Brexit delay could paralyse sector, businesses warn Govt

 

Business leaders have warned that continuing uncertainty could bring paralysis and cause long-term damage to the infrastructure sector, following Tuesday night’s huge Commons defeat for Theresa May’s Brexit deal.

After the vote, which the Government lost by 230 votes, ministers held a conference call with senior business leaders, who ‘rounded on’ them, according to Sky News.

”Local

Balfour Beatty chief executive Leo Quinn reportedly said: ‘I would like to know when we might get back to a normal functioning government. Decisions are being delayed on HS2, new nuclear, Heathrow expansion.’

He added: ‘The enemy of business is delay and procrastination, and the construction industry will face large-scale restructuring where it cannot carry the resources it will need over the next 25 years, and capability will have to be let go.

‘Once resources are lost to industry it is very difficult to get them to come back; the next six months are critical.’

Separately, Mark Robinson, chief executive of public-sector procurement organisation Scape Group, said the vote would would prolong the economic impact on businesses and local communities across the country.

He said: ‘One of the biggest concerns for construction bosses will be a further decline in the pound, leading to increased pressure on material prices. The construction materials price index increased 5.3% on the year in January – a significant jump which has seen the cost of net imports from the EU rise to the highest level since 2011. Combined with the ever widening skills gap – many will be wondering how they are expected to deliver projects at the necessary rate.

‘This toxic mix, with the added Brexit fear factor, has the potential to paralyse construction growth. While it is now less likely than ever that we will have our ducks in a row prior to our exit from the EU, the industry needs clarity on our access to essential construction talent from the EU, to ensure we have the manpower to deliver.’

Guy Ranawake, investment director for the infrastructure team at investment firm Ingenious, said the vote makes it ‘highly likely that the date of the UK’s departure from the EU will be pushed back if not indefinitely postponed’, which would mean that both internal infrastructure and the external infrastructure that is linked to Europe should continue to operate as normal at least through to 29 March ‘and probably beyond’.

However, he warned: ‘Parliament’s decision will create continuing uncertainty on the future relationship of the UK with Europe. This has a knock-on impact on the attractiveness of the UK to both domestic and international investors, particularly for illiquid investments.’

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