Neil Merrett assesses what the General Election on 12 December could mean for a HVACR sector desperate for an end to the impasse over how parliament should proceed with Brexit
The industry’s calls to define a clear direction for leaving the EU, while fully avoiding its ‘worst case-scenario’ of a no-deal withdrawal will continue for at least several more months with an additional New Year Brexit extension agreed and a General Election set for 12 December.
So what does this all mean for wider concerns about the viability of the heating and cooling sectors as they face a range of financial and legislative challenges?
Earlier this month, the Queen’s Speech announced than a new Environmental Bill and the formation of a reformed building safety regulator, which will both have significant implications for the HVACR sector, would be among key priorities for the next parliamentary session.
However, this current parliament will shortly be dissolved after a failure by Prime Minister Boris Johnson to try and force through a complicated Brexit withdrawal agreement in just three days, rather than over an extended period of time.
Failure to gain MP support on a three-day timetable for passing the agreement made it impossible for Mr Johnson to honour his stated aim of leaving the EU on 31 October. Rather than seeking to get any further parliamentary support for an amended withdrawal agreement, the prime minister instead managed to gain parliamentary support to hold a General Election just before Christmas.
Fears that the UK would automatically crash out of the EU without reaching a deal have been delayed temporarily after the European Commission formally agreed to parliament’s legally-mandated request for a further Brexit extension.
Previous threats by the government in recent months that it would seek to leave the EU without any form of withdrawal agreement on 31 October had been met with alarm by bodies from across the construction industry that have warned about the “horrendous” possible impacts for the HVACR sector.
This builds on concerns raised earlier in the year from BEAMA warning that any significant change in costs to ensure regulatory compliance for goods coming in from or going to the EU might be too hard for some companies in the sector to withstand.
Yselkla Farmer, policy and marketing director with BEAMA, said in September’s H&V News magazine that the UK manufacturing sector was entirely framed around structures and standards that the company has developed and adopted as part of the EU.
She said, “So even without a no-deal Brexit, a move out of that foundation is incredibly disruptive. A no-deal just creates a more sudden cut-off and pulls that entire foundation from the industry’s feet really.”
Where are the certainties?
With an election now due, political certainties - which key industry bodies working in the building services sector say are a vital concern - have remained in short supply. Calling for a General Election without settling on any agreement of what Brexit should actually mean will likely lead to even further uncertainty.
An increased majority for Boris Johnson, for instance, would likely see the passing of his Brexit deal. This introduced a compromise by breaking a key promise to the government’s coalition partners, the Democratic Unionist Party, to put no border or similar customs barriers between the UK mainland and Ireland.
The possibility of a Labour government or coalition government could meanwhile see a group formed that would seek to hold a confirmatory referendum by asking the public to give approval for any deal passed, or introduce a ‘softer form’ of Brexit. This could potentially mean retaining a customs union with the EU or even staying part of the single market for goods and services.
Even these likelihoods are supposition at this point due to the unpredictable nature of a General Election, especially during an unprecedented dispute about the future direction of the UK and its regulatory alignment with its most significant global trading partner.
Payment and safety priorities
Outside of Brexit, which will likely touch on all aspects of the UK’s future policies concerning the environment and economic growth, the next parliament will also find itself having respond to the first part of findings from the Grenfell Tower fire inquiry. The first part has focused on what occurred in response to the 2017 blaze.
A second part of the inquiry, which is yet to be heard, will focus on the circumstances of the fire that will also look at building design that could have further implications for how construction work is undertaken, audited and maintained in the longer-term.
At the same time, several consultations have been held to try and determine how concerns raised in an independent review of building regulations following the Grenfell Tower fire can be effectively addressed.
The review, led by Dame Judith Hackitt, was highly critical of existing building legislation that she defined as being too complex and failing to define responsibility for a building and its vital systems. She also called for a rethink in terms of guaranteeing the quality of products and materials used in a project.
Any new government will also come under pressure from major building services bodies such as BESA, the SEC Group and others that have been pushing parliament for regulatory reform around payment practices. This includes several proposed pieces of legislation intended to separately mandate the use of ring-fenced retentions and ensure that project bank accounts are part of all public sector work.
The proposed legislation for retentions reform was introduced by MP Peter Aldous in January 2018 as a Private Member’s Bill. Subsequent readings of the proposed legislation have faced multiple delays as parliament has sought to grapple with Brexit and its potential impacts on domestic politics.