NEWS ANALYSIS: Architects are fearful that leaving the EU would affect their trade with the rest of Europe and stall growth in the UK. Are they right to be afraid? ask Will Hurst and Richard Waite
It is difficult to find anyone in architecture, property and construction with a good word to say about Brexit (see comments at the end of this article).
While the RIBA and other organisations in the sector, such as the British Property Federation (BPF), the Federation of Master Builders (FMB), and the Home Builders Federation (HBF) are remaining neutral because they have members on both sides, the individuals making their voices heard tend to be very much in the ‘Britain Stronger in Europe’ rather than the ‘Vote Leave’ camp.
One typical opinion is that of former RIBA president Jack Pringle, managing director and principal at Perkins + Will, a US-owned firm employing about 180 staff in London.
‘I think Brexit would be absolutely bonkers,’ Pringle says. ‘We’re in a fantastic position, having access to a 500 million-person market but without being in the Euro … we’ve already had two or three London clients telling us they will cancel projects if we leave the EU.
AJ survey: what are your biggest concerns if the UK were to leave the EU?
‘It’s also fantastic having access to European labour – half my office is European. If we had to go back to visas it would be a disaster.’
And, regardless of whether it’s down to ‘Project Fear’ as the Vote Leavers would have you believe, or bona fide forecasting, many commentators do predict financial and regulatory turmoil if the UK should exit the European Union following the referendum on 23 June. Only last week, the International Monetary Fund warned Brexit would cause ‘severe regional and global damage’ due to disruption to established trading relationships.
Those who disagree (or think such damage would be worth enduring in the interests of long-term gains) are strangely unwilling to go public with their views, however. Contacted by the AJ, two very well-known architects separately expressed pro-Brexit views but did not wish to be quoted, presumably because holding this opinion placed them in such a minority in this sector.
How would leaving the EU affect your business?
And they are in a minority, according to the results of an AJ online survey into attitudes on Brexit. According to the poll of more than 570 readers, 78 per cent were against leaving the EU, a figure that varies only slightly across age groups and between men and women. In fact, taking into account a small number of undecided participants, just 14 per cent of those surveyed said they were in favour of EU withdrawal.
How would leaving the EU impact on your business?
Many architects will admit there are drawbacks to EU membership but maintain its overall impact is positive and worry that their clients – particularly in property and housebuilding – would be hard hit by Brexit, a viewpoint supported by a recent report by investment bank Goldman Sachs. This analysis predicts an economic slowdown if the UK were to go it alone, with companies particularly reliant on domestic growth the most affected.
Goldman Sachs’s list of firms likely to be worst-hit includes property developers Great Portland Estates, British Land, Hammerson and Land Securities (see Comments) and housebuilders Berkeley Group, Barratt and Taylor Wimpey. ‘This group of companies is down around 8 per cent versus the market since the beginning of the year… more so than the FTSE 250,’ Goldman Sachs observed, suggesting that this was evidence of the market pricing-in the significant risk of Brexit.
And the AJ survey shows that it is large architecture practices of the type that tend to work for such clients that are most concerned about the damage Brexit might cause.
Almost two-thirds of those at large practices thought leaving the EU would be either ‘slightly damaging’ or ‘very damaging’, compared with fewer than half of those working at small firms.
Should we leave the EU?
In terms of the specific concerns associated with Brexit, the survey found ‘opportunities in or trade with Europe’ cited by 78 per cent, and ‘free movement of labour’ cited by 55 per cent
Ian Pritchard, secretary general of the Brussels-based Architects’ Council of Europe, points out that free movement in the EU applies to architectural education as well as practice, and agrees these are sensible concerns. However, he cautions that everything would depend on the settlement the UK could negotiate after leaving.
Should we leave the EU?
‘It’s almost impossible to say what would happen,’ he says. ‘These are completely uncharted waters because no country has ever withdrawn before. Britain would probably want a privileged relationship in the way that Norway and Switzerland have. Norway’s relationship is interesting. It makes a full contribution to the EU but it doesn’t have a voice like a member would have.’
For her part, PLP Architecture founding partner Karen Cook – an American citizen who has lived in London since the late 1980s – believes predictions of post-Brexit turmoil are overblown. Although she supports the UK remaining in the EU, Cook thinks it is the current uncertainty over the outcome of the referendum which has put client decision-making and purchasing on hold and that things would return to normal afterwards, whatever the result. I don’t think architecture is facing a doomsday scenario,’ she says. ‘I think Brexit would cause a hiccup.’
But what of the potential benefits of Brexit? Architects often moan about the red tape associated with OJEU and 29 per cent of those surveyed cited ‘reduced administration’ associated with OJEU and the prequalification process as a positive effect, while 27 per cent pointed to ‘simplified regulation and legislation’.
But there are many who believe this is a false hope because the British are themselves sticklers for box-ticking. Russell Curtis, a campaigner for better procurement and a former chair of the RIBA’s procurement reform group, says it is actually UK authorities ‘gold-plating’ EU legislation that makes the process so bureaucratic and presents such hurdles for smaller firms.
What are the benefits of the UK leaving the EU?
‘Given our propensity for box-ticking and aversion to risk, there’s a genuine concern that, without an alignment with EU rules, the UK procurement sector will fall back on to even more onerous and restrictive procedures rather than the liberalisation that many in favour of Brexit might hope for,’ he says.
Indeed some observers claim the best chance we have of reducing the regulatory burden on small businesses is to stay in, because David Cameron’s ‘special status’ deal for the UK includes specific measures to improve competitiveness and reduce bureaucracy. The 45-page policy paper presented to Parliament in February states: ‘Under our new settlement the European Commission has agreed for the first time to set specific targets to reduce the overall burden on businesses in key sectors. The European Commission will, in particular, focus on cutting costs for small businesses across the board. This will drive down the burden of red tape on UK businesses.’
Such promises from politicians will of course be greeted with scepticism. More generally speaking, many in the profession will feel that the short-term economic and regulatory impact of leaving the European project is beside the point, given more important considerations that have little or nothing to do with the business of being an architect. Asked to name the benefits of leaving the EU, those surveyed repeatedly cited ‘sovereignty’, with one respondent stating simply that they sought the goal of ‘political self-determination, as far as it exists’.
Architect Robert Adam, who leans toward voting to remain in the EU, nonetheless expresses serious doubts about its impact on democracy. He says: ‘My instinct is not to leave, but I’m becoming more aware of the arguments for Brexit. The democratic deficit is a serious matter, and there are issues here to do with national identity.’
Wherever one stands on Brexit, it seems a pity that some of those with similarly held concerns feel unable to express them publicly simply because – in this industry at least – they are outnumbered.
Where does the profession stand on Brexit?
The international, award-winning British architect
David Chipperfield, director, David Chipperfield Architects
The discussion about Europe is too narrowly focused on issues of trade and economy. Economic statistics can be produced to support both positions. Who knows the truth?
Fortunately, it seems clear that there are strong economic arguments in favour of staying within the economic union, but I believe that neither the debate nor the decision should pivot on this argument. Does it profit our profession to stay in or leave? How do you measure this?
The arguments for European unity are much more profound than just immediate economic considerations. The European Union is a political, social and cultural project. In the UK our politicians have always been reluctant to articulate this; therefore the rhetoric has for tactical reasons been limited to commercial criteria and has avoided explicit philosophical and political debate. This has allowed us to pretend that we don’t need to be ideologically engaged in this project.
Unless we embrace the reality of the European Union, we cannot be taken seriously in Europe
Having maintained the symbols of sovereignty, and reassured our Eurosceptical tendencies that there is nothing deep in our engagement, we are free to argue about the commercial pros and cons. To confirm this secular approach, the prime minister – while we weren’t watching – surrendered without fuss the ‘ever closer’ commitment, a basic principle of European unity. While this tries to deal with Eurosceptic tendencies, it robs the argument of its strongest weapon and denies an articulated conversation about the true potential of European unity.
Unless we embrace the reality of European Union in all its potential and stop imagining that we can pick and choose what takes our fancy while leaving out those bits that we don’t like the look of, we cannot be taken seriously in Europe.
The major contractor
Mark Reynolds, chief executive, Mace
As a large British company employing more than 5,100 people – nearly 4,000 in this country – Mace is naturally concerned about the possible impacts of the UK exiting the EU. Our view is that it is best for the UK to remain within the EU.
At a macroeconomic level we are concerned about the possible impact of an exit, primarily the stability of sterling, and any increase in inflation and interest rates that might result from a tightened monetary policy. We also see a potential threat to the UK’s success in attracting foreign direct investment (FDI), especially in the property and infrastructure markets.
For our industry specifically, any significant restriction on labour movement could lead to further skills shortages in a sector already somewhat reliant on talented workers from the EU. We believe these impacts could affect the ability of our industry and supply chain to deliver much-needed infrastructure and homes, which the government has identified as essential if we are to remain globally competitive.
The major consultant
Uwe Krueger, chief executive, Atkins
The nature of our business means we rely heavily on the availability of the best qualified engineers and scientists to support our national, European and international clients. The availability of talent in Europe without restrictions as well as our European client base are important factors in Atkins’ success. We fundamentally believe that it is in our best interest that the UK remains in the European Union.
First and foremost, we consider that this is about Europe’s economy, peace and security. These are important to our business, our people and the communities in which we work. If we are to have influence over these important matters, we have to be part of Europe. Otherwise, we will be an outsider looking in, and that is a much harder position from which to influence.
At the same time, we believe that Britain’s initiative to reduce bureaucratic complexity and encourage entrepreneurship and common sense in the European Union merits our full support.
The former RIBA president
Angela Brady, director, Brady Mallalieu Architects
I’m Irish and I think that if the UK exits the EU, it would have devastating consequences for both Britain and Ireland given that Ireland is our biggest trading partner. Brexit would cut off a lot of inward investment, and can you imagine how EU procurement rules would be thrown up in the air with nothing to replace them? The UK needs to be wholeheartedly involved in Europe and to try to make it better.
The UK architect
Luke Tozer, director, Pitman Tozer Architects
The referendum seems like an Orwellian construct to distract us from actually resolving the issues. We would certainly be better off if we expended the energy devoted to the referendum on solving the migration and housing crisis.
Sadly I doubt Brexit would free us from the pernicious elements of EU procurement rules, simply because it’s the UK’s legal profession’s interpretation of them that’s mostly the problem. I’m confident that what would replace them would warm the cockles of Sir Humphrey Appleby’s heart. After all we British invented and gave India Red Tape.
The property developer
Robert Noel, chief executive, Land Securities
As a business leader I can foresee the impact leaving the EU will have on the real-estate sector in the near term, and I believe it will be very painful for our industry.
If the UK votes to leave, we will face several years of uncertainty while an exit treaty is negotiated. It took Greenland, a nation with a population the size of the smallest parliamentary constituency in the UK, two years to negotiate its exit from the then EEC in the mid-1980s; and in Greenland’s case there was only one really hot topic: fish. The UK is an important part of the EU and a negotiation to exit will be long and complex.
There is no doubt in my mind that longer periods of uncertainty will stall business decision-making, and that is bad news for the economy and bad news for property. We will be facing an immediate downturn that could be deeper and longer than those of recent history such as the early 90s or the late 00s.
The UK architect working in Europe
Geoff Denton, partner and architect, White Arkitekter
As a British architect who has spent the last 20 years working for Swedish practices, I remember the practical challenges we faced before Sweden joined the EU – a long and time-consuming business to get visas and so on to allow us to work in each other’s country.
White is keen to continue working in the UK, bringing a Scandinavian attitude to the UK market. We have invested in this by recently opening up a studio in London. Brexit represents a challenge to these plans. It will impact on our work here and will also affect the 20-plus Anglo-Swedish families/relationships that are part of White Arkitekter’s growing international team.
All the positives of an open exchange, friendliness, collaborations, knowledge-sharing, which have been possible to date will be damaged, having a negative impact on future generations.
The European architect working in the UK
Elisa Pardini, Italian architect and director at London-based Pardini Hall
Referendums are always good, because the population needs to be heard and addressed. But at the same time the Brexit referendum looks like a political move, more to do with getting votes than actually solving problems. It seems there isn’t a proper plan in place if Brexit does happen.
This has led to a moment of uncertainty, and that is affecting a few commercial projects. Some people are holding off from investing in UK at this stage. They are waiting to see what will happen.
Personally I can’t see many benefits of the UK leaving Europe. The problems facing the UK are more international and won’t be solved. There are no national solutions to international problems, and ours is an age of global problems.
In Italy and other European countries there are people that don’t like the EU and are supporting the Brexit, hoping that this will start the end of what we now know as EU. But the majority of people hope that it won’t happen.
Austin Williams, director, Future Cities Project and associate professor of architecture, XJTLU, China
For me, the essence of the debate is of a higher order of importance than the personality clashes or business tribulations being weighed up by hack journalists and promoted by hack politicians.
I am opposed to the EU in the same way that I am opposed to the House of Lords. Both are primarily unelected chambers, which contain too much power and too little accountability – the very opposite of democracy. Those that want to vote ’yes’ with the mission to democratise it, are pissing in the wind.
In the same way that I am a UK democrat but not a Loyalist, I am a proud European but not a supporter of the EU. These are different things! Being against the EU is not the preserve of little England Ukippers. In fact I am a left-winger who recognises the fundamental importance of democratic sovereignty. Even though I am not a fan of democracy-lite referendums, at least I hope the result will reflect a detailed argument on the core issues at stake.
If we want to create good legislation that reflects the popular will in this country then that is done through the democratic mandate. If European planning legislation, for example, happens to coincide with your own views, it is purely coincidental, and there would be nothing you could do – except appeal to the courts – to oppose it.
The international award-winning Danish architect
Kim Herforth Nielsen, founder and creative director of 3XN Architects
The EU is as much about fostering democracy and interdependence as it is about building economies and strengthening trade. It nurtures an important cultural connection between all of the various members - a meaningful attempt to support and value our rich cultural diversity, democracy and build connection in the face of an increasingly divisive world. Therefore, I think it would be very unfortunate for the UK to leave the European Union.
The EU has created opportunities and streamlined business for us as architects working all over Europe. Should Britain exit the EU, I foresee increasing challenges for European architects in the UK and, equally important, for British firms pursuing work elsewhere.
Britain, like Denmark, has benefited from the EU. As a global leader in business and especially the financial industry, the UK and London risk terrific fallout from exiting the EU. As the building industry is the ‘canary in the coal mine’ and usually the first to feel the effects of an economic downturn, we can assume that we and our colleagues and friends will feel the impact of this before many other sectors.