The focus of Brexit so far has been the possible impact on construction’s growing skills shortage. But how is the UK’s vote to leave affecting the EU nationals themselves and what can employers do to ensure that they stay?
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.
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.”
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.
Job: Project architect, Cullinan Studio
‘Something in the atmosphere has changed’
23 June 2016 is an important date for Eugenie in more than one way. In a bitter coincidence, as well as the Brexit referendum, it was also the day she got the RIBA chartership she’d spent her three years in London working to achieve. “Becoming an architect is such a long process, and finally I got my RIBA qualification, which I had been so excited about. But there was this sudden uncertainty with the referendum – had I done all that qualification for nothing? I was quite angry, I didn’t want to believe it.” This disappointment was compounded when a project she’d been working on, helping win a design competition, was cancelled due to Brexit uncertainty.
Growing up both in France and Japan, Bliah, 27, says she felt at home in the UK after moving here in 2008. “I finally felt like I fitted in a city, I felt I could settle down.” Featured as one of the new architecture talents to watch in Wallpaper magazine in 2015, she is not personally worried about failing to gain permission to stay in the UK – Cullinan has said it will sponsor her if necessary. But nevertheless she has been reconsidering her future, and a couple of months ago had determined to head back to Japan, though she has now decided to stick here for at least another two years. “I don’t know if I’m as welcome as I thought. A lot of my European friends have left or are thinking of leaving – something in the atmosphere has changed.”
Job: Senior engineer, Elliott Wood
‘Suddenly I’m a foreigner again’
Now 38, Molina came to the UK originally with his parents when he was 16, studying civil engineering at Imperial College. He stayed on in the UK when they returned home, working for WSP and other smaller consultancies before winding up at Elliott Wood.
With a British partner, Molina was fully embedded in the UK – he even supported England in the Euros – but now this has changed. Like other EU nationals, he was shocked by the vote. “Suddenly I felt this country I’d lived in for 20 years was no longer my home. It was my home, my country – but suddenly I’m a foreigner again.”
Given his length of residence in the UK and his family ties, he says he has no concerns he might be forced to leave the UK, but it made him think twice about completing his chartership, and he has applied for a permanent residency card that he never before thought necessary. However, it has clearly tarnished his view of the UK, and he no longer supports England’s football team.
“I feel less part of the place. I’m tied here but if I wasn’t I’d imagine I’d be thinking of returning home.”
Job: Associate director, Gleeds
‘The issue is the not-knowing’
“I was very much a remainer” says Lyons, who eight years ago moved to Edinburgh from his native County Clare to do a QS-conversion masters as the recession hit. “I was very disappointed and I think the wrong decision was made.” However, Lyons, now 30, is not worried at all about the Brexit vote having any impact on his professional future in the UK. “The politicians will do their best to make it work, and even if EU-wide they can’t get something sorted, then I think Ireland will be a separate discussion, a separate agreement.”
However, now working in the residential sector in London, he says he fears a big impact on the industry.
“A lot of investment has been affected, purchases affected. The issue is the not-knowing.
“The biggest impact on the construction industry though will be the labour market. If we make it difficult to work here there will be a massive shortage of labour.”
This will be exacerbated if EU markets such as Ireland start to receive inward investment that previously might have gone to the UK, Lyons says. “Dublin is already up and coming. If the negotiations with the EU go poorly Dublin will benefit and there will be a lot of Irish that will go home.”
Job: Architect, Perkins+Will
‘There’s a lack of information right now’
When Portillo, originally from Barcelona, moved to London in June 2014 she had already spent a year living in Chicago and two in Shanghai – but it immediately felt like home. “London is so vibrant. You find people from almost everywhere, it was very welcoming. I thought: I can settle down here – I’m not moving anywhere, I’m going to call it my home.”
Portillo, now 30, says she is “really confident” that the vote won’t stop her staying, with assurances from Perkins+Will that “whatever government establishes, I will be supported.” And she says that given the continuing welcome she feels in London, she doesn’t feel in any way rejected by the vote. “Initially it was scary. But my worries now are practical – what will be the bureaucracy, will I need a visa, will I need a certificate – there’s a lack of information right now.
“Some colleagues from the EU are thinking maybe they’ll move home earlier than expected. But I’m a positive person. Only if the negotiations get to the point where it’s clearly not going to be a win-win and the economy goes down the river, then I’d consider moving.”
Job: Site manager, Keltbray
‘I don’t think the English guys are going to come and do this work’
A 32-year-old former mechanic who turned to construction labouring when he came to the UK in 2009, Bucas says he owes his swift progress to the training he’s had from pre-construction specialist Keltbray. Having worked in the UK for over five years, with two children who were born here, Bucas says he is not worried that the UK leaving the EU will affect him personally. “I don’t think they’re going to kick me out now, it would be too hard,” he says.
He also says he has noticed no change in the attitude of fellow site workers to him and his compatriots. “My nationality has never been a problem on any site, and I don’t feel any difference before or after the referendum. Where I live in east London we have Lithuanian shops, people – it’s very welcoming. In Keltbray we don’t have racist people – everyone is just people.”
However, his experience shows the scale of the challenge for the industry if others like him are unable to come to the UK in future. Managing 30 people on a central London site, he says just two of his team are British. “I don’t think the English guys are going to come and do this work. Wages are not that high and many would prefer to stay on benefits. But for a Lithuanian you can at least live a life with these wages, where back home it is just surviving. But it’s going to be harder to come over in the future.”