Labour will need to loosen immigration rules to find an extra half-a-million construction workers required to meet its housebuilding target, economists have warned.
Ministers are pledging to build 1.5million new homes over the next five years – equivalent to 300,000 per year – and have proposed an overhaul of planning rules in order to meet their ambition.
But Capital Economics have said the Government will also need a further 500,000 construction workers in England to fulfil their goal.
They judged this would be a ‘struggle’ at the same time as Prime Minister Sir Keir Starmer is pledging to reduce net migration to the UK.
In a new report, the researchers said ministers could consider ‘carving out visas for construction workers’ as it was ‘unlikely’ that domestic workers could fill the shortfall.
‘With 234,400 net additional dwellings in England in 2022/23, there is an annual shortfall of about 65,000 homes that need to be built for the Government to meet its homebuilding target of 1.5 million homes between 2025 and 2029,’ the report said.
‘But even if the Government is successful in ungumming the planning process and 300,000 home approvals were granted each year, the risk is that there wouldn’t be enough construction workers to build the extra homes.’
Capital Economics noted how ‘construction employment in England has been on a downward trend’ over the past year.
‘The relationship between net additional dwellings and construction employment in England suggests that around 500,000 (29 per cent) more construction workers are needed, or 2.4 million in total, to meet the Government’s target of 300,000 new homes a year,’ the report added.
‘Existing labour shortages in the construction sector suggest this number of workers would be hard to find.’
The researchers added: ‘What’s more, the Government’s pledge to reduce net inward migration means there is likely to be a smaller pool of migrant workers available.
‘So, at a time when labour supply is already constrained, the Government’s ambition to reduce net inward migration will only make it harder for the Government to meet its homebuilding target.
‘Of course, the need for more construction workers could be satisfied by the domestic labour force, but we think this is unlikely.
‘Either way, to have a chance at meeting its homebuilding target the Government needs to ensure there are enough workers, perhaps by promoting training schemes and/or carving out visas for construction workers within total migration targets.’