Britain plans looser foreign worker rules to plug labour gap

Britain is planning to tackle chronic shortages in the labour market by opening its doors to more foreign workers, starting with looser rules for the construction sector.

While the priority for ministers is to tackle inactivity among the UK workforce, government officials acknowledge that will not be enough to fill the 1.2mn job vacancies and say targeted immigration is needed to plug labour shortages.

In the week that Rishi Sunak, prime minister, announced a crackdown on migration by illegal routes, the government has quietly been clearing the way for more overseas workers to come to the UK as it searches for ways to boost growth.

The process will start in the construction sector, with the adding of key jobs to the government’s “shortage occupation list”, the people close to the discussions say.

The government’s migration advisory committee (MAC) has recommended that bricklayers, roofers, carpenters, plasterers and people working in the construction trade generally should be among those added to the list.

The Home Builders Federation said: “If we are to increase housing supply and deliver the government’s housing target it is essential we have continued access to skilled labour from abroad.”

Suella Braverman, home secretary, is expected to accept the recommendation and the MAC is set to publish its report next week, possibly straight after chancellor Jeremy Hunt’s Budget, government insiders said.

The shortage occupation list allows employers to bring in key staff on a lower salary threshold of £20,480, compared with the current “skilled worker” salary threshold of £25,600, or at 80 per cent of the going rate for the occupation — whichever is higher. There are also reduced visa fees.

Current jobs on the list include care workers, vets, civil engineers and graphic designers.

The hospitality industry, which like the construction industry has suffered serious shortfalls in workers since Brexit took effect, is not expected to be added to the list at this stage.

However, the advisory committee was told by ministers last month to begin a broader review of the list, which will report in the autumn, with hospitality and retail businesses demanding to be added to it.

Hunt’s Budget next week is also due to set out proposals to encourage disabled, sick and older people into the workforce — the centrepiece of the government’s labour market strategy.

Kate Nicholls, UK Hospitality chief executive, said despite the government’s efforts to encourage economically inactive people back into the labour force, “the inescapable conclusion is there aren’t enough people active in the economy to be able to fill all the roles that we need”.

Vacancy rates have improved in some of the worst-affected sectors but remain high.

Many roles in construction are already eligible for visas, but the sector is dominated by smaller employers who may be less able to pay high fees and comply with the bureaucratic requirements of sponsoring migrants.

Sir Robert Buckland, former justice secretary, said the public was open to the idea of accepting more foreign workers to fill vacancies if they had been assured that illegal migration was under control.

“I think the prime minister sees the need to sort the small boats problem not just as an end itself, but as a way of restoring the integrity of our immigration and asylum system in the wider public interest,” he said.

The government said: “We work closely with the MAC to ensure our points-based system delivers for the UK and works in the best interests of the economy, by prioritising the skills and talent we need and encouraging long-term investment in the domestic workforce.”

The MAC may be cautious about adding lower-skilled roles to the shortage list, however, given recent experience in other sectors. Last year, care workers were added to the list to help relieve the crisis in a sector of vital public interest.

The result has been a surge in overseas hiring, with more than 50,000 care and senior care worker visas granted since February 2022 — but there are also growing concerns over exploitation and underpayment. 

Madeleine Sumption, head of Oxford university’s Migration Observatory, said there was “a debate about how much shortages matter”, adding that in a sector such as hospitality, “you wouldn’t necessarily say the consequences of shortages have devastating human costs”.

Vacancy rates for food and accommodation service businesses are now 6.6 per cent, according to the Office for National Statistics, down from a peak of 7.9 per cent between April and June last year, but still far higher than the historic average.

Additional reporting by Jim Pickard