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Articles from the Silver Shemmings Ash Team on contractual matters, recent case law changes and items of interest in the construction and property world

BREXIT And The Carbon Tax by Cat Westmacott

July 12, 2018 | Silver Shemmings

This is the first of two articles to be written about 2016’s changes within the Construction sector and how to build sustainably in the future

BREXIT VOTE

Earlier this year towards the end of June, the British people made quite a volcanic decision when our nation decided to leave the EU. Like many Londoners I was upset by this decision: Our capital is made up of a vast range of communities and cultures working together to make it the desirable place that more than 28,000 tourists visit every year. I am still enamoured by the joke suggestion to create ‘Londependence’. Not only did I vote to remain because of the talent and value our European cousins bring, but  also for another very valid ‘sustainable construction’ related reason: The cost of leaving the EU would have a greater impact on the cost of living and not just within our daily lives, but also in our long-term plan for a sustainable future. A survey recorded by Smith & Williamson states that at the beginning of 2016 only 15% of construction and property executives in the UK were pro-Brexit. However, the Financial Times that reported in early October that the Construction industry was actually expanding.

THE COST OF MATERIALS

Within the Construction sector, many of the specialised materials, particularly for ‘Passivhaus’ structures are imported from EU countries. The cost of building materials is much more expensive to import to the UK (but cheaper for EU members). Not only will the cost of materials go up, but the number of skilled workers from other (EU) countries will likely decrease – a possible 215,000 EU workers according to the engineering and management consultancy, ARCADIS.  In recent years there has been a steady rise in the use of Cross-laminated timber (CLT). This has become so significant that the use of steel and concrete is decreasing.  CLT can be erected very quickly, and can make it easier to meet BREEAM (Building Research Establishment Environmental Assessment Method) requirements.  The timber, and hence many of the suppliers, originate in Austria and Germany.  The cost of importing CLT from the EU has already gone up and is likely to increase if we leave the single market. With Brexit looming, despite the recent activities at the High Court, if and when we do eventually leave the EU we’re going to miss out on some beneficial ways of cutting long-term costs within our homes.

CARBON TAX

Architects, Contractors and Developers should all now be aware of the new tax being applied to all new build residential developments in London. The foolish dream of ‘Londependence’ will probably never happen and Brexit will, but fortunately, our new Mayor has a plan! A recent change in London planning policy means there is now a ‘Carbon Tax’ which applies to every new residential building designed for and built in London.  As of 1st October 2016 the Carbon Tax will ensure new buildings emit 35% less carbon dioxide into the atmosphere. New residential developments of 10+ units (a unit being a house or a flat) must have an Energy Assessment (policy 5.2 of the London Plan) setting out how much carbon dioxide they will emit, which must then be paid to the local council as a tax for the next 30 years. If Developers are able to find new ways to ensure the building is more than 35% more carbon efficient then their tax will be less. This new tax will prevent developers from producing homes that may be an investment for their future, but not of our planet’s.

Author Cat Westmacott is a Legal Secretary at Silver Shemmings Ash and also leads our CSR initiatives

At Silver Shemmings Ash, we provide seminars and training alongside our core activities in contentious and non-contentious matters, the purpose if these is to facilitate a greater knowledge and understanding of construction and property law. There remains a considered lack of training in such areas for companies and one to which we look to address.

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