With six months to go to Brexit, we urgently need a deal on services

The clock is ticking relentlessly towards Brexit at the end of March and all the news is about what happens if there is no deal.

The news is not good for architects. The Governor of the Bank of England was reported as saying there was the possibility of a 35 per cent drop in house prices in the event of no deal. There would be a massive hit: to developers, some of whom would be unable to continue to trade; to those with mortgages to service; and to confidence more generally. Any consequent drop in the exchange rate would raise construction costs. And the hit to public finances would mean that the public sector would be in no position to build additional housing.

It now seems the Governor was in fact referring to stress test assumptions for tests the banks had undergone. However, this does not change the general story that no deal would have a huge impact on the construction sector.

But, more importantly, there is increasing evidence that, even if there is a transition or standstill period, little is likely to be done before we leave in March other than to sketch out in very broad terms the areas to be covered in the future relationship with the EU.

So we have no idea at all what will happen over time to, for example, recognition of professional qualifications or procurement, where the no-deal contingency plans involve not only loss of access to EU markets, but also the creation of a new UK procurement regime by March. And we have no idea what the immigration regime would be.

What we do know is that the Chequers plan places priority on securing future access for goods, but not services. Other sectors, notably the City, are planning on the basis that market access will be reduced, are constructing their new operations within the EU27 and will soon start moving staff.

Most banks think that once they have moved they will not move back even in the event that Brexit is called off. So this loss of jobs will affect the demand for office space and housing, and the loss of tax revenue will affect demand for construction generally.

The architectural practices most directly affected will need to undertake contingency planning, as the government is requesting that they do – though what precise contingencies they should plan for remains unclear.

The profession as a whole and their representative, the RIBA, must do all it can urgently to lobby MPs, individually and collectively to ensure that achieving the best possible deal for trade in services is an absolute priority. They might also consider whether or not they think Brexit should be stopped.

David Green is director of Belsize Architects

‘Architects are being represented on Brexit’: Response from Alan Vallance, chief executive of the RIBA

I agree with David Green that with six months to Brexit, we urgently need a deal on services. I continue to make the case both publicly and privately that we need the government and the European Commission to reach a deal that understands the importance of trade in services. As we’ve been highlighting in our updates for members on the government’s technical notices, a no-deal Brexit would be a disaster for architects, their clients, the economy and society. Mark Carney’s recent remarks should be taken very seriously and reflect research we have published for the architecture sector.

David is right that it is important that the RIBA lobbies policymakers, and this is precisely what we have been doing since the referendum result. The RIBA has met with secretaries of state, ministers, and their opposition counterparts, MPs and peers. We’ve given evidence at select committees, we’ve hosted roundtables between civil servants and architects on issues from the immigration system to the needs of SME practices, including one this week on public procurement. This is off the back of the work the RIBA has been undertaking to inform the debate, including published research on Brexit scenarios, surveying members and developing new policy recommendations.

As a result, we have seen the government make some important commitments for the sector. This summer it published its Brexit White Paper which outlined support for an ongoing recognition of professional qualifications agreement with the EU, and a commitment to stay in international standard-setting bodies. These are priority asks for RIBA and the architecture sector, and it was positive to see them recognised in this flagship paper.

There is a lot of noise about progress in Brussels, but until a deal is done it will be difficult for architects to plan for the future

In our response we also made it clear we were concerned that the government conceded that the UK and EU would not have the same level of access to each other’s markets. This is partially the result of the government and European Commission trying to navigate their own big, tricky political principles – the former on delivering the result of the EU referendum, and the latter in protecting the principles of the single market. This makes us no less determined to advocate for the best for architects.

We have not been making this case alone. With representatives from the financial, legal, accountancy and other professional service sectors, we wrote to Theresa May to make the case for a deal that works for the services. We’ve been working closely with our colleagues in the built environment sector and will be hosting events with them at this year’s party conferences. The Architects Council of Europe has backed the RIBA’s position for an ongoing mutual recognition of professional qualifications agreement – timely and useful support from our colleagues in Europe.

We have been tirelessly seeking to inform and ensure our members get the best deal, but it is the responsibility of the government to act. There is a lot of noise about progress in Brussels, but the simple fact is that until a deal is done, it will be difficult for architects to plan for the future. We will continue to update our ‘no deal’ technical notices page, to help provide architects with the latest information. Through this critical stage of the Brexit process the RIBA will continue to meet policymakers, be vocal on political developments, publish reports and undertake new research. With such little time left, support from the profession is crucial and with the increased threat of a ‘no deal’ situation, we will be sustaining and increasing our efforts. Architects are and will be represented on Brexit.


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