Since the EU Referendum in June 2016, much has been discussed about what Brexit means. As a mature, competitive and diverse supply chain, merchants perform a vital function in distributing primary materials and value-added goods from quarries, brickworks, sawmills, factories & ports to where they are needed, all year round, in most weathers.
Manufacturers recognise and appreciate that merchants are the traditional, established and most efficient and economical route-to-market for their goods. Most merchants and their customers operate on a ‘just-in-time’ basis. Although we have the new Trade and Cooperation Agreement, the risk is that the flow of goods is disrupted - or prices rise - or stockpiling occurs. Such circumstances may force firms to switch to a ‘just-in-case’ basis instead of a ‘just-in-time’ model.
MATERIALS AND PRODUCTS
Many merchants are experiencing shortages of some goods. The BMF and Construction Products’ Association are monitoring the situation in the CLC Industry Taskforce Product Availability Group. Economic uncertainty, financial instability and a worsening jobs market are likely to tempt international companies to review their operations. With the continuing Covid-19 pandemic, multi-nationals may not see the UK as a territory to invest significantly in (for the foreseeable future) and defer or cancel decisions on manufacturing capacity - or move production to another country. That is why striking the UK-EU Trade and Cooperation Agreement was so important.
CONTRACTS AND PROCUREMENT
Although we have the new Trade and Cooperation Agreement, the risk is that the flow of goods is disrupted - or prices rise - or stockpiling occurs. Merchants are urged to review current and future contracts to establish who is liable to pay any tariffs, duties and VAT that may now apply. For goods (e.g. timber) sold under Incoterms (see section below), the importer is liable to pay all costs. Contracts and insurance should be reviewed to check who is liable if goods are delayed in transit at ports & airports - and what obligations & penalties apply.
Incoterms is an abbreviation for ‘International Commercial Terms’ published by the International Chamber of Commerce. They are used as global terms of trade and can be found at:
UK contracting authorities are no longer required to advertise notices & tenders in the Tenders Electronic Daily of the Official Journal of the European Union (OJEU). The UK Government has instead established a replacement UK-specific online notification service for local councils and other public authorities to advertise their notices & tenders.
This new e-notification service - called Find a Tender - is now the place to see public sector procurement notices. It is free to sue and can be found here: https://www.find-tender.service.gov.uk/Search. Policy guidance is here: www.gov.uk/guidance/public-sector-procurement-after-a-no-deal-brexit
Firms will still be able to use existing portals such as Contracts Finder, MOD Defence Contracts Online, Public Contracts Scotland, Sell2Wales and eTendersNI to view low-value or location-specific notices. These arrangements will remain unaffected as now.
The Government is adopting an Australian-style points-based immigration system to end the free movement of people. Ministers have ruled out any exemption for unskilled or low-skilled workers who are vital to keep construction going. The Home Secretary has set a £26,500 salary (or going rate for certain jobs) threshold below which migrant workers will not be allowed in. Those who earn less than the going rate (but above £20,480) may still be able to enter by trading points - e.g. if the job is listed as a shortage occupation (see next section). This will seriously affect construction because we rely on migrant workers and the contribution they make. This new immigration system is expected to begin on Exit Day and will apply to both EU and non-EU citizens.
The guidance is here: www.gov.uk/guidance/new-immigration-system-what-you-need-to-know
Full policy details are here: www.gov.uk/government/publications/uk-points-based-immigration-system-further-details-statement/uk-points-based-immigration-system-further-details-statement
In March 2020, the Home Office commissioned the Migration Advisory Committee to review the UK Shortage Occupation List to focus on occupations above RQF level 3 - notably HNCs, HNDs and Foundation Degrees - for which skills are in demand due to worker shortages.
Construction has lobbied the Home Office and gave views to the MAC to argue in favour of certain trades & skills. The aim was to address (a) an aging workforce that is not attracting enough new entrants to replace those retiring; and (b) those occupations with skills that are much in demand.
The Welsh Government is strongly opposed to these immigration proposals, believing that the Home Office should think again in the light of the Covid-19 pandemic. Ministers in Cardiff have looked at the needs of the Welsh economy and concluded the growth in (amongst others) construction and manufacturing are areas to be prioritised.
At the end of September 2020, the Migration Advisory Committee presented its report and recommendations to the Home Secretary. It is 650 pages long with annexes and reviews the Shortage Occupation List for the entire economy, not just construction, and is here: https://www.gov.uk/government/publications/review-of-the-shortage-occupation-list-2020.
If you do read the Report, your attention is directed to these pages:
- page106: Scottish Government remarks on Polish & Romanian workers; and bricklayers, joiners & electricians.
- page 136: ability to meet the growth in demand for EU & EEA workers with skills.
- pages 139+140: willingness of UK workers to work and their available skills.
- page 141: training
- page 144: HGV drivers.
- page 147: basic construction skills.
- pages 453-481: chapter 6: building trades and topics like aging workforce; reliance on self-employed; falling number of apprentices & young people; number of applicants & their skills; and below-average wages.
- pages 527 & 528: chapter 6: electricians & electrical fitters and topics like waiting for the right applicant with the required skills; and increased training & higher wage rates.
- pages 641-644: chapter 9: what named occupations should be added to the List.
In our industry, the only recommended occupations are: (a) civil, mechanical & electrical engineers; (b) architects; (c) bricklayers & masons; (d) welders; (e) electricians & electrical fitters; and (f) fire alarm technicians.
Glaring omissions from the MAC recommendations include (for example) plasterers and plumbers. This is hugely disappointing and other federations have questioned what evidence was received and/or considered. The Scottish Government highlighted bricklayers, joiners & electricians as particularly hard to fill - based on evidence it had - yet the MAC rejected the case for joiners.
Another aspect of the end of free movement is new rules on recruiting. The new points-based immigration system introduces new job, salary & language requirements on employers who recruit from outside the UK - because it treats EU and non-EU workers the same. From 1 January 2021, employers will need a sponsor’s licence to hire people from outside the UK - Irish citizens are exempt. The process usually takes around 8 weeks and fees apply.
A dedicated website with videos is here: https://pbisemployers.campaign.gov.uk/
A guide for employers can be found here: https://www.gov.uk/government/publications/uk-points-based-immigration-system-employer-information
Full detailed guidance on sponsoring is here: https://www.gov.uk/government/collections/sponsorship-information-for-employers-and-educators
The Home Office has published guidance on the Right To Work and what employers must do to prevent illegal working by conducting checks before taking on new staff.
Right to Work Checklist: www.gov.uk/government/publications/right-to-work-checks-employers-guide
Which documents give someone the Right to Work: www.gov.uk/legal-right-work-uk
Check details of a job applicant’s Right to Work in the UK: www.gov.uk/view-right-to-work
EU Citizens in the United Kingdom
The UK Government has reached agreement with the EU and Norway, Iceland, Liechtenstein & Switzerland to protect the rights of their citizens who currently live here. These agreements mean that people can apply to the EU Settlement Scheme to continue living here after 30 June 2021. The scheme opened for applications in March 2019 and EU citizens who met the criteria are given either settled or pre-settled status. Certain foreign nationals are also allowed to stay without applying - notably Irish citizens or those who have indefinite leave to enter or remain in the UK. Employers may want to help their staff apply for Settled Status.
EU and Norway, Iceland, Liechtenstein & Switzerland citizens: www.gov.uk/staying-uk-eu-citizen
Apply to the EU Settlement Scheme: www.gov.uk/settled-status-eu-citizens-families
Employers’ guide to support EU citizens to apply to stay: www.gov.uk/government/collections/eu-settlement-scheme-employer-toolkit
After 1 January 2021, personal data can continue to be received from EU or EEA-based organisations into the UK for up to 6 months. In the jargon, this is called “data adequacy”. The new Trade and Cooperation Agreement contains a bridging mechanism that allows the continued free flow of personal data into the UK after Exit Day. This temporary 6-month arrangement gives the UK and EU more time to agree on what data adequacy arrangements will exist thereafter.
Personal data is any that can be used to identify a living person - including names, delivery details and IP addresses - or HR data such as payroll information.
To protect yourself, the solution is to use Standard Contractual Causes. They are model data protection clauses approved by the European Commission that enable the free flow of personal data when put in a contract. They contain contractual obligations on UK companies and their EU partners - and rights for individuals whose personal data is transferred. If you are a multi-national group of companies - and receiving data from within the group - you may not need Standard Contractual Clauses if your group already has approved binding corporate rules in place.
After Exit Day, the General Data Protection Regulation (GDPR) still applies, along with the UK Data Protection Act 2018. Guidance is at: www.gov.uk/guidance/using-personal-data-in-your-business-or-other-organisation-after-the-transition-period
The UK Information Commissioner has provided guidance and resources to help you prepare: https://ico.org.uk/for-organisations/data-protection-at-the-end-of-the-transition-period/
There are no changes to the way you send information the UK to the EU, EEA countries, Gibraltar and other countries deemed as adequate by the European Commission.