That the Committee has considered the draft Architects Act 1997 (Amendment) (EU Exit) Regulations 2019.
The regulations were laid before both Houses of Parliament on 18 February 2019. They are part of the Government’s programme of legislation to ensure that if the UK leaves the EU without a deal and implementation period, there will continue to be a functioning legislative and regulatory regime. Leaving the EU with a deal remains the Government’s top priority. That has not changed. However, the responsible thing to do is to accelerate no-deal preparations to ensure that the country is prepared for every eventuality. These regulations are made using powers in the European Union (Withdrawal) Act 2018 to fix legal deficiencies in retained EU law, to reflect the fact that the UK will no longer be an EU member state after exit day.
Our architectural sector is a global leader and plays a significant role in the British economy, with an export surplus of £437 million in 2015 and involvement in key global projects such as the transformation of the Reichstag building in Berlin and the Smithsonian National Museum of African American History and Culture in Washington DC. We want to protect and enhance that position over the coming years.
Let me provide some context for and background to the regulations. The EU’s mutual recognition of professional qualifications directive enables European economic area nationals to have certain qualifications recognised in another member state. That includes the recognition of suitably qualified architects. It is a reciprocal arrangement, allowing UK and other EEA nationals the opportunity easily to register to practise across Europe and allowing UK practices to recruit the best European talent. The Architects Act 1997 sets out the specific procedures for registering architects in the UK. The recognition of qualifications of EEA applicants is carried out by the competent authority, the Architects Registration Board, which is an arm’s length body of my Department.
There are currently three routes to recognition for an EEA architect wishing to register in the UK. The main route to recognition for an EEA national architect is through an automatic recognition system. To qualify for automatic recognition, an EEA national needs to meet three tests. They must have an approved qualification, which means one listed in annex V to the mutual recognition of professional qualifications directive, and they need access to the profession of architect in an EEA member state and a statement from their home competent authority confirming that they are fit to practise.
I am glad that the Minister recognises the UK’s world-leading status in this field, but in saying how much he recognises the contribution that the sector makes, he seems to be failing to recognise the concerns of the Royal Institute of British Architects, which has pointed out that one in five architects working in the UK is from another EU member state. RIBA is asking for a more permanent basis for a new system of mutual recognition of professional qualifications. Why are the Government not providing that?
It is certainly our intention that, once this has landed, the system of recognition will be reviewed. One thing that the regulations do is to freeze the qualifications at a particular date, so that we can buy ourselves some time to have exactly those discussions. I will come to this later, but in relation to other countries, such as Switzerland, that cannot be accommodated in these regulations, there have been very productive conversations, which will allow mutual recognition in the future.
The regulations allow applications made before exit day to be concluded under the current system as far as possible. For future applications, the regulations will freeze the current list of approved qualifications under the EU’s mutual recognition of professional qualifications directive. As a result, after EU exit in a no-deal scenario, an individual holding an approved qualification will be able to join the UK register of architects if they have access to the profession of architect in their home state. That approach will preserve access for UK practices to EEA-qualified architects. The process will be open to anyone with an EEA qualification and access to the profession in the corresponding state, regardless of their citizenship.
The Minister is not addressing the fact that although the qualification requirements are frozen during the review period, however long it may last, at the end of the period new qualifications may be required. How long does he expect the review period to last before we get a settled position? Does he think there will be a detriment to people if new qualifications come in during the review period?
Those are perfectly reasonable questions. We do not anticipate significant movement in the number of qualifications. Initially, the risk is low, but we would like to get the system under review as much as possible. If it becomes clear that a qualification needs to be accommodated, it is perfectly possible for us to take steps to do that on a one-off basis. The intention behind the system is that we maintain the ability of UK architect practices to access talent from across the world. Let us not forget that quite a lot of architects who come from non-EEA countries work in UK practices. They are accommodated in the UK perfectly happily.
Let me make some progress. We will remove general systems as a route to registration, because it is a long and costly process that is not utilised often and it places a significant unnecessary burden on individuals and the Architects Registration Board. Therefore, applicants without an approved qualification, including applicants who would have previously qualified for acquired rights, will be able to pursue the prescribed exam route and undertake further examinations and periods of study to allow for registration. That is the route currently utilised by third-country nationals.
The regulations provide a legal basis for the Architects Registration Board to continue to communicate with other EEA competent authorities to facilitate recognition decisions, ensuring that the Architects Registration Board can verify that the applicant meets the UK’s high standards of competence. Currently, the ARB facilitates information sharing through the EU internal market information system. Without a deal, we cannot be confident that the ARB will continue to have access to that important information-sharing system; therefore, the regulations place a requirement on the applicant to obtain the relevant information from their home competent authority, should the ARB not be able to secure it correctly.
The regulations will remove the rights to temporary and occasional provision of services, because without guaranteed access to information systems and an agreed process for reciprocation, that route will become unwieldy and of less value. That will have a minimal impact on the sector, because only 12 people are practising on this basis. Historically, fewer than 20 people have practised as architects in the UK on a temporary and occasional basis at any one time.
Our overall approach to these changes is in line with both the policy and the legal intent of the European Union (Withdrawal) Act 2018, and it enacts the policy that the Government set out in the guidance document in January. The draft regulations serve a specific purpose: to prioritise stability and certainty if the UK leaves the EU without a deal or an implementation period. The draft regulations will ensure that the UK continues to have access to top European talent after we leave the EU, thereby helping to maintain our reputation as a global leader in architectural services. Thereafter, the regulations provide a stable basis for Parliament to change the law when it is in the UK’s best interests to do so.
It is a pleasure to serve under your chairmanship, Mr Bailey. I will start with some comments from an article in dezeen, an industry online publication, from March 2017:
“Politicians have failed to grasp the value of London’s booming architecture industry, which is worth more than the city’s industrial design, graphics and fashion sectors combined and growing almost twice as fast, according to a new report by the mayor’s office. The London’s Architectural Sector report states that the city’s architecture industry is worth £1.7 billion and is growing at 7.6 per cent every year.”
That figure of £1.7 billion for London is set against the industry’s value of £4 billion to the economy nationally. The industry’s rate of growth in London outstrips that of the creative industries as a whole—they were growing at about 3.9% a year when the article was written—and London’s entire economy, which at that time was expanding by about 3%. The dezeen article continues:
“‘The value of architecture in London may be undervalued by creative policy makers,’ says the report. ‘The sector is 38 per cent bigger than the product, graphic and fashion design sectors.’”
In the article, the director of the London festival of architecture said:
“We cannot take the success of London’s architecture sector for granted. Our research shows that this success—including booming exports—is driven by a diverse workforce from all over the world…We look to the government to negotiate responsible post-Brexit trade deals if London is to remain the world’s architectural hub.”
That goes to the heart of the regulations. We must secure the future of the UK’s booming and well-respected architecture sector.
I am pleased to hear a recognition of the importance of the sector to London, but the sector is particularly important to my constituency. We can see the contribution that architecture has made to my constituency simply by looking out of the window. Architects based in my constituency and well beyond are concerned that the freeze, as the Minister described it, will become an ice age. The Government have failed to provide a clear date on which the review will conclude and any new system will be in place. It would be good if the Minister could provide reassurance on that to allay fears in the sector.
I am sure that the Minister has clearly heard my hon. Friend. Perhaps the Minister will, in his concluding remarks, give some confidence and security to the sector—it is very important to my hon. Friend’s constituency—in recognition of its value to the UK economy.
Although the regulations go some way to addressing the concerns of the architectural sector, they give rise to further concerns about the secure future growth and stability of the industry. They propose a seemingly short-term solution to provide the sector with some relief in the days after March 29. The regulations do little, however, to make up for the damage that the industry has faced since the referendum, which has caused an alarming amount of uncertainty for businesses in the last two and a half years. That has led directly to the postponement of projects up and down the country as this period of chaos has badly damaged the investment market.
An article on Consultancy.uk referred to the “Global By Design” document published at the start of last year by RIBA, which looked at the opinions of some 1,000 RIBA members. The article talks about the £4.8 billion gross value added to Britain’s economy every year by the sector, and it states:
“A large part of the architectural sector’s pessimism seems to stem from the fact it is so heavily reliant on easy international trade. The UK architecture industry is the largest exporter of architectural services in Europe, and according to RIBA’s report, since the referendum, one fifth of architects have considered taking on even more work internationally. This point is further driven home by the fact that 74% of architects believe that access to the EU single market is necessary, if they are to expand their international workload. Without this apparent life-line, future growth in the industry could be severely hamstrung.”
I do not want to set hares running about a cataclysmic decline of the sector, but there are clear concerns about its future. I hope that the Minister takes them into account in all his consideration of future arrangements.
I will be brief. Despite the Scottish National party’s long-held and unqualified opposition to the UK’s withdrawal from the European Union, we understand that if we do have to leave, in whatever form Brexit eventually takes, it is important that the UK Government secure some kind of continuity. Therefore, we will not oppose the regulations. From my reading of them, they will simply put into place arrangements that will be needed to establish a framework to enable a transition that is as orderly as possible, with as little disruption as possible, if there should be a catastrophic no-deal Brexit despite last night’s historic vote. I am satisfied that, in and of themselves, the regulations will have little impact on businesses, charities or voluntary bodies, and no significant impact on the public sector.
What assessment, if any, has been made of the new regulatory and bureaucratic burdens that the regulations will place on businesses? I am thinking particularly about small practices. It is worth noting, as others have done, that in its advice to members, the Royal Institute of British Architects has said that Brexit, with or without a deal, will have “far-reaching implications” for the architecture profession and for the built environment sector generally—[Interruption.]
The Chair
Order. I am sorry to interrupt the hon. Gentleman. I remind Government Members that it is very discourteous to carry on a prolonged and audible dialogue when another Member is speaking.
The industry is bracing itself for big changes to the rules on freedom of movement and the ability to do business, as well as expecting changes to product and environmental standards in the construction sector, and to the future funding of higher education and research. Surely the Government can see that if Brexit has to happen, it would benefit the UK enormously to become something of a magnet or a destination of choice for young, ambitious, talented and creative people, including architects.
As the hon. Member for Great Grimsby said, we need access to the very best talent and skills, but we hear evidence that the conditions being created by the Government are actually driving skilled EU nationals from our shores. Almost half of EU-born architects say that they have considered quitting the UK, and it would seriously damage the sector if even a small percentage of them did so. The Minister has insisted that the UK will still have access to top European talent, and I would appreciate it if he explained how those two ideas work together.
As I understand it—this was also raised by the hon. Lady—the average annual starting salary for an architect in the UK is around £28,000, which is significantly below the £30,000 that is required to qualify for a tier 2 visa. I fear that it is another example of the Government not quite thinking through the consequences of what is essentially an ideologically driven and self-created set of red lines.
If we have to go through the self-inflicted pain of Brexit, statutory instruments such as this one must be put in place. As I said, we will not oppose the regulations, but I would be grateful if the Minister could answer the questions I have asked, particularly about his view of the UK’s ability to attract, as he described it, the very best European talent. The immigration policy makes it clear that that simply cannot happen.
I thank Committee members for reviewing these regulations. I will attempt to answer some of the questions that have been raised.
First, we acknowledge that the regulations are a temporary fix. Having consulted the industry, we have designed the regulations specifically to provide some immediate security and stability to architects who are operating at the moment and to those who might come in the near future. It is our intention to review the situation pretty quickly, but unfortunately I cannot give the Committee a date. Given that such professions are of high standing and that it takes quite a long time to qualify, one would hope that the level of movement in them will not be swift. Nevertheless, we are committed to reviewing the regulations. From conversations with European counterparts, I know that there is a recognition of the steps we are taking with the policy to recognise qualifications, and possibly a desire to reciprocate.
Part of my job is the discovery of all sorts of strange organisations across the world, and there is one, believe it or not, called the European Network of Architects’ Competent Authorities—the ENACA. At a recent meeting, although I gather that no formal decisions were made, a number of other competent authorities in EEA countries recognised what we were doing and were keen to reciprocate, and to continue to recognise UK-qualified architects where feasibly possible. There are moves already—it would be desirable, as in a number of other professional areas—to seek some kind of mutual recognition. We will review the matter, but unfortunately I cannot give hon. Members a date.
We are very mindful of the fact that architecture is a significant industry of great international repute. It builds buildings and designs other structures not just in Europe, but across the world. The Hong Kong floating airport on an island was designed by a British architect, and we seem to specialise in remarkable bridges across the world. There is a lot of stuff that we can do, and we are very keen to preserve that ability. In order to do so, we have been engaging significantly with the industry.
Given that I appear to be the Member for the whole of Scotland, I ask the Minister for the whole of England whether any assessment has been done on the impact on microbusinesses—very small businesses and one or two-person companies.
There might be a misunderstanding here. Fundamentally, the regulations set out that the recognition of the person’s qualification to practise stays exactly the same. The only thing that changes is that, instead of the Architects Registration Board being able to get the information required to prove that the person has the qualification, the person has to get that information in the event that we do not have access to it. Fundamentally, the ARB will operate in the same way, but the route of access to the information will become the obligation of the individual. It will not be within the ability of the ARB, because of the lack of access to that information.
Competent authorities in the EU may decide to continue to provide the flow of information, in which case nothing will change. We are very keen, in introducing the regulations, to ensure that there is some stability for EEA nationals. We hope that the EU and the competent authorities will reciprocate, but Committee members will understand that that is not under our control. However, we are seeing movement in Europe suggesting that they are keen to do so. In theory, the cost to business should be minimal, because it is just about the flow of paperwork to prove that the qualification is valid.
We are in conversation with the industry, through our general engagement, about the impact of immigration. A discussion is going on, brokered by us, between industry and the Home Office about the impact of the immigration policy that the UK might put in place. We will continue to keep that conversation up and running.
I want to take the Minister back to the question of IMI documentation. It can sometimes be difficult for individuals to secure that paperwork, so there may be delays. Will he encourage reciprocity of arrangements to ensure that there are no delays if the IMI information is not available to the ARB?
Absolutely. Nobody wants there to be any delay in the provision of information, and the ARB will seek to obtain that information itself informally and on an ad hoc basis. There is no intention on either side of the channel to hold up the approval of architects’ registration. We want to find a way to co-operate on that process. There is a technical, legal basis, because the IMI may not be available.
Having said that, I have a professional qualification myself—I am a chartered accountant—and if I wanted to practise chartered accountancy in an EEA country, I would expect to have all the documentation in my briefcase when I went to do so. It is not that difficult. If I am paying 450 quid a year for my registration at the Institute of Chartered Accountants, the least it can do is to provide me with my practising certificate, if I am a practising chartered accountant. Sadly, as a moderate accountant, I have not practised for many years.
Do not forget that people with a professional qualification have a requirement to do what is called CPD—continuing professional development—to maintain their suite of skills. That applies just as much to architects, and of course the CPD process is approved by the various competent authorities. The idea that architects qualify, never communicate again with their approving body during their professional life and then cannot find the paperwork when they need it is not a true reflection of the situation, but I understand what the hon. Member for Argyll and Bute was saying.
I hope that that has covered most of the questions. I am grateful to Committee members for considering the regulations. We recognise that the industry is an important one for the UK. Many of the industry’s comments that the hon. Member for Great Grimsby referred to were probably made before we released our policy, which the industry broadly approves of, albeit on a temporary basis. I hope that the Committee will join me in supporting the regulations.
Committee rose.
The second route, known as general systems, provides for recognition for EEA nationals who do not have an approved qualification. The general systems route allows them to map their qualifications and experience against UK standards with the Architects Registration Board. The applicant is offered compensation measures—that is, the opportunity to undertake additional training to make up any differences in qualification. It is a long and costly process, which on average only four people pursue annually.
The third route facilitates the temporary or occasional provision of service. It allows EEA professionals to work in the UK in a regulated profession on a temporary basis, while remaining established in their home state. Typically, fewer than 20 EEA architects pursue that option at any one time.
If the UK leaves the EU without a deal, the mutual recognition of professional qualifications directive will no longer apply in the UK. The regulations will ensure that UK architectural practices can continue to recruit the best European talent and maintain their global reputation as world leaders in the field of architecture. The policy intention is to provide the sector with confidence that almost all applicants will be able to register in the same way after exit day as they do currently. That is the approach favoured by the sector, which recognises the skills brought by these architects as contributing positively to the UK’s reputation as a world leader.
The draft regulations are necessary to ensure that the Architects Act 1997 continues to function appropriately if the UK leaves the EU without a deal or an implementation period. I hope colleagues will join me in supporting the regulations, which I commend to the Committee.
The article goes on to say that
“68% of architects have already seen Brexit impact their revenue stream, as they had projects put on hold…more than 2 in 5 architects (43%) had projects cancelled since the EU referendum.”
That represents a rise since the last time RIBA published such a report. The Government must now ensure that the sector can recover fully and that it is given the opportunity to grow, following our withdrawal from the European Union at the end of this month.
Chiefly, the regulations fail to guarantee that the UK’s architecture field will continue to be able to attract and retain some of the world’s best architects. Immigration is integral to the success of the architectural sector in the UK, and one in five architects working in the UK is an EU national. Those workers are integral to the creation of new homes, businesses and communities. They enrich our culture, improve our environment and raise our living standards. They diversify technical skills and support exports through language skills and global market knowledge. Despite that, the Government have failed to provide them with assurances that they will be able to continue to share their knowledge with their British colleagues.
In the event of a no-deal Brexit, the mutual recognition of professional qualifications directive, which the Minister mentioned earlier—it enables European architects to practise in the UK without taking additional exams or training—will no longer apply. There will be significant problems because additional barriers will be created. I urge the Minister to do everything possible to reduce those barriers and make the supply of those skills as seamless as possible. The barriers that would spring up as a consequence would halt the ability of EEA-qualified architects to register to practise in the UK as they do now, and they would drown the industry in red tape and bureaucracy.
The Consultancy.uk website has mentioned the potential for a talent exodus. It states that KPMG ran a study that found that
“young, well-educated and high-earning EU nationals are the most likely group to be planning to return to the mainland. As many as 10% of EU nationals with post-graduate degrees, who earn above £50,000 a year are considering the move, creating the potential for a large talent shortage for employers”.
Although it is recognised that that will be focused mainly around public sector services, such as the NHS, the architecture sector has said that the situation may have an impact on it. The article states that
“the architectural scene would likely be similarly stricken by a shortage in talent, should a Brexit be realised that does not protect the right of EU workers to move freely”,
and it goes on to mention that the MRPQ directive enables the free movement of those professionals. Without that directive, even if free movement rights were in place, protected industries would have no standardised way of recognising the equivalence of degrees obtained in different countries, potentially making it very difficult for skilled workers to find employment in Britain. I will talk about tier 2 thresholds later.
The Consultancy.uk article continues:
“Nearly half of respondents…working for large practices told RIBA they are concerned that the prospect of no MRPQ agreement could see them lose valued staff. Confirming these fears, 60% of architects questioned said that they have considered leaving Britain due to Brexit, an increase of 20% since RIBA’s initial survey”
back in 2016. There are still issues that the Minister must take on board, and I hope he is aware of the comments that the industry has shared quite freely on many occasions.
Regulations 7 and 8 may solve the immediate immigration problems facing the architectural industry, but the Government need to consider the long-term factors that the legislation fails to address. The regulations are designed to be a temporary solution, as I have said, and there are two areas in particular where they fall short of the system that the UK currently enjoys as a member of the European Union. Although the qualifications that the directive protects and recognises will be recognised, the list will become out of date as new qualifications inevitably become part of the industry. I asked the Minister about that in an earlier intervention. That will have the consequence of creating a two-tier system for the registration of EEA professionals.
I turn to the question of future proofing the sector. RIBA’s chief executive last year—I hope he is still in post—said that
“many EU architects continue to face uncertainty about their future in the UK. This is unsustainable: it is having a real-time impact on recruitment and is unquestionably a threat to the success of our economy and society. The UK Government must make urgent decisions that allow the sector to thrive today.”
He went on to refer to redundancies that have already taken place in the architectural sector—Conran and Partners has made a handful of redundancies, and I hope that redundancies will be limited to that handful—as well as delays to the start of projects, or to certain stages of different projects. He cites as at least part of the reason uncertainty caused by the Brexit process.
On top of that, the regulations fail to protect the recognition of UK-qualified architects’ qualifications in the EEA in the event of a no-deal Brexit. Those architects will have to rely on the individual registration policies of the 27 member states. The Government must look to establish with the EU a new mutual recognition agreement as soon as possible in order to provide reciprocity, and a date for that would be very welcome. Without such an agreement, the process by which architects can make visa applications seems uncertain. I would welcome any clarification that the Minister can provide.
Architects may well have to apply for a tier 2 skilled visa, and the £30,000 minimum salary requirement for such an application will be unachievable for the large number of architects who do not meet that threshold. Just 5% of tier 2 applications made in the sector between November 2017 and April 2018 were accepted, and that does not give the sector a great deal of confidence that that will be the easiest route through which to secure the talent it requires. Furthermore, becoming a tier 2 sponsor is hard for many architecture firms, because it is an expensive and lengthy process. Has the Minister done any work with the architecture sector and RIBA to assess exactly how much that will cost, and whether the sector can bear the cost? According to RIBA, the number of EU architects registering to practise in the UK has dropped by 42% since 2016. Do the Government recognise that denying the architecture industry a free flow of talent, skills and knowledge will impair its growth and stability?
In his previous role as culture Minister, the right hon. Member for West Suffolk (Matt Hancock), who is now Secretary of State for Health and Social Care, described the architecture and design sector as
“vitally important to our future as an outward looking, creative nation”.
We cannot achieve that future if we only pay lip service to that sentiment. I recognise that he is no longer culture Minister, and there is a new Minister in place, but I hope that the Government continue to express that sentiment. We simply cannot achieve that goal if we do not have the right people in place to make it a reality.
The architecture sector is looking for access to the best talents and skills; trade agreements that open access to foreign markets; support for education, research and innovation; action to address the UK’s infrastructure and housing shortages; and common standards and low compliance costs. Perhaps the Minister, in his closing remarks, will offer the sector some confidence that all of its top issues are being taken into consideration.
There have been roadshows and roundtables across the country—London, Birmingham, Newcastle and Cambridge, with more planned for Scotland and Northern Ireland—to understand the impact on the industry, and the industry’s readiness for a no-deal situation. Those discussions go beyond the scope of the regulations. We have met specifically with Foster and Partners, Allies and Morrison, and David Chipperfield Architects—three internationally renowned practices that produce work across the world—to discuss the implications for them.
One thing under consideration is the cost to business, which the hon. Gentleman from Scotland raised. There has not been a review of the cost, because we believe that it falls below the £5 million threshold, but the only imposition that we can foresee is a possible slight delay to the recognition of qualifications. However, we do not think that that will be significant, as long as the Architects Registration Board has access to the appropriate paperwork. Given that the regulations place the obligation on the applicant to produce the paperwork from their home country, the speed of approval is fundamentally in their own hands.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Architects Act 1997 (Amendment) (EU Exit) Regulations 2019.