The question of whether the UK should remain in the European Union is a classically polarised debate
When it comes to public opinion, the question of whether the UK should remain in the European Union is – as is fitting for an issue subject to a yes/no referendum – a classically polarised debate.
Notwithstanding the government’s current renegotiations over the terms of the UK’s membership, which seem more a PR exercise for David Cameron than an attempt to secure radical change, those who have a view on the subject are both clear cut and usually vocal - whether they’re on the pro-European or eurosceptic side of the channel of opinion.
The same vocal polarisation is true of economists; with the majority, according to research carried out by the Financial Times earlier this month, concerned that Brexit would inflict significant damage on the UK’s economic health. But the construction sector, which, at 6.5% of GDP, is intrinsically linked to the wider UK economy, has so far remained almost eerily silent on the issue.
There is an understandable reluctance among individual business leaders in any sector to speak out publically on politically sensitive issues, particularly if their company’s work is, in part, directly financed by the public purse. But construction’s reticence on the issue - with the occasional notable exception, such as JCB’s staunchly eurosceptic chair Anthony Bamford - is starting to sit at odds with the more vocal debate emerging from other sectors. And it’s not beyond the realms of probability that this could come back to bite it.
Despite Bamford’s forthright opposition, it seems that the majority of the industry back the union - or at least don’t want out. A recent survey by accountancy firm Smith & Williamson showed 85% of construction and real estate companies favoured continuing membership. This support is in line with the case put forward by business representatives in general for remaining in the EU – the CBI estimates “conservatively” that leaving would result in a net negative impact on the UK economy of 4-5% of GDP.
The potential damage to inward investment and trading relationships that has fuelled the CBI’s stance would, if its economic predictions are correct, have a direct impact on construction, predominately in the fall in demand for property from multinational businesses.
The wider economic picture that would accompany Brexit of course remains a leap into the unknown - and therefore a realm of speculation. There are those who believe that the UK would have better trading relationships than those the CBI envisages after an exit, although this seems politically unlikely. But even if this were the case, there are other consequences of a withdrawal that would have a disproportionately adverse effect on construction compared with other industries.
The most obvious of these is the impact that the restrictions on movement of labour, which would accompany an exit, would have on the industry’s ability to service its pipeline of projects. The UK sector draws a sizeable portion of its workforce from outside the UK, and has an obvious requirement for a transient workforce, able to move location and be scaled up or down according to need.
As Arcadis’ Simon Rawlinson points out in our news analysis, with overall unemployment just over 3%, it’s hard to believe the industry’s skills shortages could be addressed internally. Meanwhile, it’s also unlikely that Brexit would result in much loosening of the red tape of regulation around the industry, despite this often being cited as a reason to say goodbye to Brussels. So, the industry could find itself trapped in a double bind: a list of onerous standards to meet, and even fewer people helping to deliver to them.
If 85% of the sector buy into arguments like these, the silence so far may suggest that they are confident that passive resistance to change will prevail, and the referendum will end with the UK staying put without the industry taking a stand. But, after the Conservatives’ unexpected outright victory in last May’s election, and in the week that publication of a polling industry inquiry again highlighted the failure of pollsters to predict that result, it’s worth remembering that votes are not always obvious to call. And the risk to the industry this time round looks too great to sit back and leave it to chance.
Sarah Richardson, editor