UK budget loosens immigration to step up competition for construction workers

Bricklayers, carpenters, plasterers and roofers will be added to the UK’s “shortage occupation list”

British Chancellor Jeremy Hunt outside 11 Downing Street in London before delivering the UK budget. He loosened fiscal policy over each of the next five years of the budget, easing the major belt-tightening in the later years he was forced to announce last year.

The British government said it will loosen immigration rules in a bid to attract more foreign construction workers to the UK and address a labour shortage in the industry. The move may sharpen the huge competition for building workers across Europe, including workers needed in Ireland to build new homes. 

Five construction occupations will be added to the UK’s “shortage occupation list” after ministers accepted recommendations from their Migration Advisory Committee, or MAC, which counsels the UK government on immigration, budget documents showed. The professions include bricklayers, carpenters, plasterers and roofers. 

The move is a major boost to UK house builders amid a chronic shortage of workers. The list allows employers to bring in foreign workers on a lower salary threshold than the usual “skilled worker” level and pay lower visa fees.

However, the development may hamper a drive in Ireland to recruit construction workers at home and abroad because of the shortfall in all types of building professionals, amid plans by the Irish Government to build many thousands of homes in the coming years to meet the housing crisis.

The UK's Office for Budget Responsibility on Wednesday estimated that net migration flows will average 245,000 a year, rather than the 205,000 assumed in its November forecast. 

Despite calls from the UK hospitality industry to add their workers to the list, the MAC said it did not currently recommend adding any occupations in that sector. Current jobs on the shortage occupation list include health and care workers, civil engineers, vets and architects.

In his budget speech, Chancellor of the Exchequer Jeremy Hunt outlined a series of measures designed to entice people back into work, including the over-50s. He did not mention the loosening of immigration rules in key sectors, which were instead included in the budget documents. 

Mr Hunt unveiled a £22bn (€25bn) a year fiscal stimulus after an easing of the headwinds battering the British public finances. He loosened fiscal policy over each of the next five years of the budget, easing the major belt-tightening in the later years he was forced to announce last year.

Extending free childcare support, new business investment incentives and extra military spending were among the most expensive measures unveiled by Mr Hunt.

Stimulus

The measures represent a moderate loosening after the big package of spending cuts and tax rises announced at last year’s Autumn Statement as the UK battled to restore its fiscal credibility. 

Mr Hunt was forced into tightening after markets were rocked by the huge package of unfunded tax cuts unveiled by his predecessor Kwasi Kwarteng under the short-lived premiership of Liz Truss. 

George Buckley, chief UK economist at Nomura, said the stimulus “is not peanuts” and “was rather larger than we had been expecting.” “That will not be something that will pass the Bank of England by,” Mr Buckley said. “These numbers will feed into the bank’s models and its policy discussions,” he said.

Bloomberg and Irish Examiner