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The impact of Brexit on the construction industry

1st March 2021/General News

The impact of Brexit on the construction industryWhether you were Team Leave or a firm Remainer, the fact is that Brexit is having a huge impact on the construction industry and the knock-on effects are being felt by all. Here, Revere Contracts CEO, Iain Martin, responds to the changes and challenges resulting from the UK’s decision to leave the EU and explains how he and the team are facing them head-on.

 

Shortage of labour

Prior to Brexit, the UK construction industry relied heavily on foreign migrant labour. In fact, recent figures from the Office of National Statistics showed that almost a third of workers on construction sites in London were from the EU. However, the end to the right to free movement and the introduction of a points-based immigration system is spelling an end to all this, therefore driving up the cost of labour, some predict by as much as 10 percent this year.

To make matters worse, there are fewer young people coming through to become tradespeople and the large infrastructure projects across the country are pulling in agencies offering workers high hourly rates, which again compounds the already small available trades pool.

Iain’s response: The loss of EU labour will be keenly felt so we’ll be working hard to maintain our workforce of loyal labour and recruit only those workers that can match the high standards we’re used to.

 

Supply issues with construction materials

The EU/UK post-Brexit trade agreement, the Trade and Cooperation Agreement (TCA), which came into effect on 1st January 2021, introduced measures to ease restrictions on the flow of goods between the EU and the UK. However, despite these measures, increased customs checks, assessments, duties, and restrictions on products from outside the UK and EU will potentially cause delays, shortages, and an increase in costs.

In fact, the Builders Merchants Federation (BMF) has warned that congestion at UK ports is already affecting the availability of construction materials. In addition, a recent survey by the Federation of Master Builders (FMB) has found many small and medium-sized construction firms are struggling with materials shortages, and that nine in ten builders are facing rising costs.

Material prices are up 20% on certain products and, with the amount of stimulus and quantitative easing, we can be sure to see further increases into the next tax year.

Iain’s response: We’re experiencing first-hand the frustrating delays and shortages in the supply chain but we’re doing everything we can to minimise the knock-on effects to ensure our projects are completed on schedule.

 

Uncertainty over changes to laws, regulations, and standards

Some confusion arose prior to Brexit about exactly what cutting ties with the EU would mean for UK law. However, despite the fact that the EU (Withdrawal) Act 2018 (EU(W)A) repeals the European Communities Act 1972 which gives effect to the enforceability and supremacy of EU law, the EU(W)A also ensures that all EU law becomes part of UK law post-Brexit as ‘retained EU law’.

Take health and safety regulations, for example. The UK has led the way when it comes to health and safety within the construction industry – we were the driving force behind the Health and Safety at Work Act 1974 and the Corporate Manslaughter and Corporate Homicide Act 2007, for example, and we have one of the lowest rates of fatal injury across the EU. It is in everyone’s best interests to maintain these high standards.

Iain’s response: The UK is proud of its extremely high standards of health and safety and it is highly unlikely any of these will be relaxed at all. Here at Revere Contracts, the health and safety of our workers and our clients have always been our top priority and that won’t change.

 

Over to you…

What’s your take on it all? Do you have questions about how Brexit could impact your building project? Join the conversation over on our LinkedIn and Facebook pages, or speak to the construction experts at Revere Contracts directly by calling 0345 271 7010 or emailing info@revere-contracts.co.uk.

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