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UK Prime Minister Theresa May at a security conference in Munich, 2018 (Kuhlmann/MSC/CC BY 3.0 de)

“When can we have a normal functioning government?”: UK industry up in arms over May’s defeat

16 January 2019 | By GCR Staff 4 Comments

Leading figures in UK construction expressed alarm after the defeat of Prime Minister Theresa May’s EU withdrawal agreement in Parliament yesterday, saying the ongoing confusion was damaging the industry.

Leo Quinn, chief executive of the UK’s biggest contractor, Balfour Beatty, told ministers: “I would like to know when we might get back to a normal functioning government.”

Head of architects body RIBA demanded an extension of Article 50, saying projects are being put on hold over the ongoing confusion.

“The enemy of business is delay and procrastination, and the construction industry will face large-scale restructuring where it cannot carry the resources it will need over the next 25 years, and capability will have to be let go”– Leo Quinn, Balfour Beatty chief executive

The government had to “find a solution that the country can rally behind”, said the British Property Federation, while public sector procurement body Scape Group warned the “Brexit fear factor” could  “paralyse construction growth”.

Their warnings came after May’s agreement suffered a crushing defeat in the House of Commons last night, with her own Conservative MPs joining opposition parties to reject it in a 432-202 decision.

Leo Quinn, in a conference call of company bosses with government ministers, including the chancellor Philip Hammond, urged the government to get its act together.

“I would like to know when we might get back to a normal functioning government,” he is reported to have said by Sky News.

He went on: “Decisions are being delayed on HS2, new nuclear, Heathrow expansion.

“The enemy of business is delay and procrastination, and the construction industry will face large-scale restructuring where it cannot carry the resources it will need over the next 25 years, and capability will have to be let go.

“Once resources are lost to industry it is very difficult to get them to come back; the next six months are critical.”

The Royal Institute of British Architects (RIBA) responded with comparable alarm.

“Tonight’s vote has left us in uncharted territory,” said RIBA chief executive, Alan Vallance, in a statement.

“No deal would be a disaster for the UK and ignores the deep economic, human and legal links between the UK and the EU. For the architecture sector, projects continue to be put on hold as uncertainty damages the investment climate and many EU architects in the UK are still uncertain about their future.

“Given the urgency of the situation, the Government and Parliament must, without delay, seek an extension of the Article 50 process to allow for a concerted attempt to reach a deal.”

He added: “To be weeks away from leaving the EU with no deal or alternative places businesses in an impossible situation. Our politicians cannot leave the public in limbo and business to sort out the situation – they must work together to end the uncertainty.”

Melanie Leech, the British Property Federation’s chief executive, said government must ward off the chaos of a “no-deal” Brexit.

“As Parliament has today not given its assent in the meaningful vote, the Government must set out urgently its plan to find a solution that the country can rally behind,” she said in an emailed statement.

“It is critical that the Government avoids the disruption and uncertainty posed by No Deal.

“Leaving the EU with no withdrawal agreement would be harmful to investment and the property sector’s ability to deliver new homes, support economic growth, regenerate towns and cities and help increase productivity – all benefits to people and businesses across the UK that the sector is keen to contribute.”

Mark Robinson, chief executive of Scape Group, said MPs had made things worse with their vote, and said a general election would be “disastrous”.

“The outcome of tonight’s vote plunges the country and the industry into further uncertainty,” he said. “While there are fundamental issues in Theresa May’s deal, this decision by MPs will prolong the economic impact on businesses and local communities up and down the UK.

“One of the biggest concerns for construction bosses will be a further decline in the pound, leading to increased pressure on material prices. The construction materials price index increased 5.3% on the year in January – a significant jump which has seen the cost of net imports from the EU rise to the highest level since 2011. Combined with the ever widening skills gap – many will be wondering how they are expected to deliver projects at the necessary rate.

“This toxic mix, with the added Brexit fear factor, has the potential to paralyse construction growth. While it is now less likely than ever that we will have our ducks in a row prior to our exit from the EU, the industry needs clarity on our access to essential construction talent from the EU, to ensure we have the manpower to deliver.

“Despite the challenging environment we still need to build, a General Election will be disastrous for the country. Right now we need a government that can reassure the industry that it is business as usual and we cannot be side lined, it is local businesses, the market and economy that bears the brunt of continued delays.”

Image: UK Prime Minister Theresa May at a security conference in Munich, 2018 (Kuhlmann/MSC/CC BY 3.0 de)