Industry sends open letter to PM on No Deal and Brexit

Latest News Fri, Aug 16, 2019 4:01 PM

The Association for Consultancy and Engineering (ACE), Build UK, the Civil Engineering Contractors Association (CECA) the Construction Products Association (CPA) and the Federation of Master Builders have sent an open letter to Prime Minister Boris Johnson on the UK construction industry’s preparations for Brexit and the potential impact of a ‘No Deal’.

The organisations respectively represent engineering consultants, clients, major & specialist contractors, civil engineering companies, construction product manufacturers and suppliers, and SME builders.

Together, they account for hundreds of thousands of jobs and the majority of the UK construction industry’s £163 billion in annual turnover. This industry is relied upon by Government and society to provide and maintain our infrastructure, homes and wider built environment.

"We have endeavoured to support and inform Government policy as preparations for Brexit have developed," the letter to the PM states. "We have also sustained an essential role with our members and the wider industry by sharing much needed expertise and information to help prepare for any eventuality.

"Crucially, our position underpinning this work has been consistent: while we recognise and respect the referendum result, we believe the UK must leave the EU in a considered, managed way in order to avoid the likelihood of massive short-term disorder and potentially long-lasting damage.

"Even now, the continuing inability of policy-makers to agree a way forward has left our members – multinationals and SMEs alike – struggling to overcome the market uncertainty impacting their businesses. Data from the ONS and Markit/CIPS make clear the worsening erosion in recent construction activity; contracts for new major offices projects, for example, have fallen sharply since the EU Referendum due to concerns from investors over long-term economic prospects and returns.

"This comes whilst our members seek to properly prepare for an unknown future after October 31st. As in other sectors, they are spending time and resources on stockpiling; transportation and logistics alternatives; auditing and guaranteeing the resilience of their supply chains; and vetting contractual risks and obligations.

"Our forecasts show that with a deal in place and a smooth Brexit, construction output would rise by over £1.2 billion by the end of 2020. Leaving in an unplanned way with a No Deal Brexit however could lead to a fall of £10.5 billion over the same period, with the greatest impacts felt on the house building and commercial sectors.

"The immediate effect of leaving without a deal in place is not knowing the cost of the materials and goods that construction projects rely on, or if they will arrive on sites across the four nations to keep projects of all shapes and sizes on track. Delays in completing building and infrastructure projects impacts our lives in so many ways; it may be the new hospital in a community which will speed up lifesaving treatments, the homes desperately required, urgent maintenance to our heritage buildings or vital repairs to bridges and roads that will keep Britain moving.

"With the impact of the previous financial crisis not forgotten in an industry that experienced countless business failures, plant closings and nearly half a million job losses, the resilience of our industry has its limits. We trust that the Government and parliamentarians will agree the arrangements for trading with the EU as a matter of urgency. In the meantime, we are ready to reaffirm our willingness to work with you and your new administration, and would welcome an opportunity to discuss how we can make a success of the years ahead."

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