Hoskins Architects’ Thomas Bernatzky predicts the damage Brexit will do to medium-sized practices with EU outposts
As a German national who lived and worked in the UK for 10 years, and who is now director of a UK company - Hoskins Architects - in Germany, I have a view on the Brexit debate. Although I will not have a vote in the referendum, I arguably have a stake in the process. I feel obliged to voice my opinion, simply for the reason that many of those affected by the referendum are not entitled to vote: namely EU nationals who live and work in the UK, as well as a considerable number of UK nationals who live and work in other EU countries, and will not be able to vote since they have been outside the country for 15 years or longer.
In terms of the economic consequences of Brexit, it is difficult for the individual to find a reasonable middle ground between the Leave and Remain campaigns. Many experts see the overall impact on the economy as having negative effects, which will be more apparent in the UK than in the EU. For this reason, business leaders and organisations like the Confederation of British Industry (CBI) strongly support the Remain campaign. The Leave campaign claims that small businesses have little to gain from EU membership, with small companies reporting to the CBI they are ‘fed up with EU bureaucracy’.
We are a mid-sized architectural practice, just outside the 100 largest architectural practices in the UK. However, with about 40 staff across our Glasgow and Berlin offices, we would still be classed as a small business.
So what are our experiences with the EU as a small business? In terms of recruitment, we are able to employ EU citizens without the bureaucratic hurdles that overseas candidates have to overcome. In terms of business development, we are able to participate in EU procurement procedures without discrimination. As a UK business we were able to win a multimillion-euro museum project in Austria, which allowed us to establish a permanent office in Germany. We also benefit from the freedom of movement of our staff, who are able to work between our two offices without any restrictions.
Hoskins Architects’ project for the World Museum in Vienna in collaboration with Ralph Appelbaum Associates will be completed in 2017
The impact of Brexit on our business would depend greatly on the form of association with the EU that Britain adopts after leaving. Would it become a member of the European Economic Area (EEA) and the European Free Trade Area (EFTA) like Iceland, Liechtenstein and Norway? Or an EFTA member only, like Switzerland? Or would it remain completely outside any European associations and try to develop individual bilateral agreements? In the latter case, Britain would be virtually excluded from EU procurement routes.
Following Brexit, I don’t see smaller companies like ours being able to secure public work outside the UK
Much UK public procurement is regulated by EU rules, including architectural design services. A recent parliamentary briefing paper suggested that EU procurement rules are ‘controversial because they are often seen as overly bureaucratic and because they limit the ability of public bodies to buy British’. While the report acknowledges that EU procurement rules enable UK firms to secure public contracts abroad, it also plays down the importance of cross-border procurement: ‘In practice, the extent of direct cross-border public procurement is limited. An estimated 1.3 per cent of the value of larger UK public sector contracts was awarded directly abroad in 2009-2011. Some 0.8 per cent of the value of larger public contracts secured by UK companies was directly from abroad.’
Less than 1 per cent seems like a low figure for all the effort that goes into EU procurement procedures. However, it is important to understand that the EU public procurement route provides real opportunities. Without a doubt it requires a lot of dedication and perseverance, but nevertheless it is possible to secure contracts in Europe, as our own experience has demonstrated.
I do believe that UK businesses will manage to adapt to life outside the EU. However, I also believe that it will be mainly the larger companies that will remain European players. Following Brexit, I don’t see smaller companies like ours being able to secure public work outside of the UK.
Leaving the EU means UK staff members who work in our German office could have their pension rights reduced
For me, the most important question around the Brexit debate is what impact leaving the EU would have on the personal lives of our employees. We might be at risk of losing long-term members of staff due to work permit issues. Automatic mutual recognition of qualifications would cease, making it much harder for UK staff to work as ‘architects’ in the EU and vice versa. Finally, withdrawal from the EU would mean that, unless alternative arrangements were put in place, our UK staff members who spend periods living and working in our German office could have their pension rights significantly reduced. Other EU or EEA nationals who have spent periods living and working in the UK would be similarly disadvantaged.
Theoretically the UK could adopt a ‘Swiss style’ membership, which includes freedom of movement rights to EU citizens. However, since curbing immigration from EU countries like Poland and Romania seems one of the major drivers among Brexit supporters, it seems unlikely that freedom of movement will be high on the political agenda after Brexit.
Leaving the EU will reduce the number of UK citizens who will be able to ‘make it’ outside the UK, which I believe would be a great loss. I am surprised to see large parts of the British public willing to surrender the opportunities EU membership has to offer – in particular freedom of movement – and not grasping the political and personal dimension of what they could be about to lose.
Thomas Bernatzky is director of Hoskins Architects’ office in Berlin
Hoskins Architects’ design for the Archaeological Visitor Centre Berlin in collaboration with Gross.Max landscape architects