Brexit Conference

Mitch Gee – INCA Chairman

I recently attended a Brexit Conference organised by the Construction Leadership Council. I was invited by Build UK, who, along with the Construction Products Association are assisting the Government in trying to assess the negative impact of Brexit on the construction industry. Further they are working to establish the actions which are required to try and mitigate this impact.

The event was informative, though there was an air of impending doom. This not an unreasonable, as the construction industry along with the rest of the UK should be expecting the best but preparing for the worst.

The impact of Brexit on the construction industry is anticipate broadly as:

  • Tariffs
  • Labour
  • Logistics
  • Accreditation of products

Tariffs:

Fortunately for the construction industry, should there be a no deal Brexit, the tariffs on most construction products are relatively small, and variations in the currency exchange will have a greater impact on prices.

Labour:

Labour is well protected, and any EU national who has lived in the UK for more than 5 years will receive settled status. The scheme will open fully by 30 March 2019. The test phase of the scheme is open now, but you must meet all the requirements to apply. The deadline for applying will be 30 June 2021, or 31 December 2020 if the UK leaves the EU without a deal. Those who have lived in the UK for less than 3 years will receive pre-settled status and will be able to apply for settled status once they have been a resident for 5 years. There was initially going to be a cost for this application but this fee has now been waived.

After June 2021, only EU national with qualifications equivalent of NVQ level 3 or better will be allowed to work in the UK. These restrictions for entry already mean that we are seeing a reduction in immigration or EU national returning home due to uncertainty in the future. This is likely to accelerate due to a weakening of the pound which would accompany a no deal Brexit. It is important that employers make clear the rights of their EU national employees: they are still welcome and legally entitled to be here. The Governments’ position on this is clearly stated, and employees should be directed to the website below for clarification and the position as it stands currently:

www.gov.uk/settled-status-eu-citizens-families/applying-for-settled-status

Logistics:

The biggest worry is how UK ports will cope and what delays might ensue.  Nobody knows. Docks like Tilbury have large land areas in which they can store containers and create warehousing. It will be much more challenging at the Eurotunnel where there is virtually no infrastructure for this except backing lorries up the M2. No one knows what will happen, but the BEIS representative indicated that there is a potential for some products to be delayed for months. I think most EWI system suppliers will be able to manage delays of days or even a few weeks, but longer than this will severely impact on the supply chain. I recommend sub-contractors start to enter dialogue with the main contractors, in order that they cannot be held liable for delays resulting from Brexit.

Accreditation of products:

Initially this sector should see no impact as far as accreditation is concerned, but there may be issues further down the line as standards begin to diverge. This is likely to be more of a problem for exporters and may not have any great impact on the UK construction industry, particularly in the short to medium term.

We must hope that sense prevails over bureaucracy and a pragmatic approach is taken from both sides to ensure as little disruption as possible whatever happens. I don’t think anyone is suggesting that our industry makes massive investments to mitigate the risk, but by reassuring work force, increasing stocks where feasible, considering other sources of supply, placing orders in good time and keeping the supply chain informed of developments or possible delays will help us to get through.

Whether you are a Remainer a Brexiteer, whether you came by your views through rational thought or intuition, we must work together to overcome the challenges that lay before us.