CPA Bulletin

POLICY: 1 Brexit 1,000 days on Will we stay or will we go? And what happens next anyway? www.cpa.uk.net CPA Bulletin > May 2019 35 Until the EU granted the UK a six month extension, we were meant to leave the EU on Friday 12th April 2019. At the time of writing (a phrase I’ve literally had to use in almost every policy article or briefing I have written in the last 36 months), unless the House of Commons ratifies the original withdrawal agreement, the UK is still scheduled to leave the without a deal on October 31st 2019 - something most commentators and experts believe will be a horror show if it does come to pass. But what has Brexit meant in the three years since the June 2016 referendum? The UK has experienced unprecedented political instability in peace time, a record Parliamentary defeat on a Government Bill, an executive unable to pass its own legislation and open warfare in both main parties. The economy has fared well by comparison. Although forecasts continue to point to lower growth prospects for the next few years, the economy has avoided a recession, wage growth is rising, interest rates remain historically low and the recent employment figures show unemployment at its lowest for almost 45 years. Business uncertainty and Brexit go hand in hand And yet, uncertainty around Brexit and what it means for business has been a core feature of the debate and fall out from the referendum. Businesses have voiced concerns around accessing skilled staff from the EU, investment decisions have been postponed and business planning concentrated on what happens once we leave the EU. The threat of a no-deal Brexit has dominated thinking as much as what the UK’s role and place in the world is after we finally leave the EU. What does leaving without a deal and reverting to World Trade Organisation (WTO) rules on imports and exports actually mean in practice? A no-deal Brexit will impact construction in several areas For the construction sector, accessing both skilled and unskilled staff remains a challenge. With existing difficulties in attracting home-grown talent well documented, foreign employees make up 15% of the UK construction workforce to address this short-fall. 51% of these workers come from an EU country. Research from the Royal Institute of Chartered Surveyors suggests construction could lose 8% of its workforce once the UK has left the EU as workers leave to more attractive destinations within the EU - that is almost 200,000 roles the sector needs to fill - and fill fast. The Government’s long-delayed immigration White Paper has already been fiercely resisted by trade federations within construction due to the limits it puts on the number of incoming workers earning under £30,000 a year. In the Government’s current proposals, under a no-deal Brexit and the end of free movement, workers would be able to apply for a Tier 2 visa, however this would apply to very few construction workers in practice. To appease business, a 12-month temporary scheme for EU workers will be introduced, allowing workers to stay in the UK for a year. Although this might help industries reliant on seasonal workers and temporary staffing, for construction it will have limited impact. With projects that can run for years and access to a reliable source of readily available labour is essential, the Government’s plan is unlikely to offer much solace. But a no-deal Brexit will impact in other areas as well. Kent has already seen the start of Operation Brock, where parts of the M20 will be used to hold lorries held up in queues getting into the channel ferry ports and Eurotunnel terminals at Dover and Folkestone. A no-deal Brexit will bring added bureaucracy as customs checks are made and forms are processed. For construction, the Department of Business, Enterprise and Industrial Strategy (BEIS) estimates that 62% of building materials coming into the UK, come from Europe. In return, 60% of the construction materials we export are EU bound. If the UK is to operate on WTO tariff terms, it will make goods more expensive. The Construction Products Association has estimated 92% of timber is imported into the UK. These price rises will have a knock-on effect on wider construction costs; enhanced custom checks will lead to delays in projects, this in turn will have to be incorporated into future planning, adding costs and putting at risk projects being run on tight deadlines. Although a no-deal Brexit has been in theory, ruled out by Parliament, in the present circumstances, we cannot take anything for granted. That is why, ahead of a potential no deal, the CPA is calling on members to prepare and make sure they are ready for whatever happens next. How CPAmembers can and should prepare for Brexit The six month extension is a golden opportunity for companies to take advantage and make sure they are ready for Brexit - in whatever form it takes.