What if Brexit really means Brexit for construction?

We’ve all heard what Theresa May had to say on 17 January 2016.  The UK Government is preparing the country for a hard Brexit and the decision of the Supreme Court in the Gina Miller case earlier this week is unlikely to be more than a small hiccup in the process.

The mainstream press is flooded by articles and opinions of what may or may not be in store for us in the next few years with perhaps not enough focus on the construction industry.  The construction specialist press and industry bodies have of course been very alive to the impact of Brexit on construction (which accounts for circa 6.5% of the UK’s GDP) and specific concerns have been voiced in particular regarding restrictions on the free movement of people.  At the moment, 27% of construction workers in Greater London are EU citizens, according to the Office of National Statistics and some evidence suggests that this percentage may be as much as three times higher in the London house building market.  There clearly was a skills gap that the 27% (or more) have filled and will continue to do so for a couple of years.  The likelihood is that a work visa system will be re-introduced and may be embraced at a potentially significant cost by some of the stronger players in the market.  For those who do not want to or cannot go down this route, there is little hope that home grown talent will be attracted any time soon to put themselves forward and  pursue a career on construction sites. 

The Government has done very little to incentivise, educate and make construction attractive to young people.  So what next?  We all know about the ambitious plans for the third runaway at Heathrow, the million homes to be delivered in the next few years, HS2, Crossrail 2, to mention but a few of the grand projects that will be more costly and more time consuming in a post-Brexit age.

In recent months a lot of effort has been put in by various groups to raise the construction alarm with the May Government and put the industry’s interests at the forefront of the exit negotiations map.  A couple of campaigns aimed at gathering information from those who will be most affected and potentially getting a special deal for construction labour include:

• Building Magazine which have launched a survey, ‘Building a Better Brexit’, in support of an inquiry led by Lord Andrew Stunell into what should be the Government’s negotiating brief for the construction industry (www.building.co.uk/Brexitsurvey); and

• The All Party Parliamentary Group for Excellence in the Built Environment which is looking at the impact of Brexit on future skills needs in the construction industry and the built environment professions.  Industry players can have their say and influence the outcome of Brexit on the skills gap.

So watch this space or even better get involved if you have a vested interest. 

In the meantime, some contractors and consultants may have started to spot opportunities across the pond, where huge projects, like multi-billion dollar walls, may be in the pipeline.

Further information

To find out more about the issues raised in this blog, please contact a member of our Real Estate team.

You may also wish to read some of our other blogs about Brexit and what it may mean for you, your family and business.

About the author

Brandusa Tartaru-Marinescu was a Construction Partner in our Real Estate team.