The usual question posed to ministers with ambitious plans is: “Where will the money come from?” But in the case of Angela Rayner’s much-vaunted aim to build 1.5 million new homes over the next five years or so, largely funded by the private sector, the more pertinent question seems to be: “Where will the workers to build them be found?”
This is the dark secret that dare not speak its name in government circles but has been plonked firmly in the public domain by the industry itself – and in no uncertain terms. Amit Oberoi, executive chair of the Considerate Constructors Scheme, a trade body, tells The Independent exclusively today that the government’s plans are unachievable given current trends in the labour force. Indeed, adding pressures to build such a large number of houses at the same time as ramping up infrastructure investment in a wide range of major construction projects is “not only short-sighted but also dangerous”.
Mr Oberoi points to the “failure to tackle a growing recruitment crisis” as the key structural weakness in the government’s strategy. Other leaders in the construction field are also voicing concerns. Above all others, the building trade has to raise the alarm, embarrassing as it may be for ministers, both for the good of its workers and the sake of the millions of younger families in Britain unable to buy their own homes. It is no use for any government to promise what is unachievable.
In fairness to Ms Rayner and her colleagues, the shortage of skilled and unskilled workers is hardly new and cannot be entirely blamed on this Labour government. Indeed, soon after they came to office, Sir Keir Starmer and his education secretary, Bridget Phillipson, announced a new growth and skills levy on business which will replace the existing apprenticeship levy and include new foundation apprenticeships, helping augment the skills base. Yet the new apprentices won’t be trained and set to work building new homes, airports and solar farms overnight – and the cost of training them will, in part, be borne by hard-pressed employers now faced with a wave of pressures on their wages bills.
What the government may fairly be accused of, therefore, is that in its rush to “build, build, build”, as Ed Miliband puts it, an entirely new system of energy generation, hugely expanded airports, regeneration schemes and 300,000 houses a year, it has neglected to work out how this will be achieved. Targets and inspired speeches flow impressively unconstrained from the government, but a plan to deliver the laudable objectives is glaringly absent – a house without proper foundations.
Given that Labour won the last election on a promise of a “decade of renewal” and more long-term thinking, there appears to be a lack of urgency about the deeply concerning trends in the labour market, and in construction in particular. As The Independent reports, one-third of the current workforce is aged over 50 and will retire in the next decade. Analysis from Capital Economics and Checkatrade estimates that 244,000 qualified apprentices are needed to plug the skills gap by 2032. Presently, there are 100,000 fewer people engaged in building than pre-pandemic levels. Some European builders have been unable to return due to stricter rules post-Brexit.
Can the workers be found? It is possible but the government will need to make some politically difficult decisions in order to support the sector. Employers across the economy, and not least in the labour-intensive building trades, will find it especially challenging to deliver more houses if they also have to deal with the increase in their cost base entailed by the chancellor’s hikes in employers’ national insurance (rightly termed a tax on jobs), increases in minimum and living wage rates, and, potentially, the forthcoming improvements in workers’ rights.
All of these are excellent in principle but coming all at once, and so soon after the problems caused by Brexit, the energy crisis and the spike in inflation, it may prove too much for employers who simply cannot find, let alone afford, the staff needed to do everything the government asks of them. It is not too soon for the government to revisit the impact of its tax increases, its plan for new apprenticeships and, most politically difficult, its migration and visa policy for skilled and less skilled trades. Labour must untangle the current rhetoric to remind the UK that not all immigrants are “bad” and many are indeed essential to growth.
Certainly, the workers must be found from somewhere. Ms Rayner and her colleagues simply cannot will the ends without providing the means; and if housebuilding fails to fulfil their promises for lack of preparation, they may find disappointed voters brutally unforgiving.
