With the polls still tight, the battle between the two main political parties over who has the strongest policy on controlling immigration is reaching its peak. Yet the contest to be crowned toughest on immigration threatens to jeopardise efforts to address one of the other big issues of the election campaign – the chronic shortage of housing.
As far back as 2004, the Barker Review of Housing Supply made the case that 250,000 houses needed to be built annually to curtail rising prices. The Conservatives and Labour have already set out fresh plans to woo voters and address the shortage. David Cameron has promised that a Conservative administration would build 200,000 starter homes, while shadow chancellor Ed Balls outlined plans for 200,000 homes a year to be built by 2020.
But these numbers are hugely optimistic. In the 11 years since the Barker Review was published, the UK has never seen house-building reach anywhere near the levels the report recommended. True, we’ve been through a recession in the meantime, but last year, for example, only 141,000 houses were built.
A number of factors will determine whether such ambitious targets can be met, including the speed of planning approvals and the availability of land. But the most significant – as even the government’s housing minister has recently admitted – is having enough skilled workers.
The recession hit the construction sector harder than most industries. In 2008, the sector employed 2.36m workers; by 2012, this had fallen to 2.04m. The financial crisis meant building projects were curtailed and, as a consequence, workers left the industry, re-skilling in other trades. Thankfully, the economic recovery has seen demand start to rise again. However, the departure of all those workers has left a void, resulting in a skills shortage which is being felt sharply by the industry now that the good times are returning.
This skills shortage has been further exacerbated by the low numbers of apprenticeships. Figures published at the start of this year forecast that the industry will need over 200,000 new workers over the next five years, with 44,690 workers needing to be recruited annually. However, in 2013-14, just 8,030 youngsters completed construction apprenticeships, the fifth year in a row that the number had declined.
The skills shortage means that the economic upturn is causing a new set of problems. A report last month suggested that, in London, one in three of the largest construction companies was having to turn down opportunities due to a shortage of skilled labour.
In the longer term, the government and the industry needs to look at how to attract new entrants into the trade, but the more immediate issue is that it takes time to train up an apprentice to the requisite skill levels. It takes about three to four years to become a skilled bricklayer, for instance, which means that someone starting an apprenticeship today will not be fully trained until 2019. We cannot wait until then to build more homes.
This skills shortage has another damaging impact. Fewer skilled workers means that the cost of labour increases at a time when there’s an urgent need to build affordable housing. The workforce required for major or highly technical projects is also seldom met by the local market. This means that the industry needs a highly flexible, in part itinerant, workforce to call on, and it is vital that the sector is able to recruit from abroad.
The construction industry has always relied heavily on migrant workers. Historically, Britain turned to Ireland when faced with skills shortages. Immigrants recruited into the industry from eastern Europe today are high-skilled tradesmen and women, far removed from the stereotype of the unskilled, low-wage worker, employed to undercut British employees’ conditions and wages.
Neither is the sector being swamped by migrant workers. A study by the University of Oxford last year found that the number of high-skilled immigrants coming to the UK from non-European Economic Area countries dropped by 39 per cent between 2011 and 2013.
What’s more, we risk hypocrisy by turning a blind eye to the fact that, when times were tough in the 1980s, it was the British who sought employment overseas, as the fictional Auf Wiedersehen Pet so memorably dramatised.
Demonising skilled migrant workers and imposing regressive immigration policies will demolish any hope of securing the workforce we need to meet house-building targets and solve the housing crisis. Cutting off the supply of migrant workers also risks harming our broader economic prospects, given the importance of construction to the UK economy – around six per cent of GDP. As politicians play the immigration card in order to secure short-term votes, they would do well to remember the long-term picture.