Freedom of movement 'vital' to UK construction post Brexit, industry experts warn Government

The warning comes from a coalition of professional bodies representing the construction and built environment sectors.

Zlata Rodionova

Wednesday 14 September 2016 15:43 BST

Nearly 12 per cent of the 2.1 million construction workers come from abroad, according to the Office for National Statistics (Getty)

A coalition of professional bodies has warned the Government of a construction crisis if access to skilled workers cannot be secured following UK’s vote to leave the EU.

The UK construction industry relies heavily on European labour. Nearly 12 per cent of the 2.1 million construction workers come from abroad, according to the Office for National Statistics.

The Royal Institute of British Architects (RIBA), the Royal Institution of Chartered Surveyors (RICS), the Chartered Institute of Building (CIOB) and the Royal Town Planning Institute (RTPI) outlined their concerns in a joint statement to David Davis, the Brexit Secretary.

The group representing Britain’s architects, surveyors, planers and builders said the free movement of labour within the EU has been “vital” to the growth and flexibility of the construction sector.

“We are in the grip of our worst construction skills crisis in almost 20 years,” Amanda Clack, RICS president, said.

“There is a real concern within our industry that if access to a skilled workforce is further restricted, Britain could stop building. My colleagues and I would urge Government to keep this at the front of their minds when they come to negotiate our withdrawal from the EU,” she added.

The letter outlined five other priorities for the Government to focus on during the post referendum negotiations with the EU. These include access to european markets and colloborative research that the EU has enabled and promoted.

The Government has yet to establish a clear immigration plan.

Home Secretary Amber Rudd is expected to be briefed on a hardline plan to curb immigration after Brexit put forward by the think tank Migration Watch.

The scheme – under which only highly-skilled workers with well-paid job offers would be allowed into Britain – would aim to slash EU immigration by as much as four fifths.

At the weekend, Amber Rudd confirmed she was considering work permits, after the idea of an Australian-style points-based system was rejected.

The output of Britain’s builders flatlined in July according to the first official data on construction, covering the period in the immediate wake of UK's decision to leave the EU.

6 ways Britain leaving the EU will affect you

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1/66 ways Britain leaving the EU will affect you

6 ways Britain leaving the EU will affect you

More expensive foreign holidays

The first practical effect of a vote to Leave is that the pound will be worth less abroad, meaning foreign holidays will cost us more

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6 ways Britain leaving the EU will affect you

No immediate change in immigration status

The Prime Minister will have to address other immediate concerns. He is likely to reassure nationals of other EU countries living in the UK that their status is unchanged. That is what the Leave campaign has said, so, even after the Brexit negotiations are complete, those who are already in the UK would be allowed to stay

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6 ways Britain leaving the EU will affect you

Higher inflation

A lower pound means that imports would become more expensive. This is likely to mean the return of inflation – a phenomenon with which many of us are unfamiliar because prices have been stable for so long, rising at no more than about 2 per cent a year. The effect may probably not be particularly noticeable in the first few months. At first price rises would be confined to imported goods – food and clothes being the most obvious – but inflation has a tendency to spread and to gain its own momentum

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6 ways Britain leaving the EU will affect you

Interest rates might rise

The trouble with inflation is that the Bank of England has a legal obligation to keep it as close to 2 per cent a year as possible. If a fall in the pound threatens to push prices up faster than this, the Bank will raise interest rates. This acts against inflation in three ways. First, it makes the pound more attractive, because deposits in pounds will earn higher interest. Second, it reduces demand by putting up the cost of borrowing, and especially by taking larger mortgage payments out of the economy. Third, it makes it more expensive for businesses to borrow to expand output

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6 ways Britain leaving the EU will affect you

Did somebody say recession?

Mr Carney, the Treasury and a range of international economists have warned about this. Many Leave voters appear not to have believed them, or to think that they are exaggerating small, long-term effects. But there is no doubt that the Leave vote is a negative shock to the economy. This is because it changes expectations about the economy’s future performance. Even though Britain is not actually be leaving the EU for at least two years, companies and investors will start to move money out of Britain, or to scale back plans for expansion, because they are less confident about what would happen after 2018

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6 ways Britain leaving the EU will affect you

And we wouldn’t even get our money back

All this will be happening while the Prime Minister, whoever he or she is, is negotiating the terms of our future access to the EU single market. In the meantime, our trade with the EU would be unaffected, except that companies elsewhere in the EU may be less interested in buying from us or selling to us, expecting tariff barriers to go up in two years’ time. Whoever the Chancellor is, he or she may feel the need to bring in a new Budget

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The Office for National Statistics (ONS( had estimated that construction, which accounts for around 6 per cent of the UK economy, contracted in the first two quarters of 2016, dragging on overall GDP growth, although new revisions now suggest output grew in the first quarter.

“While the initial post-Brexit slump appears to have stabilised, it is important that the Government focuses on maintaining infrastructure and construction investment leading up to and after Brexit, ensuring the right conditions are in place to attract infrastructure investors in all sectors across the UK,” Amanda Clark said.

“As we approach an unprecedented period of uncertainty, it is fundamental the government prioritises infrastructure and it remains at the forefront of maintaining a strong economy,” she added.

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