UK construction firms advised to ‘tread carefully’ following latest Brexit news

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  Posted by: electime      25th September 2018

Following a new Brexit report that outlined a restriction on lower-skilled EU workers, the UK construction sector is being warned to ‘tread carefully’ to avoid damaging business.

The advice comes from construction insurance expert Mark Herbert as a new and final Brexit report revealed that the government has been advised to restrict lower-skilled EU workers from coming to Britain.

The report, released on 18 September from the Migrant Advisory Committee (MAC), set out advice to the government to impose restrictions to lower-skilled migrants coming to Britain after the country leaves the EU*.

The MAC committee’s role was to assess the impacts of immigration and give post-Brexit recommendations for after the free movement of labour ends.

Construction site workers fall into the ‘lower-skilled’ bracket, which if restricted could pose a threat to industry recruitment with a knock-on effect to trade and overall profitability in the sector.

The construction sector has always relied heavily on an influx of EU continental workers to make up a skilled workforce and there are estimated to be more than 120,000 EU migrants working in the industry*.

Losing migrant workers would significantly increase the cost burden on UK building firms if they had to recruit and train domestic workers to replace EU nationals.

Construction sector bosses have voiced growing concerns over the impact of a hard Brexit on their companies and insurance expert Mark Herbert has been offering Britain’s first Brexit Insurance consultations to help ease worry in the industry.

Mark advises firms to ‘play it safe’ during this time of uncertainty and ‘tread carefully’ whilst Brexit negotiations are still taking place; he said:

“The construction industry is certainly holding its breath at the moment and there is a real air of doom and gloom in the sector as everyone is being kept in the dark and is looking for answers.

“One of the main concerns for UK construction firms is that instead of using foreign workers they will start having to increase their costs by training up domestic workers. They are also likely to have an increased wage burden as they are forced to use higher skilled UK contractors to plug the gap.

“Companies should take steps to protect themselves against Brexit to stop their turnovers plummeting and the best way to do this is to continue with projects that are within their remit, and stick with safe work that they know they can handle comfortably.

“Whilst Brexit negotiations are taking place it is best to avoid taking on larger and more ambitious acquisitions. If you take on newer, bigger contracts now then firms risk not finishing jobs. It is best to play it safe whilst we find out exactly what the outcome of Brexit will be.

“Firms are also facing uncertainty over wage roll structure due to the changing status of who they employ and they need to make sure their insurances are up to date and correct.

“Luckily there are steps companies can take to minimise impacts and Construction Insure can look at wages and turnover and let them know if they are insured correctly.

“We can also look to forecast what possible change these Brexit impacts may have on their insurance premiums.

“Many contractors do not understand the different type of labourers they use when trying to identify who relates to what on payroll breakdown for insurance purposes. This is crucial information which dictates premium and if gotten wrong can void policies or create huge additional premiums.

“It’s an even bigger risk when trying to purchase a policy online where the client may be tempted to bypass certain questions just to get a cheaper premium. This is an easy trap to fall into but can have dire consequences.

“Construction insure speaks to each client and defines to them what is a manual, labour only and a sub-contractor wage roll and ensures the clients policy has been rated correctly.”

*Full Migration Advisory Committee (MAC) report: EEA Migration here – published 18 September 2018.

**Research by the Construction Industry Training Board, IFF Research and the Institute of Employment Research at Warwick University found one third of companies in the construction industry currently employ foreign workers.

The researchers said there were 122,094 construction workers working in Britain but born in other EU states, in 2015. These represented 45% of UK construction’s total 270,653 migrant workers.

Any firms wishing to book onto a free Brexit Insurance consultation should ConstructionInsure.co.uk or call 020 3958 6868.