At a Glance

Brexit
IMPACT OF BREXIT ON THE CONSTRUCTION INDUSTRY
Quick Facts

Key issues:
Labour supply - Leaving the EU could bring many challenges to the UK
construction market including the impact on the labour supply which is
already suffering a shortage of skills and youngsters joining the
industry. According to the Office for National Statistics 10% of the
construction workforce are foreign nationals, there is a possibility
leaving the EU will widen that gap.
Free movement of EU nationals - At the moment its unclear what the
state of play will be when the UK leaves the EU. It might well be that
EU nationals continue to be accepted through the UKs borders or EU
nationals already in the UK are allowed to remain
Visa applications - The UK might negotiate terms that move away
from free movement and rely on a working visa application
basis. While this may help alleviate the impact on labour supply in the
UK construction industry it could also act as a deterrent as workers
may be put off by the effort involved in applying for a visa. Impact on Skills and Training
Worker incentives - If the UK was to implement a visa system, work
packages would need to be made more appealing to migrants as they As part of the All Party Parliamentary Group
would need more incentive to come to the UK over the option to work in the Built Environments fifth enquiry into
freely in any EU country. the impact of Brexit on the future skills needs,
Investment - Currently, the UK still has rights to apply for loans and BSRIA sent out a survey to all of its member
grants for research, infrastructure and so forth as a member of the EU. asking for feedback.
These rights will be withdrawn or at least, severely limited once the UK
leaves the EU. There has been suggestion by the European Investment
Bank that they could change their rules to allow the UK to remain a 43% of respondents said tighter
controls on migration would restrict
shareholder while the Prime Minister has stated that the UK could recruitment plans.
remain strong with the right trade agreements. But its important to
42% of respondents said that more
note that there is a further possibility that potential investors will be than 5% of their staff were EU nationals
deterred from business with the UK with the removal of reduced tariff while 29% had concerns about what
costs and non-barrier tariffs. Brexit means for retention.
However, a whopping 76% of
respondents said as a result of Brexit
the government will have to increase
spending on skills development in the
UK.
Labour and trade figures
The most resounding comment from our
members:
Government should be doing more to
10% of the UK construction workforce are foreign mitigate the skills crisis, irrespective of
nationals according to Office of National Statistics. Brexit, namely it was already an issue
before the referendum and Brexit will just
UK has 16% share of European Investment Bank (EIB) and drive the final nail
borrowed 7.8 billion Euros from the EU in 2015, 24% of
which was spent on energy projects while 22% was spent
on transport.
Approximately half of UK 1 trillion foreign investment
comes from EU and European Investment Bank (EIB)
(according to UK Trade and Investment).
Brexit
What is Article 50?

Article 50 is a small section contained within The Treaty of Lisbon.

The Lisbon Treaty brought together The Maastricht Treaty (and the amending
Amsterdam and Nice Treaties) and the Rome Treaty into a single legal What is Article 50?
agreement, forming the constitutional basis for the European Union. Part of Lisbon Treaty signed
Article 50 sets out the terms for a member of the EU withdrawing from the on 13th December 2009.
union. In essence, it states that any member of the EU may choose at any time to Sets out the terms by which a
withdraw from the union. It must begin by notifying the European Council of its member country can leave the
decision, this is what is referred to as triggering Article 50. EU.
Once Article 50 is triggered the withdrawing nation and the European Council
must negotiate terms of withdrawal, as well as a plan for the nations future
relationship with the EU. During this time all European Treaties, laws and regulations will still apply to the withdrawing
nation until the withdrawal agreement comes into force or after two years has elapsed since the triggering of Article
50. This two year limit can be extended but only by unanimous agreement between all remaining EU member states.
The discussions regarding the terms of withdrawal held by the European Council will not be attended by the
representative of the withdrawing nation and its terms must be agreed to by a qualified majority. The final point
states that any withdrawn nation seeking to re-join the EU must do so as if they were applying for the first time;
unanimous consent from all member nations must be sought.

What are the Key issues for triggering article 50?

Key Issues
The issue of withdrawal from the EU is unprecedented and new ground both for Unclear wording of
Britain and the EU. There are many tricky issues to deal with and this is not helped by the Article 50.
vague and limited wording of Article 50.
Referendum has
Furthermore, a dispute over the intention of the UK Referendum has led to a High Court advisory capacity only.
bid to prevent Article 50 being triggered without Parliamentary consent.
Government wish to
The main focus of the argument is that the UK Referendum was only ever approved by use Royal Prerogative to
Parliament in an advisory capacity, in other words, it was allowed in order to gauge public trigger Article 50.
reaction and opinions but it does not confer a legal right to go ahead with commencing
Brexit without a Parliamentary vote.
At a Glance

Terms of article 50

1. Any Member State may decide to withdraw from

the Union in accordance with its own constitutional
requirements.

2. A Member State which decides to withdraw shall notify the European

Council of its intention. In the light of the guidelines provided by the
European Council, the Union shall negotiate and conclude an agreement
with that State, setting out the arrangements for its withdrawal, taking
account of the framework for its future relationship with the Union. That
agreement shall be negotiated in accordance with Article 218(3) of the
Treaty on the Functioning of the European Union. It shall be concluded on
behalf of the Union by the Council, acting by a qualified majority, after
obtaining the consent of the European Parliament.

3. The Treaties shall cease to apply to the State in

question from the date of entry into force of the
withdrawal agreement or, failing that, two years after
the notification referred to in paragraph 2, unless the
European Council, in agreement with the Member
State concerned, unanimously decides to extend this
period.

4. For the purposes of paragraphs 2 and 3, the member of

the European Council or of the Council representing the
withdrawing Member State shall not participate in the
discussions of the European Council or Council or in
decisions concerning it. A qualified majority shall be
defined in accordance with Article 238(3)(b) of the Treaty
on the Functioning of the European Union.

5. If a State which has withdrawn from

the Union asks to re-join, its request shall
be subject to the procedure referred to in
Article 49.
Brexit
Views of Brexit

Industry view:
Zaha Hadid Architects: Brexit offers
This could be the most difficult the UK a great opportunity to become
diplomatic endeavour ever more enterprising and successful
undertaken.
CIBSE: Brexit vote creates global
We are one of the great trading opportunities CIBSE President
nations of the world and the decision John Field.
taken by the people to leave the EU
BRE Group: "BRE remains committed to
will enable us to seize new
building a better world together with
opportunities and make sure that the
partners in Europe and beyond" Peter
UK remains the best place in Europe to
Bonfield, CEO, BRE Group.
own and grow a business.
BSI: Business as usual. ...it would be
Our aim is clear: to deliver on what the
fair to assume that both British and
country instructed us to do in the
European standards will remain current
referendum and build an even more
and in place.
dynamic economy.

Rt Hon David Michael Davis MP

Secretary of State for Exiting the
European Union
Europes view
Against the UK leaving the EU.
Declared that the UK will not be
allowed to cherry pick its terms.
All 27 EU member states will have
to agree the terms.
HOWEVER
It is thought that the EU would
want a constructive deal as the UK
is a crucial trading partner.
Australias view:
Australian Trade Minister, Steven Ciobo:
Any post-Brexit deal will have to wait
until Australia has completed existing
talks with the EU.
Preliminary talks with the UK could run
parallel to speed up the process but a
deal could only be struck at the
right time.
Former Prime Minster, Tony Abbott
Australia should strike a shotgun
trade deal with post-Brexit UK.
Any new deal should have no carve-
outs, tariffs or quotas and allow
workers and goods to be seamlessly
transferred between countries.

Scotlands view:
The Scottish population largely voted not to leave the EU.
Since the UK has committed to not legislating devolved matters with assent of
the Scottish Parliament, the First Minster for Scotland, Nicola Sturgeon claims
that she will have veto over Brexit .
HOWEVER
Constitutional experts say that Westminster can override the Scottish
Parliament.
At a Glance

WHY DID THE HIGH COURT RULE IN FAVOUR OF PARLIAMENT?

The High Court ruled on Thursday 3rd November 2016 that the Prime Minister
cannot trigger Article 50 (thus signalling to the European Council our intent to High Court ruling makes
leave) without first putting it to a vote by parliament. the Governments
There are two significant reasons why they ruled as they did. proposed timeline for
triggering Article 50
Firstly, in order for the government to do anything it must first have the
uncertain.
legal authority to do so. It gets its authority from parliament, who vote on
proposals and bills on behalf of the citizens. The referendum held in 2016 Gives MPs a chance to
had to firstly be agreed upon by parliament; this was achieved by the vote against Article 50.
passing of the Referendum Act 2015. However, the wording of the High Court Ruling upheld
Referendum Act only made provision for an advisory referendum. by Supreme Court after
Secondly, the Prime Minister wished to bypass this lack of authority by failed Government
invoking Royal Prerogative but this does not grant limitless power. The challenge.
limits of Royal Prerogative are vague and tend to be more a matter of
custom. Final say, by law, rests with the common law courts of England. In this case, they decided that Royal
Prerogative was not enough to withdraw the UK from the EU without first consulting parliament. The reason
for this is that by withdrawing from the EU, the government will effectively be limiting or removing all of those
rights guaranteed to UK citizens by EU law, and given effect in the UK by the European
Communities Act 1972. The High Court ruled that in order to remove or limit the rights of citizens the
government must be acting on the authority of their elected representatives.

The UK Government responded by lodging an appeal in the Supreme Court to overturn the High Court ruling. The
appeal hearing was held between 5th and 8th December 2016 before eleven Supreme Court Justices, the results of
which were announced Tuesday 24th January 2017.
Brexit
FAQ questions about BREXIT
What will happen to EU citizens living in the UK
and UK citizens in the EU?
As with almost every question regarding
Brexit, the answer is we dont know. However,
it is in the interests of other EU nations, as well
as Britains, to get this settled quickly.
Theresa May could announce, at any point, a
unilateral agreement guaranteeing the rights of
all EU citizens in the UK.
However, she claims to want assurances from
other EU countries, regarding the rights of British
citizens living abroad, before shell make any
guarantees. Foreign leaders, in turn, refuse to
negotiate any terms before Article 50 is
triggered. The governments refusal to commit to
a response has led many critics to accuse them of
using foreign workers rights as bargaining
chips in the upcoming negotiations. For the time
being, at least, this question remains uncertain.
How long will Brexit take?
Legally, Brexit has to be finalised within two years
of triggering Article 50.
The short answer is that we dont know. No
country has ever left the EU and it wasnt
expected to ever happen.
Officially, from the point that Theresa May triggers
Article 50 the government then has two years in
which to negotiate an exit deal and establish a
future trading relationship with the EU. However,
there are many who do not believe it is possible to
negotiate a suitable agreement within two years.
Britain can request an extension of the two year
negotiation period but this must be agreed to by
all remaining member states.
For sources used to answer these questions plus reading material about Brexit ,
please refer to BSRIAs Brexit web page:
https://www.bsria.co.uk/information-membership/information-centre/brexit-information/
When will Article 50 be triggered?
The proposed date is towards the end of March 2017
but is dependent on the European Union (Notification
of Withdrawal) Bill being given Royal Assent.
During the 2016 Conservative Party Conference,
Theresa May announced that she intended to trigger
Article 50 by the end of March 2017.
The High Court decision that Article 50 could only be
invoked with a vote from parliament did throw this
date into doubt. As a result the Government set out
legislation in order to get Parliamentary approval, The
European Union (Notification of Withdrawal) Bill
2016-17, if approved would confer power to the
Prime Minister to officially notify the EU of the UKs
intention to withdraw. MPs voted in February 2017,
overwhelmingly in favour of the Prime Minister
triggering Article 50. The Bill will continue through the
House of Lords for debate but is expected to be given
Royal Assent before the end of March.
Can the High Court ruling stop Brexit?
In theory, yes. In reality, probably not. Although
many MPs voted against Brexit, it is thought that
they would be unlikely to go against the wishes of
their constituents.
MPs will be given a vote on the final Brexit deal,
Theresa May has confirmed.
However, she also claims that no deal is better than
a bad deal. It would seem then that if MPs vote
down the deal (because it is a bad deal) the UK
would leave the EU regardless (with no deal). It
would seem that the Government is determined to
not let the High Court ruling stop Brexit, at any cost.
At a Glance
How will the Government carry out BREXIT?
Leading the negotiations to leave the
EU, the Government appointed Rt Hon
David Michael Davis MP as Secretary of
State for Exiting the European Union in
July 2016.
A Department for Exiting, headed by
Mr Davis, was also set up to enable the
process and negotiations.
Role of the Department of Exiting involves:
Creating the policy work to support the UKs negotiations to
exit the EU and to create the future association between the
EU and the UK.
Working closely with the UKs devolved administrations,
Parliament, and other interested parties on what the style
of such negotiations should be.
Conducting the negotiations in support with the
Prime Minister.
Supporting mutual conversations on EU exit with other
European countries.
Running and co-ordinating cross-government work to seize
chances and ensure a smooth course of exit on the ideal
feasible terms.
Theresa Mays 12-Step Brexit
Negotiation Strategy in brief
As part of the Governments White Paper, Theresa
May released her 12-Step Brexit Negotiation
Strategy:
1. Certainty
Convert all current EU laws into UK law.
Final Brexit deal put to vote by parliament.
2. Control of own laws
End of jurisdiction of European Court in Britain.
3. Strengthen the Union
Set up joint ministerial committee on EU
negotiations so all devolved governments have a
say on Brexit deal.
4. Maintain the common travel area with Ireland
Aim to maintain open border while ensuring
immigration control.
5. Control of Immigration
Control and reduce the number of migrants to
the UK.
6. Rights for EU nationals in Britain and British in
EU
Ensure a deal securing rights is struck as soon as
possible.
7. Protect workers rights
Ensure all workers rights guaranteed by EU law
are protected and built upon by UK law.
8. Free trade with European markets
Leave the single market completely.
Seek to set up a Free Trade Agreement with EU.
End financial contributions to the EU.
9. New trade agreements with other nations
Remain a part of the customs union as much as
possible without accepting Common Commercial
Policy or Common External Tariff.
10. The best place for science and innovation
Aim to establish research agreements with the
EU.
11. Cooperation in the fight against crime and
terrorism.
A continued commitment to sharing crime and
terrorism data.
12. A smooth orderly Brexit
A phased timetable of changes to ensure there is
no legal cliff-edge.
 Brexit
What are the Terms of the brexit negotiation

According to various polls the most important areas of concern to voters

were: Immigration, Trade/ Economy, Financial contributions to the EU and
UK Sovereignty. We will consider each topic in turn to assess what it is that
Britain and the EU want out of the withdrawal negotiations.

Immigration
There are four pillars of freedom considered central to the European
Union; free movement, across borders, of goods, services, capital and
people. It is the last of these pillars which a significant number of British
people takes issue with. Currently, approximately 50% of all immigrants to
the UK are EU nationals and under the terms of our membership of the Possible trade model
single market there is little that can be done to change this. As a result,
since the UKs vote to leave the EU, the Prime Minister has made it her options for the UK
chief aim to assert British sovereignty over its borders at the cost of
Norway Model (Soft Brexit)
membership of the single market. member of the European
Economic Area (EEA) instead of EU
Limited access to single market
Trade Ability to negotiate trade deals
The issues of Trade and Immigration are what separate a Hard Brexit and set tariffs
from a Soft Brexit. Since the free movement of people is a pre-requisite No access to 36 bilateral EU
trade deals
of membership to the single market, those that value tougher immigration
However
control above all else will generally favour a Hard Brexit, whereas those
who wish to retain at least some access to the single market, will prefer a Must still pay a fee to be a
member of EEA similar to
Soft Brexit option. Prime Minister May has spoken of her intent to UKs existing EU contribution
pursue a Hard Brexit and leave the single market altogether; though she
has also revealed that she intends to allow MPs to vote on the final Brexit Switzerland Model (Soft Brexit)
deal. Since most MPs were in favour of remaining members of the EU it is member of European Free Trade
Association (EFTA)
certainly possible that they may vote against the governments proposed
Hard Brexit plan. Free EU trade with all non
agricultural goods
Individually negotiate deals
with EU for other goods
Option to participate with EU
activities in return for
complying with some EU rules
However
No guarantee that EU would
offer a similar deal to the UK

Default option (Hard Brexit)

Singapore / Hong Kong Model
(Hard Brexit) unilateral free
trade agreement
Use of World Trade
Organisation (WTO) framework
Tariff-free trade
Ease of trade with all countries
However
Severe negative impact on
British agriculture and
manufacturing industries
Very limited access to single
market
Canada Model (Hard Brexit)
bilateral trade agreements with
the EU
Preferential access to the single
market in return with
complying with some EU rules
Tariff free trade on most goods
However
Took seven years to negotiate
(UK only has two years)
No guarantee that EU would
offer a similar deal to the UK
World Trade Organisation (WTO)
Framework
If UK fails to negotiate Brexit
within two years it defaults to
the WTO Framework
Ease of trade with all countries
Much more political
sovereignty
However
No free trade deals unless UK
enters EEA or EFTA
Costs of imports would
increase significantly
At a Glance

What are the Terms of the brexit negotiation

Financial contributions to the EU

It is difficult to ascertain precisely how much the UK

pays into the EU annually as it changes year on year
and the UK receives rebates and funding for various
government departments and schemes.

However, figures for 2015 suggest that there is a deficit and the UK pays
more in than it receives back; 18 billion would be the membership fee
but the UK automatically received a tax rebate of 5 billion dropping the
contribution down to 13 billion. The EU then spent a further 4 billion on
the UK through various funding schemes.
This would seem to suggest that the UK spends 9 billion a year on the EU
which it never sees in return. In fact this was a major component of the
Leave campaign, suggesting that this money could instead go to the NHS.
However, the EU is likely to ask for continued financial contributions in
order to retain access to the single market. It has a precedent for this as
both Norway and Switzerland pay considerable sums into the EU budget for
partial access to the single market. Though the Governments Brexit
strategy involves a complete withdrawal from the single market, the
Prime Minister has declared an interest in Britains continued participation
in EU projects. So while those large membership fees are no longer being
paid into the EU, the UK will still be contributing money in other ways,
though considerably less.

Mp brexit vote

In her Brexit speech on Tuesday 17th January, Theresa May

confirmed that MPs will be given the opportunity to vote on any
final Brexit deal before it is presented to the European Council.

This should be the opportunity for those who represent the public to
shape the deal in a way they feel best captures the demands of the
electorate. However, Brexit Secretary David Davis has asserted that
should MPs vote down the Governments Brexit deal then the UK
would still leave the EU, minus a trade deal. The vote for MPs then
becomes Support the Governments deal or Support No deal. No
deal means the UK reverts back to World Trade Organisation rules
regarding trade, there would be no guarantees for EU citizens in the
UK (or UK citizens in EU) and the UKs participation in any and all EU
projects would cease. Despite the Prime Ministers claim that no deal
is better than a bad deal, no deal is still a pretty bad deal.
Brexit
What happens to eu legislation?

What next?
National sovereignty
key points:
The EU can impose two kinds of legislation; Directives and
Regulations. Regulations apply automatically once enacted at an EU
level, whereas Directives must be made into national law by member
governments. Reclaim supremacy of EU
legislation over UK laws.
Many feel that the supremacy of European legislation over that of
Free to pick and choose
the UK is a threat to sovereignty. They which European legislation
believe that only by leaving the EU and to repeal and replace.
taking back control for ourselves can the UK Introduce Great Repeal Bill
to cancel EU powers.
hope to regain our sovereignty.
At first this may seem obvious once the UK However
leaves it will no longer be subject to EU Reclaiming sovereignty may
regulations and any laws passed as a result of prevent access to single
market.
EU directives can in theory be repealed.
This has been addressed by Theresa Mays suggestion of a Great
Repeal Bill; a Bill which would scrap the European Communities Act
1972 (An Act making EU laws automatically UK laws) and allow, by way
of secondary instruments, the government to either scrap or amend all
UK legislation that was put in place as a result of an EU directive. Great Repeal Act
Though this will lead to stronger sovereignty, it will also take a very key points
long time and many resources across all government departments.
Regardless of whether the UK retains access to the single market, it is
clear that we will want to continue trading with the EU.
Repeal the European
However, the EU currently imposes certain standards of trading on all Communities Act 1972.
nations it currently trades with. These standards must be met, Existing laws would remain in
place initially unchanged.
whether or not the country is a member of the EU.
Government may assess each
This means that the UK will still need to comply with these EU law and decide whether to
keep or amend.
mandated regulations while no longer having any influence on their
No longer answerable to the
creation and implementation. European Court of Human
Rights.

However
Could take years to reassess
every single regulation or
law.
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BSRIA BREXIT WEB PAGE BSRIA LIBRARY: European Directorate, Foreign and Commonwealth Office,
Alternatives to membership: Possible models for the United
Peruse BSRIAs dedicated Brexit web Many articles, books and other Kingdom outside the European Union, HM Government, March 2016
https://www.gov.uk/government/uploads/system/uploads/
page with links to BSRIA articles and publications are available to attachment_data/file/504604/Alternatives_to_membership_-
events. Click here to view. members on loan or photocopy on _possible_models_for_the_UK_outside_the_EU.pdf
request at www.bsria.co.uk; or
telephone 01344 465571. All copyright GENERAL RESOURCES:
BSRIA TRAINING AND EVENTS conditions apply. Building. Various articles and news items on Brexit and the
building industry www.building.co.uk.
Do you want to know what industry For selected industry articles on Brexit, Governments White Paper on Brexit
events and training options are avail- click here. (This page is regularly https://www.gov.uk/government/publications/the-united-kingdoms-
exit-from-and-new-partnership-with-the-european-union-white-
able on Brexit and possible updated). paper
impacts? Confederation of British Industry (CBI). Economic analysis on UK, EU
and Brexit
www.cbi.org.uk
Visit BSRIAs training pages at BSRIA bookshop - offering publications on Daily Telegraph. News and views on Brexit
https://www.bsria.co.uk/ building services and building design. http://www.telegraph.co.uk/brexit/
information-membership/events/ The Guardian. News and views on Brexit
PDF downloads are free for members at https://www.theguardian.com/politics/eu-referendum
or contact our team on www.bsria.co.uk/information- Trade Association Forum (TAF). Events, workshops etc. on industry
UK +44 (0) 1344 465578. membership/bookshop/. topics including Brexit.

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