Construction firms begin to nail their colours to the mast as prime minister David Cameron sets a date for EU referendum

David Cameron

With 23 June confirmed for the country鈥檚 referendum on the EU, the first handful of construction firms have begun nailing their colours to the mast.

On Tuesday, 197 businesses signed a letter to the Times backing 鈥渞emain鈥, including contractors Carillion and Mace, while consultants Gleeds and RLB have told 好色先生TV they too will join the 鈥渞emain鈥 campaign.

Support for leaving the EU has been harder to come by, but industry watchers expect smaller firms will be more likely to join this camp.

A 好色先生TV poll in January suggested the industry is edging in favour of remaining in the EU, but not by much and with a big proportion still uncertain. The results show 50% of our readers thought Brexit would damage UK construction, 39% thought it wouldn鈥檛 and 11% were undecided.

Now as prime minister David Cameron has revealed the terms of the deal on the UK鈥檚 new relationship with the EU, the industry needs to make its stance clear as there will potentially be big implications for the sector.

Construction bosses this week began to share their views on the issues at stake. Morgan Sindall chief executive John Morgan told 好色先生TV he believed UK-centric businesses such as his own would not be significantly affected by the referendum: 鈥淭he key thing for us is that we鈥檙e a UK only business. Economically it might not make a difference to us.鈥

However, Bovis Homes chief executive David Ritchie said housebuilders would be watching nervously to see if the uncertainty will undermine confidence in the housing market. He said: 鈥淭here will be an influence on the UK consumer and that鈥檚 the thing we have to be wary of. It鈥檚 an unknown.鈥

Those in support of remaining say leaving would threaten investment and jobs and put the economy at risk.

But those who want to leave argue the economy could flourish as Britain will be free to trade with the rest of the world, while SMEs will be free of red tape and regulation from Brussels.

Should we stay?

The first firms in construction have started to declare their intentions.

Bosses of the two contractors Mace and Carillion, alongside heavyweight clients including British Land, Canary Wharf Group and airports Gatwick, Heathrow and Manchester Airports Group, signed a letter to the Times arguing the UK will be 鈥渟tronger, safer and better off鈥 remaining in the EU.

The letter said leaving the EU would 鈥渄eter investment and threaten jobs鈥 and also 鈥減ut the economy at risk鈥.

Consultants Gleeds and RLB have told 好色先生TV they will be campaigning to stay in the EU (see below).

The 鈥渞emain鈥 campaigners in the industry argue leaving would worsen an already serious skills shortage, with a lot of construction firms currently relying on labour from Eastern Europe. Even in professions like architecture there鈥檚 a big need for foreign talent.

Investment, stay campaigners say, could also take a big hit with the uncertainty around Britain鈥檚 position and the unknowns about what will happen in the case of a Brexit, meaning investors are reluctant to commit to big projects.

Or should we go?

While the first industry firms to state a public preference this week want to remain in the EU, there is a large amount who are undecided or want to leave.

One senior industry figure - founder of plant giant JCB, Anthony Bamford - has declared his wish to leave the union before.

Writing in the Telegraph last October, he said the price of the UK鈥檚 membership 鈥渉as simply become too high鈥, arguing that the UK has lost its sovereign control and is over-regulated.

Those words were echoed in the same newspaper this week by mayor of London Boris Johnson, who said that up to 50% of UK legislation now comes from the EU.

The shackles of regulation are something that construction firms, particularly smaller ones, are keen to break. SMEs could also benefit from less overseas competition.

Brian Berry, chief executive of the Federation of Master Builders, said he suspects his members are more likely to want to leave. He said they recognise dangers with skills shortages, but added that they feel 鈥渦ndercut鈥 by European competitors and burdened with 鈥渆xtra costs鈥 from the EU鈥檚 social legislation.


Industry views

Richard

Richard Steer, chairman of Gleeds
Gleeds is loudly making the case for staying in the EU. The consultant works in nine other European countries outside its main UK base, and feels it is a more powerful force being inside the EU.

Gleeds chairman Richard Steer said: 鈥淲e think it would be a terrible mistake to withdraw from the EU. From a business point of view, we have got to be part of a major trading bloc.

鈥淭he danger is we will be a little island on the left of the EU. The world is splitting into big power bases and we need to be part of that European power base.鈥

Ann

Ann Bentley, chairman of RLB

Consultant RLB has a big presence in the EU, with a network of 30 specialist consultancies within the group operating in member states throughout. Its chairman Ann Bentley said leaving the EU could even close it off as a market for UK firms.

She said: 鈥淲e鈥檙e supporting to stay in. Even the EU itself is a big market. If you don鈥檛 have immediate access to that market, it鈥檚 more closed off to you and more difficult to do business.

鈥淚f you leave that market, the other countries are more likely to put up barriers to those who leave.鈥

Mark

Mark Reynolds, chief executive of Mace

Shard builder Mace was one of the few major contractors to stick its head above the parapet and declare it was for 鈥渞emain鈥 this week.

As a large British company employing over 5,100 people, Mace chief executive Mark Reynolds said the firm was 鈥渘aturally concerned鈥 about the threat of a Brexit.

He added: 鈥淎t a macroeconomic level we are concerned about the possible impact of an exit, primarily the stability of sterling, any increase in inflation, and interest rates that might result from a tightened monetary policy.鈥


Have your say

Do you think it鈥檚 best for the industry to stay in the EU or to leave?

  • Send your view, with the reasons, to building@ubm.com with the subject 鈥淓U Referendum鈥. Responses will be treated as suitable for publication unless marked otherwise.
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  • Take part in our survey on attitudes towards the EU - coming soon