better regulation”, which is intended to allay fears over red tape, but there is little detail behind it. Similarly, the planned “red card” system, making it easier for governments to join forces to block unwanted legislation, in theory may ease concern over the UK having rules imposed on it by Brussels - but in practice, it’s hard to tell whether the mechanism would be triggered without legislation already having been abandoned at an earlier stage.

Of more fundamental concern to businesses trying to work out where they stand is the difficulty in judging the impact of Brexit on the overall economy, and on trading relationships. The CBI has predicted that, “conservatively”, leaving would result in a net negative impact on the economy of 4-5% of GDP, due largely to the potential damage to inward investment and trading relationships. This would have a clear impact on construction, particularly in the fall for demand for property from multinational businesses. Some believe these trading relationships would be far better than the CBI predicts - but this will remain unknown unless Britain does pull the plug on the union.

There are other impacts on the industry which are easier to predict. The restrictions on movement of labour, which would almost inevitably damage the UK’s ability to use migrant workers to plug its skills shortage, is one. And despite the often made link between Europe and red tape, it appears unlikely that Brexit would really result in much of a reduction for contractors in particular, as much EU regulation has already been incorporated into UK building standards. These would be unlikely to be relaxed if the UK wants free trading arrangements with the rest of the bloc - which even the strongest opponents of the union believe should be protected.

On Tuesday this week, a small but powerful group of construction and property companies - Mace, Carillion, British Land and Canary Wharf Group - joined counterparts from other sectors as signatories to a letter backing continued membership of the union.

Over the coming weeks, Building is calling on other companies to follow this lead and actively join the debate, as we launch an editorial initiative to empower the sector’s firms to clarify their position, and to ensure that the industry has its voice heard. Whether to stay or leave is a question which will have a deep impact on the sector’s future for decades to come, and construction must not watch from the sidelines as it unfolds.

Sarah Richardson, editor