No-Deal Brexit and Contingency Plans
20 March 2019
29th March 2019, the date on which the UK could leave the EU with a no-deal Brexit. From day one, political and economic commentators have warned that a no-deal Brexit, also known as a hard Brexit, is the worst possible outcome for the UK. However, the closer we come to that date, and with no deal being secured, now is the time to prepare or action contingency plans.
Even though the construction industry, and the wider economy, has experienced growth, the economic uncertainty surrounding a post-Brexit UK could impact day-to-day business operations if measures are not put in place.
Brexit will not only affect large construction companies, but also one-man operations and every household up and down the country.
Companies that are currently on-site or will be commencing a project in the near future should consider from where supplies are arriving. If companies are importing supplies from the EU, then a hard Brexit will have a major impact on timescales and work schedules due to customs checks.
Each year, construction products valued at over £10bn are imported from the EU each year, including £1bn of timber and £750m of aluminium products. Approx. 15% of products used in UK construction are from the EU.
Delays would be inevitable and ensuring you’ve accounted for the potential of work slowing down, or completely stopping in some cases, ensure you’re better prepared.
A contingency plan would include stockpiling products. We’re moving towards a point in time that no one in the UK has ever seen, no one knows what to expect, and by stockpiling, you are preparing for the worst. You’re preparing for trucks to be stopped and searched; preparing for prices to sky rocket as a result of a fall in the sterling; preparing for a world where preparation will be key to overcoming delays.
Delays could become inevitable if we have a no-deal Brexit; however, if there is open dialogue between all parties involved in the construction process, then those delays can be overcome. Only through open channels of communication will all the potential challenges be identified.
Communication is important at all times, but in times of great uncertainty, it is the most important factor in delivering a project. All parties must be aware of what stage the project is at and if delays or unexpected challenges occur, how these can be overcome, and the timescales involved.
If an organisation will be implementing contingency plans, then it can only presume other companies within its supply chain will be taking similar steps. Speak to your major suppliers and clients, inform them of your next steps as this will assist all involved in the construction process.
EU Labour and Their Rights
The biggest impact on the UK construction market may come from the reduction in the number of skilled workers. More than a quarter of construction workers in London are EU nationals.
If we leave the EU with a no-deal Brexit, a proportion of the construction workforce, estimated to be 10% across the country, will be lost if labourers decide to leave the UK.
PAL Hire would advise organisations speak to EU nationals on-site to determine whether they wish to stay in the UK post-Brexit. If they do, EU staff must apply for settlement under the EU Settlement Scheme for both themselves and their families.
Currently, EU staff and their family members who have lived in the EU for at least five years (up to and including 31 December 2020) are able to apply for UK Settled Status. If they have been here for less than five years, they can apply for Pre-Settled Status.
It would be sensible to think that even if the UK left the EU with no deal, EU nationals wouldn’t be under immediate threat to leave.
A Hard Brexit is not the End of the World
We have not presented this article to fear-monger. These are potential areas in which contingency plans will help you continue day-to-day operations, but the world will not end with a no-deal Brexit. Construction will continue on 30th March 2019. The construction industry will not collapse.
If there is a no-deal Brexit, the UK falls back into World Trade Organisation (WTO) rules. This will impose tariffs at the borders. These tariffs, averaging at 5.7%, will be on the majority of products utilised within the construction industry.
A reduced workforce may give rise to construction companies utilising emerging technologies within their projects to counteract the lack of personnel. Technology and innovation within construction, some of which have already been covered by PAL Hire, could help the construction industry blossom post-Brexit.
What Steps are PAL Hire Taking?
Being rolled out in the near future is PAL Hire’s Core Products Promise. We guarantee to deliver a range of core products spanning our entire product portfolio within 24 hours, if ordered by mid-day.
Agreements with our UK-wide network ensures PAL Hire is ideally placed to combat any short term hire problems construction companies may face in a post-Brexit world.
To enquire about our core products, speak to our team. Even if the products you require may not fall under our Core Products Promise, we are still able to offer short lead times.
Everything and anything written by any organisation about a post-Brexit world is hypothetical. Everything you see and read is purely from an information basis as no one really knows what the UK will look like once we leave the EU.
All we know is that the current path the UK is treading leads to a hard Brexit and contingency plans are needed to sustain business operations.