Clearview National August 2016 - Issue 177 | Page 12

BREXITUPDATE Brexit – catastrophe or business as usual? As the dust is still settling over the historic Brexit vote in the EU referendum, the full extent of its implications may take years to untangle. »»MORE THAN 30 MILLION people voted ‘Leave’ in the shock result on June 23 by 52% to 48%. Following the result, the pound dropped to its lowest level in 30 years against the US dollar. David Cameron, Boris Johnson and Nigel Farage have all resigned and a protest march against the Brexit vote attracted a huge turnout in central London. The Labour party lurched into crisis as a raft of frontbenchers resigned, backing a no confidence vote in leader Jeremy Corbyn and Interior Minister, Theresa May, succeeded over candidates, Andrea Leadsom and Michael Gove, to become Britain’s next Prime Minister. It’s not surprising that we feel jumpy. Most accept that such a climate can’t be good for business, and there have been numerous and conflicting predictions about the impact of Brexit on construction and house-building. In this special Brexit feature (correct at time of writing), we have brought together some of the news and views from this industry and further afield, in an attempt to unravel the issues at the heart of this very complex subject. INFRASTRUCTURE HALT In the short term, we are told not to expect any green lights from government about such major infrastructure issues as airport runways, new railways and nuclear power stations. In the medium term, leaving the EU may very well result in the end of the British Union, with separatist force pulling Scotland away and the Good Friday Agreement that brought peace to Northern Ireland now potentially unsustainable. The EU itself will also face disintegrationist pressures that could pull it apart. CONSTRUCTION MORE VOLATILE Monika Slowikowska, founder of Golden Houses Developments, a specialist in high-end residential projects, believes Britain leaving the EU will have a catastrophic effect on the construction industry and is worried about the effect on EU funded projects, pointing out that pots of money such as the European Structural Investment Fund (EUSIF) had contributed billions towards UK regeneration projects. “We now also risk becoming an unattractive proposition for foreign investors from the other 27 EU countries. This is because increased travel costs and import and export tariffs could complicate the existing simple arrangements,” Monika explains. “The same applies to buying building materials from our European partners. Currently, 59% of the building materials we import come from EU 12 » AUG 2016 » CL EARVI E W- UK . C O M Brian Berry, Chief Executive of the Federation of Master Builders countries, who also buy 62% of our exports in the same category. Those transactions were simple to process. Out of the EU, we could pay higher prices and have to contend with more red tape. The inevitable result of this will be higher house prices across the UK.” She added that the cost of labour in the construction sector had increased by an average of 8% in the last six months and was set to keep rising. And, if immigration reduces as predicted, that could starve the construction industry of much needed skills from overseas. The shortage could restrict the government’s ability to meet its housebuilding targets. Brian Berry, Chief Executive of the Federation of Master Builders (FMB) said: “The UK construction industry has been heavily reliant on migrant workers from Europe for decades now – at present, 12% of the British construction workers are of nonUK origin. “The majority of these are from EU countries such as Poland, Romania and Lithuania and they have helped the construction industry bounce back from the economic downturn when 400,000 skilled workers left our industry, most of which did not return. “It is now the government’s responsibility to ensure that the free-flowing tap of migrant workers from Europe is not turned off. “If ministers want to meet their house building and infrastructure objectives, they have to ensure that the new system of immigration is responsive to the needs of industry.” Alan Brookes, UK Chief Executive Officer of design consultancy, Arcadis, said: “Construction markets are likely to become more volatile in the short term, and we need to consider a joined-up approach to sustaining the capacity and capability of the industry.