As the effects of the UK’s exit from the EU begin to take shape, Clare B Marshall considers the opportunities and threats in what are already testing times for the construction sector.
On 31 January 2020, the United Kingdom formally left the European Union resulting in a 13% decrease in the EU population and immediate impact on UK economy. The agreement signed with the EU set out the rules on a new partnership between the EU and UK. The rules cover areas such as travel and border controls, trade in goods and security - including agreements on cooperation to combat crime and terrorism.
Many of those who campaigned to leave the EU spoke about “taking back control” and “becoming a sovereign nation again” - emotive phrases which resonated with many of those who voted to leave in the referendum. It’s arguably too early to say with any degree of certainty whether the UK has benefited in any real sense from leaving the EU. There have been a handful of trade deals signed and the prime minister has hailed the return of the pint stamp on a beer glass as a big gain. In truth, the past two years of the pandemic has meant that politicians’ minds have rightly been focused elsewhere and not on realising a ‘Brexit dividend’.
Nevertheless, Brexit appears here to stay for the foreseeable and there are some ongoing challenges and issues arising from the UK leaving the EU - and some opportunities too, with emerging and refreshed international relationships.
Exacerbated by the pandemic, UK construction skills shortages have been made more acute as a result of Brexit and tightened immigration rules. This situation has been placed into even sharper focus by Covid-19, with many EU workers returning to their homes in the EU to work during the pandemic - some not returning to the UK at all. This loss - of a diverse workforce, skills and cultures - has significant implications for UK business, in particular the lost (easy) access to high-calibre emerging professionals. It is these very people who have been fundamental to the success of UK construction over recent years.
The approach to the ongoing challenges provides many lessons for us all, including on negotiating styles and skills sets. If the negotiations do not see critical issues being resolved soon, this could amount to a particularly negative effect on emerging professionals. The UK is also no longer part of a collective ‘EU perspective’ on the world stage and given the dynamics of geopolitics and the changes in global leadership, there is a danger that the UK might be worse off for that, with a risk of becoming increasingly insular.
As someone who lives and works in the EU, I can appreciate the benefits of a pan-European outlook and know that others do too. For those aspiring professionals looking to gain the wealth of experience available from EU countries, and elsewhere internationally, a change of approach and negotiating style is critical. We otherwise risk damaging the prospects of emerging professionals in the UK construction industry, the UK’s reputation in the world and the prospects of UK citizens more widely.
For many years, forecasters have predicted that Brexit brings big risk for business. What is clear - one year on - is that big risks for business remain. New trade rules mean that there is an inevitable increase in bureaucracy. New immigration rules and approaches will mean that many companies will find it harder to recruit the trained staff they need. There are clearly ongoing implications for ACE members and emerging professionals in particular and an increase in uncertainty and challenges when planning for the future. We are already seeing this with some of the supply chain issues which have been widely reported and which are set to continue into 2022.
Another key area is working with European clients and the dominance of European contractors successfully delivering major infrastructure projects around the globe. Developing and maintaining these relationships will require even greater care and attention as a result of Brexit.
But we should also see new relationships and opportunities emerging from Brexit which UK businesses need to be ready to embrace. Firms will need to be ever more agile, flexible and open-minded in order to identify the opportunities which may be available, whilst navigating the ongoing challenges. They will also need to ensure that they are well informed about the latest rules, regulations and official guidance that may impact their business.
So, challenging times ahead in what are already testing times for the construction sector and UK businesses more generally. But with Brexit here to stay, it is important for ACE and other industry bodies, UK business – and emerging professionals – to identify, influence and embrace the opportunities presented.
Clare B Marshall is the founder of the business consultancy 2MPy and is speaking at the ACE Emerging Professionals webinar, Brexit: One Year On - Exploring the impact on the construction industry, on Thursday 20 January at 12.30pm.