Brexit could cost the UK construction industry almost £10 billion, a report to the mayor of London has warned.
The Cambridge Econometrics study for the Greater London Authority found that the sector’s gross value added figure could be £9.6 billion lower in 2030 than if the UK remained in the EU, and would also hit the creative industries.
Assuming a hard Brexit with no transition period after exiting next year, and no trade deal with the EU, the UK construction industry would grow by an average of less than 1 per cent each year, reaching £107.1 billion in 2030, the analysis suggested.
This compared with a figure of £116.7 billion that year if the split was to be avoided.
Some 43,000 construction jobs would be lost from the ‘no Brexit’ 2030 total under a worst-case scenario, the report added.
The creative industries would also be hit, with gross value added 2.3 per cent lower, and a 1.8 per cent drop in employment.
‘One important question that faces the creative and cultural industries,’ said the report, ’is whether the UK will be able to continue to attract and retain a labour force with relevant high-calibre skills from the rest of the world, in order to maintain its reputation in these industries once the UK leaves the single market.’
It added that a ‘major issue’ facing the construction sector was a shortage of skills.
‘Once the UK leaves the single market, it is likely that the skills shortage could get worse if the new agreements don’t allow for free movement of people,’ it says. ’This could result in even higher pressures on wages, as labour supply contracts, causing construction firms to face considerably higher project costs.’
RIBA urged ministers to take steps to protect the UK’s ’world-leading architecture sector’, which the institute said contributed £4.8 billion a year to the economy.
’Firstly and most importantly, the government must give European architects living and working in Britain certainty about their status and a much clearer message that they are welcome here,’ said a spokesperson.
’The government is currently drawing up plans for its post-Brexit immigration system. We have been clear that this must ensure it is possible for skilled architects from across the world to come to the UK and practice.
’It is vital that we retain the mutual recognition of architects’ qualifications with the EU and secure a trade agreement with the EU that maintains mutual market access and services trade. The RIBA will continue to make the case for the sector to the government and ensure that the voice of architects is heard during the negotiations.’
Deputy mayor for culture and creative industries Justine Simons said: ‘The thing that gives London its creative edge are the people who power the industry – talented, dynamic individuals who have chosen to make London their home and contribute to the life and soul of the city.
‘The government must do everything it can to ensure the capital remains an attractive place for creatives to put down roots. This means ensuring the capital doesn’t lose talent to other European cities, and safeguarding our deep and longstanding trade relations with the EU. It is clear that a no-deal, hard Brexit, without a transitional deal, will place all this under threat.’
The Creative Industries Federation said: ‘We must ensure our future relationship with the EU allows the very best talent to work both here and abroad. We must also make sure that rules on areas such as broadcasting and intellectual property allow us to build on the current levels of trade and investment we enjoy with the EU.’