This morning, the Daily Telegraph reports that the Institute for Government (IfG) has urged Angela Rayner, the Housing Secretary, to “open the door to more migrants” in order to deliver Labour’s promised “building boom”:
“The IfG suggested this could be done with seasonal workers’ visas commonly used in agriculture. […] Major housebuilders tend to rely on subcontractors which go out of business during market crunches, fuelling the shortfall.”
On the face of it, it isn’t nearly so bad a plan as the headline might lead one to expect. Despite some politicians’ misguided insistence that we must produce our own fruit-pickers, seasonal visas tend to be the one area where Britain imports labour on a genuinely temporary basis, rather than letting people settle here and then bring their family over.
It is also true that the abject state of our housebuilding sector presents a major hurdle to any quick boom in building. (The fact that vital parts of the industry “go out of business during market crunches”, by the way, is the real reason why developers ‘land bank’ – to keep a steady pipeline of work, i.e. land with planning permission, in hand.)
But although it might be an effective short-term fix, this proposal also highlights a chronic problem with immigration policy: if the industry gains the ability to just import whatever workers it needs, what incentive does it have to invest in training up British workers, which is more time-consuming and expensive?
After all, the Telegraph reports that the Conservatives were already trying to import their way past the construction skills shortage:
“The Conservative government last year added several construction jobs to its shortage occupation list, allowing for lower visa application fees and salary requirements. They included plasterers, carpenters and bricklayers, among other roles.”
Remarkably, this was actually a more liberal approach than is mooted by the IfG, as it doesn’t restrict people to seasonal visas. But the history of the Shortage Occupation List – introduced towards the tail end of New Labour, overseen almost entirely by the Tories – is basically an object lesson in perverse incentives, as I noted last year:
“…pointing out that the shortage occupation list (introduced in 2008) has led to ten per cent of employers reporting skills shortages in 2022, more than triple more than the three per cent in 2011, is awkward when you have presided over almost the entire lifetime of the policy.”
The IfG suggests offsetting this danger by having Skills England to develop a strategy for the construction sector. But that might be tricky to pull off if the relevant skills are provided by SME sub-contractors rather than our small number of large housebuilders – especially if a more liberal immigration regime is introduced. Why would they shoulder the additional expense, in those circumstances?
No government will wean the UK off its dependence on imported labour until it is prepared to create the conditions where business has to invest in training up our own workforce. Where a short-term skills shortage needs to be bridged, it ought to be done in such a way that it is clear from the start that it isn’t permanent, for example by making the addition of a trade to the SOL conditional on a plan for domestic training and tapered, so that the flow of easy imports has an explicit end date.
Otherwise, that sort of investment will be forever postponed to Jeremy Hunt’s long run, which never arrives.
