How Brexit got personal

A year on from the vote to leave the EU, and one of the biggest issues still to be resolved is the position of EU nationals currently living and working in the UK – of whom estimates suggest nearly 200,000 work in the construction industry.

Overall, these workers make up a significant 8% of the construction workforce, and in areas such as London, where the figure rises to 25%, employers are seriously concerned. The RICS, no less, has talked about the potential of Brexit bringing the UK’s £500bn infrastructure pipeline to “a standstill”.

But, of course, it’s not just employers who are worried about finding scarce skilled staff. For EU nationals themselves, Brexit is a worrying and destabilising prospect. While the government announced only today in Brussels that it is proposing a “UK settled status” for EU nationals who have lived in the UK for five years, this will rely upon EU states granting the same rights to Britons. Below, Building talks to five foreign-born employees about what the vote to leave means for them, their lives and careers, while here we ask what employers are doing to prepare for the likely changes, how they’re reassuring non-UK EU staff, and how confident they are feeling in their businesses’ future outside the EU.

Uncertainty

Under existing rules, EU staff in the UK can gain “permanent residence” in the UK after five years of living here, though currently the government is trying to avoid a flood of applications and its latest advice is to sign up to email alerts that will tell EU nationals if and when they need to take steps to confirm their status in the UK. For those who have been in the UK less than five years, the situation is more uncertain: Theresa May’s government has said it will not guarantee the right to remain until reciprocal rights for UK citizens living abroad are assured – and recent reports suggest several hurdles are in the way of a quick deal.

And quite apart from wanting to hold on to the workers already here, fewer of those crucial EU-born workers are now entering the country. Whether or not Brexit uncertainty is the reason, the latest migration data suggests the flow of EU nationals into the UK is already abating, with 2016 seeing the first fall in net migration since the credit crunch, while the number of EU nationals leaving the UK leapt by 40,000. Dan Burr, partner at architect Sheppard Robson, says: “There are always some foreign workers who will reach a point and decide they aren’t going to make their life here. The worry is this pushes more of them to do that than otherwise would.”

This spells trouble for employers, with ever-tightening immigration rules making it harder and more expensive for employers to bring in people from outside the EU. The Conservative Party manifesto, for example, promised to double a newly introduced per head charge on UK firms for each overseas worker. Peter Inglis, practice leader at architect Cullinan Studio, which has seen one EU staff member leave since the vote, says: “The climate for employing non-EU nationals has become more and more hostile and difficult. If in future EU staff will become subject to that, then it’s very concerning.”

Karen Cooksley, head of planning at property law firm Winckworth Sherwood, says: “Our clients are extremely concerned about skilled labour. There is already a shortage of people, and the cost of getting buildings developed has rocketed.” Simon Rawlinson, head of strategic research at consultant Arcadis, says: “Labour is a real worry in the medium term, particularly given the sense is from government that there is going to be no special deal for the sector.”

Reaction

So what are potentially affected businesses doing about it? Lobbying the government is one course of action. Architecture practices are particularly exposed to the uncertainty, with 16% of registered architects from elsewhere in the EU. Last month, 20 eminent UK architects signed a letter, alongside Richard Rogers, calling for the government to unilaterally guarantee EU workers’ rights and lauding their contribution to the UK.

Many firms from across the industry have also signed up to Building magazine’s Building a Better Brexit campaign, which calls on the government to consider and protect construction’s labour supply and current foreign-born workers.

In addition, many UK firms have sought to reassure their existing EU staff that they are welcome and valued and that they will make strenuous efforts to ensure they can stay, whatever the outcome of negotiations. For example, Sheppard Robson’s Burr says the firm sent an open letter to EU staff after the vote saying how much they were valued. Burr says: “EU staff have been a massive benefit to us.

The cosmopolitan view gives firms a forward-thinking edge.”

So far, this reassuring tone from businesses has been possible because the economy has outperformed the gloomy expectations of economic forecasters – and remainers – prior to the leave vote. Quarterly output rose 2% between Q1 2016 and Q1 2017, and both Burr and Cullinan’s Inglis say their businesses have performed strongly since the vote.

Vince Clancy, chief executive at consultant T&T, says the impact has been “marginal” so far, and Arcadis’ Rawlinson adds: “Construction has been surprisingly robust, there’s not been any sense of the kind of correction you’d have expected.”

But any threat to the overall health of the industry will have a serious effect on firms’ ability – and willingness – to source and support staff from outside the UK. While few have so far followed the lead of architect Foster + Partners, which made 100 staff redundant, citing Brexit, many have responded by staying very cautious. Hanif Kara, partner in engineer AKTII, says the firm has consciously not expanded as quickly as envisaged, while T&T’s Clancy says he has reprofiled business development effort since Brexit, planning to focus winning work in overseas markets – ironically in continental Europe and Ireland – seen as more likely to grow.

With inflation forcing up the cost of living, there is already a sense that markets driven by the private sector – commercial offices and housing – are weakening, while deepening gloom over the prospect of a good exit deal from the EU stokes fears over what will happen to the economy on departure. “If there’s no deal,” says Clancy “then we’re in uncharted waters, it’s more uncertainty. We know it’ll be more of a problem, but how much of a problem is very, very hard to gauge.”

What is certain is that in a tougher economic environment, with tough migration rules, it will become harder for UK businesses to afford the extra time and expense of bringing in EU staff. Cullinan’s Inglis says it could push them to make shorter-term hires, and another told Building it is becoming “harder to justify investing above and beyond in these overseas staff.”

So what does all this mean for EU staff themselves? Building asked five to share their stories below.