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Can’t have your Brexit cake and eat it

Next Wednesday chancellor Philip Hammond will stand up in parliament and deliver his 2017 Budget.

The red briefcase will no doubt include promises to support the construction of new transport, energy and housing projects, with the mantra that these schemes will help drive the UK’s economy post-Brexit.

But while the government may be willing to back major construction projects, it is not entirely clear who it expects to build them.

For years the UK has been able to paper over the cracks of its construction skills crisis through its ability to draw on workers from across the EU.

If the reports from the weekend are true, from next month that might be a bit harder.

The Telegraph reported on Sunday that prime minister Theresa May was poised to announce the end of free movement for new EU migrants on the same day that she formally triggers Brexit negotiations.

The ramifications of any decision to stop new EU migrants from automatically staying in the UK indefinitely could be monumental for the construction industry.

Mayor of London Sadiq Khan was keen to stress this today.

A release from the mayor’s office found that almost 100,000 of the capital’s construction workers were from elsewhere in the EU.

Mr Khan said ‘hard Brexit’ could leave a quarter of the skilled construction workforce in the capital “high and dry” with any curbs having a “crippling effect on the city’s housebuilding plans”.

And this crippling effect would be felt more widely across the UK construction sector.

Last week an Arcadis report predicted that a hard Brexit would see 214,000 fewer EU nationals entering UK construction by 2020, while at the same time predicting that the industry needed to recruit 400,000 people a year to meet the country’s construction backlog.

This came after Balfour Beatty, which last year recruited one in 10 of its staff from the EU, warned that any uncertainty about free labour would exacerbate the engineering shortage and see construction costs rise.

As the country sits on a multi-billion-pound housing and infrastructure pipeline it will need a growing cohort of people from the UK and elsewhere to build them.

It is clear that the UK needs to increase the number of domestic workers it trains and reduce its reliance on EU labour.

But this won’t just happen overnight.

Last year only 21,000 apprentices entered the construction industry, an improvement on 2015 but still barely scratching the surface when it comes to the country’s requirement.

The government can’t have its cake and eat it with Brexit.

If it sees construction as one of the key parts driving the UK economy post-Brexit, contractors will need access to the right skills to deliver these projects.

Yet without free movement of labour from the EU, this will be an uphill struggle.

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