A No Deal Brexit will hit construction hard, but the industry needs to prepare for it, says Construction Leadership Council chair Andy Mitchell.
On Monday this week (28 January 2019), the Construction Leadership Council (CLC) convened a meeting of over 100 leaders of the construction industry, as well as major clients, at the Institution of Civil Engineers, to discuss how the industry could plan for the UK leaving the EU without a formal agreement – often called a “No Deal Brexit”. In a fragmented industry, it was good to see firms from product manufacturers to professional services, large and small contractors, trade associations and government representatives sharing their thoughts on how to address this common challenge.
A No Deal Brexit would hit our industry hard. It would affect over £10bn of the products we import and around £5bn of those we export, our ability to recruit and retain the 13% of the construction workforce – or the 30% in London, who are foreign nationals, most from the EU, and the regulation and certification of construction products. Firms would be affected, regardless of whether they are large or small, or their place in the supply chain.
The prospect of the UK leaving the EU without a formal agreement is unlikely. It is probably less likely than most other outcomes. But whilst it remains a possibility, a responsible construction industry has to prepare for it. We owe this to those who work in our firms, our clients and to our own suppliers to ensure that we understand what the key risks are and act to mitigate them.
We will be following up the conference with specific actions. The CLC will convene a group to address support for foreign nationals working in the sector, and to engage with the consultations on the government’s immigration white paper. We will also work with trade associations and other bodies to understand the impact of changes to the rules on the import and export of goods. The Construction Products Association will develop guidance on potential changes to the rules on demonstrating compliance with product regulations. Finally, the CLC will ensure the government is aware of the cost and complexity of mitigation and the potential impact on the sustainability and productivity of the industry. The CLC will be setting out detailed plans for follow up action shortly.
Individual firms should also start the conversation about this issue with your own suppliers and clients. Do they know where materials come from? What plans do they have to manage delays? Have they decided how to handle the costs of those delays? By having these collaborative and open conversations now, we can ensure that we are prepared as possible, throughout the supply chain.
The past year has seen genuine collaboration across the industry on a range of issues. The development of the Construction Sector Deal, and more recently, the collaboration between nine trade associations to identify those occupations that should be included on the Shortage Occupations List, demonstrate this is an industry that can work together across tiers and subsectors to deliver what is in our collective interest.
We need more of the same behaviours in relation to planning for a No Deal, and for the future challenges alternative Brexit outcomes may bring. I am looking forward to continuing this discussion with the industry.
Andy Mitchell is the chief executive of Thames Tideway and the chair of the Construction Leadership Council.