resource hub | What does Brexit mean for construction products?

What does Brexit mean for construction products?

Ben Smallwood, Major Projects Business Manager

As you’ll recall in December 2020 the UK Government finalised a last minute Trade and Co-operation Agreement (TCA) with the European Union following an intense period of negotiations and extended deadlines, made even more difficult by the COVID-19 situation.

 

The construction sector – already impacted by the effects of the COVID crisis – stood to be particularly badly hit by the prospect of a no-deal Brexit. The TCA agreement may have eased the industry’s main concerns but despite the 1,000 page document’s length, businesses have actions they may still need to take.

 

Standards and regulation

 

One of the main features of the EU single market is the harmonised regulatory standards and mutual recognition of accepted standards across the trading bloc, which contributes to frictionless trade. The UK leaving this behind raises the risk of ‘double standards’ between the two trading entities and the risk of a deregulatory ‘war’, lowering of standards to compete between trading blocs whilst increasing bureaucracy, forms and other red tape.

 

While the UK was a member state, the EU Construction Products Regulation (CPR) had the effect of removing technical barriers to the trade of construction products between member states of the European single market. Since 1993, product manufacturers operating within the European Economic Area (EEA) have been required to use CE marking on their products. This marking indicates that the product meets EU standards for health, safety and environmental protection and allows them to be marketed and sold freely throughout the EU.

 

Now that the UK has left the EU single market, there is no single CE mark used across the UK and EU and so there is a necessity to provide a quality mark for three territories, depending on where the product is intended to be used:

 

  • The EU’s marking for product conformity (CE marking)
  • The United Kingdom Conformity Assessed mark (UKCA mark)
  • The United Kingdom Northern Ireland mark (UK(NI) mark), which is additional to the CE marking in some instances. UKNI marking will supplement, but not replace CE marking for any products that are or will be placed in the Northern Ireland market

 

Third party accreditation and agreement certificates are often conditional on valid CE marking. In future, multiple marks will be needed to sell to the UK, Northern Ireland and EU market and depending on future international trade deals, other marks may be required too.

 

New terms for new times (New bodies, documents and numbering systems after the transition period)
Up to 1st January 2021 Equivalent to From 1st January 2021
CPR  = UK CPR
Harmonised European standards  = UK designated standards (Shown as EN XXXXX)
CE marking in the GB market  = UKCA marking
CE marking in the NI market  = CE or CE and UKNI marking
Technical Assessment Body (TAB)  = UK Technical Assessment Body
Notified Body (NB) = UK approved body
Notified Body number XXXX = UK Notified Body number XXXX
European Approval Document (EAD) = UK Approval Document (UKAD)
European Technical Assessment (ETA) = UK Technical Assessment (UKTA)
NANDO database = UKMCAB (UK Market Approved Body Database)

 

The challenge for our customers is not only do products need to be evaluated against different standards in order to use the relevant mark lawfully, the manufacturer may need to engage the services of a conformity assessment body (at potential cost) as part of the demonstration of conformity, recognised within the specific jurisdiction. For example, if an ETA (European Technical Assessment) was issued by a UK TAB (Technical Assessment Body) prior to the 31st December 2020 it will continue to be valid after 1st January 2021 but will not, however be valid for CE marking, unless further agreement between the UK and EU is reached.

 

The UKCA mark will eventually replace the CE marking in the UK. However, most imported goods which already carried a valid CE mark as at 31 December 2020 can still legally be used in the UK until 31 January 2022 – this may become more of an issue as we pass that deadline. Most interestingly, the UKCA mark will not be recognised by the EU for products exported to the EU so any goods exported to the EU still need to meet the CE criteria and carry the CE mark and the TCA does not provide for mutual recognition of products or standards in the same way as existed while the UK was in the EU. UKNI marking will supplement, but not replace CE marking for any products that are, or will be placed in the Northern Ireland market.

 

Movement and cost of construction materials and products

 

UK construction organisations are currently reliant on the free movement of construction materials and products between EU member states without tariffs or bureaucracy. The Construction Leadership Council estimates that in 2019 around 22% of all materials, products and components were sourced from abroad by UK construction businesses. No-deal could pose a risk of disruption to trade flows.

 

The TCA has ensured that there will be no tariffs or quotas on goods moving between the EU and UK. However, customs declarations need to be made when importing or exporting goods. Customs declarations could slow cross-border freight and affect delivery of materials, which could lead to unplanned or last minute material substitutions on site of varying acceptability. Extra care should therefore be taken on site to see products being used and ideally photographs taken of the products.

 

Workforce and access to labour

 

Although many businesses consider that labour costs have been too high for some time, EU free movement may have helped mitigate this issue. Many construction and engineering firms have been fearful of a possible skill shortage which may inflate costs and hamper the ability of the industry to deliver projects on time and to budget or may even mean certain projects become unaffordable.

 

Similarly, the system of mutual recognition of professional qualifications within the EU now no longer applies to the UK. This means, for example, that there could be complications in hiring technical professionals with qualifications based in the EEA. Further guidance on qualifications should be issued by the UK Government in early 2021, there is also some guidance on qualifications for the UK and EU member states contained in the TCA. It is perhaps an example of unforeseen outcomes and from a risk management point of view, ensuring that accepted, recognised professionals are working on projects which expose them to risk, is a key control measure of our risk management process.

 

Moreover, I anticipate that as the labour market tightens and potential economic inflationary pressures unfold in the years to come, the use of labour dependant, less material efficient wet trades on site will become less appealing due to cost and the move towards modern methods of construction will be accelerated further.

 

From a risk management point of view, it is likely that the technical standards of the EU and UK will diverge at some point in the future. It is anticipated that the UK in the short to medium term will still have access to discussions with CE, feeding into the development of standards to the EU. However, with the tug of war between an increased societal focus on building safety and enhanced scrutiny of product performance along with Boris Johnson’s ambition to light the ‘bonfire’ of red tape, it is likely we will see some divergence.

 

Whilst the TCA will head off some of the more serious concerns regarding a no-deal scenario, it has not removed every complication and close supervision of the unfolding regulatory divergence may be needed to ensure acceptable standards of risk.

 

Further guidance

 

The EU Construction Products Regulation
UK adoption of CPR as a ‘designated standard’
UK Government guidance on the CPR from 1-1-2021
UK Government – placing goods on the UK market
UK Government – using the UKCA mark
A list of “harmonised standards” (EU) which are now “designated standards” (UK) at the end of the transition period 31 December 2020. Designated standards are prefixed “BS”, “EN”, “EN ISO” or “EN IEC”, for example: EN 71-1:2014+A1:2018.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/946196/ds-0035-21-construction-products-notice.pdf

 

Product labelling

 

Northern Ireland information: Construction Products Regulation in Northern Ireland – GOV.UK (www.gov.uk)
UK information: https://www.gov.uk/guidance/using-the-ukca-mark-from-1-january-2021

 

Acknowledgement

 

Charles Russell Speechlys LLP - Paul Henty - The Brexit Deal the Construction Industry: Still some serious snagging issues

 


Read more articles on the Resource Hub or sign up to receive our blog round-up.