Immigration: How the system can be reformed

This week the Building the Future Think Tank is serialising its 15-page report looking in depth at the current immigration system and its impact on the construction industry. Over five days we will set out the case for reform, culminating in a set of recommendations. 

In today’s final article, we look at how the system can be reformed and make our recommendations for change. 

Where do we go from here?

Our study has set out the historic reliance of construction on immigration, the impact of the end of freedom of movement, the effect of the points-based system, and where the barriers are to its more widespread use. Following the general election earlier this summer, the UK has a new government which has signalled its intent to take a different approach to immigration – a moment that undoubtedly provides the industry with an opportunity to make the case for the changes it wants to see. However, with Reform polling highly in the recent general election after making immigration a central issue, the issue remains highly politically sensitive, meaning solutions are difficult to find. 

Public opinion 

What are the practical limits to changes on immigration policy, as defined by what the public actually thinks? The most recent polling data, such as from British Future, shows that the salience of migration as an issue worrying the public has begun to rise in the last 12-18 months. However, this comes after an extended period in which public attitudes to migration have – perhaps contrary to expectations – softened considerably, particularly in the wake of the Brexit vote. 

British Future’s immigration tracker shows that until early 2016 more of the public had a negative view of immigration than a positive one, but that in that year the balance switched, and ever since then more people view immigration as a positive to the UK than view it as a negative. The latest score, for 2023 – the closest to an even split since 2016 – had the two camps on 43% and 37% respectively in favour of immigration being a net benefit to the UK (having scored 46% and 29% the year before). 

So, even despite all the public concern about high levels of unprocessed asylum claims and small boat crossings, there remains a balance of public opinion in favour of migration in the UK. Moreover, the public are more sympathetic towards managed migration to address skills shortages where they can see there are problems – including in construction. 

>> Also read: Immigration: the system needs reform for construction to flourish

>> Also read: Immigration: what Brexit changed and how construction has adapted

>> Also read: Immigration: the consequences of ending free movement

>> Also read: Immigration: why the new system isn’t working

Heather Rolfe, director of research and relationships at think tank British Future and a member of Building’s advisory panel, told us that 31% of the public say they would support an increase in migration to support construction, with 30% happy for numbers to remain as they are, while only 26% would rule out such a rise. 

She said: “Support is higher than for many of the sectors we asked about in our immigration attitudes survey. It’s not as high as social care, and doctors and nurses, but it’s still pretty high, coming in at just above teachers and hospitality staff. It probably reflects a recognition of the importance of construction to the economy.” 

In research published in 2019, Rolfe, alongside fellow authors Johnny Runge and Nathan Hudson-Sharp, argued that what people said they were concerned about was low-skilled migration, but that this is likely to have been confused with the idea of migrants making a low economic contribution. The research concluded: “In people’s minds, the support for a […] points-based system appears to be shorthand for a controlled and selective immigration system that meets the economy’s needs.” 

Rolfe said that public opinion is not in favour of a return to freedom of movement. 

New government 

Policy around immigration over the last decade has been driven at a ministerial level by the divisive politics that surrounded the Brexit vote. This left successive Conservative governments sensitive to criticisms from the right of the party, or beyond, of being “soft” on immigration. 

However, the UK now has a new government with different political drivers and a large majority, making it potentially able to respond to the mix of public opinion in a different way. Labour has promised to reduce net migration overall. But it has also said it will reform the points-based system, with prime minister Keir Starmer telling the CBI as far back as 2022 that “we won’t ignore the need for workers to come to this country”. It has nevertheless been clear that any loosening of migration policy will come with conditions attached. 

Labour’s election-winning manifesto said the party plans to link immigration and skills policy, by “ensuring that migration to address skills shortages triggers a plan to upskill workers and improve working conditions in the UK”. 

It added that it plans to “end the long-term reliance on overseas workers” in certain sectors (including construction) “by bringing in workforce and training plans”. 

Starmer’s speech to the CBI said that in return for any loosening of visa rules, “We will expect you to bring forward a clear plan to boost skills and more training, for better pay and conditions, for investment in new technology.” 

Labour has ruled out a return to freedom of movement. 

Changes to support economic growth 

If the outline of public opinion and the new government’s existing plan give a sense of what is politically possible, what then is the shape of a system that might be made to work? 

A significant number of respondents to our reader survey suggested a return to freedom of movement or rejoining the EU as the solution to the skills issues facing the sector. Around two-thirds said the end of freedom of movement had made skills shortages worse so, unsurprisingly, a massive majority (77%) said reforming the system to allow easier recruitment of overseas workers would be a benefit. 

But it is clear from public opinion and the recent election that simply ending the points-based system and returning to freedom of movement – as with rejoining the EU – is not within the realm of political possibility, however much parts of the industry might want it. So the question becomes: what are the realistic reforms that the industry might call for? 

Strategic alignment 

Something conspicuously lacking in recent years, since Rishi Sunak as chancellor scrapped former PM Theresa May’s industrial strategies, is the location of immigration policy within a long-term consideration of the skills needs of the UK economy. The Labour government appears to be implying that this will change – and it is a change the sector should wholeheartedly support. 

Currently the Migration Advisory Committee undertakes assessments, when asked, of whether skills shortages exist in certain occupations, in order to determine if those occupations should be part of the skilled worker visa scheme and/or the immigration salary list. But there is no single body able to take an overview of where economic growth is projected to come from, that has power to inform decisions on migration policy. 

As one member of the advisory panel told us: “They need to think about industrial strategy. Whatever the immigration policy is, it needs to be part of the wider system reform as to how we get the workforce in construction working in the way we need it.” 

The idea behind this is that immigration policy should not be viewed in isolation from wider industrial policy. An industrial strategy should inform a strategic workforce plan that then drives both a domestic skills agenda and immigration policy. All of the reforms outlined below are suggestions on where this policy could end up – but ultimately the specific policies should be driven by this process. 

Quid pro quo 

Construction should strongly make the argument that the government’s plan for economic growth will be to a large degree facilitated by construction and that the sector’s growth will require a degree of migrant labour. This labour will not be forthcoming under the current points-based system. However, in order to make this case, the industry will have to show it is willing to do more than has so far been done to cultivate a domestic workforce. Loosening the points-based system could therefore be envisaged as part of a quid pro quo, in which construction signs up to tough domestic training targets and commits to behave as a responsible employer. 

A deal of this kind could offer employers significantly lower salary thresholds for in-demand occupations, which would be placed on the immigration salary list on a more generous basis than hitherto. Placements could be subject to lower hiring costs for both employers and employees. 

In return, as suggested by the IPPR, the government would draw up skills and workforce plans for the relevant occupations in conjunction with relevant trade bodies and unions, and the implementation of these would be overseen by industry bodies and paid for through the existing immigration skills charge (ISC). Individual firms that are high users of the visa system would have to draw up additional individual training plans to ensure they are training domestic staff, and pay a surplus to the ISC. 

Sector deal 

However, more measures are likely to be needed in order to make a significant change. The government should explore with the industry and unions the possibility of a sector-wide deal to support the construction industry, of the same type that it already has for seasonal workers in the agricultural sector and for care workers. In both of these sectors, the government has allowed exemptions to its overall ban on issuing visas to those with skill levels below RQF level 3, after recognising the significant reliance of these important sectors on overseas workers, and the difficulties of recruiting domestically. 

Such a deal for construction could address one of the biggest barriers to use of the current system – by granting an entry route for low-skilled workers. However, these visas could be temporary, issued for specific timeframes – there would be no necessity with such a deal that visas be considered a gateway to permanent residency (indefinite leave to remain) in the UK, as skilled worker visas can be. 

Such a sector deal would again be conditional on employers meeting targets around training and the domestic workforce, to ensure that, in the medium term, lower-skilled workers from overseas are only being brought in to cover short-term fluctuations in workload, rather than be the core requirement of the sector. 

In addition, such a deal should only be agreed if arrangements can be found with robust measures for ensuring there is no exploitation or abuse of workers – such as by ensuring workers are informed of their employment rights and have the ability to change employer. 

Clearing house 

One of the main identified barriers to use of the points-based system is its requirement for a direct permanent employment relationship with the migrant worker, which leaves both worker and employer in difficulty if work unexpectedly dries up, given the unreliable nature of the construction pipeline. Ultimately, a worker has to return to their home country if work cannot be found for them by their sponsor under the current system. 

To avoid this, an organisation could be set up to act as a clearing house for the migrant worker needs of different construction employers. The clearing house organisation would be registered as the sponsor of migrant workers, allowing the worker to then move between different employers linked into the clearing house network. 

This would mean that if the work at one employer ended, a worker would be able to move to another employer connected to the clearing house. The clearing house would retain all of the sponsor’s obligations in terms of managing its licence and those employed under it. 

Professional occupations review 

A specific settlement is needed to allow the UK construction professions to take advantage of the best skilled architects, engineers, planners, surveyors and project managers across Europe. The government should conduct a specific review into the needs of this sector, looking particularly at salary levels under the points-based system – there is evidence that many architects, for example, are priced out of moving to the UK. It should also investigate urgently with ARB whether the process for mutual recognition of architecture qualifications with the EU (and with other nations) can be expedited. It should also look at the possibility of allowing students in certain professions to roll over their student visas into working visas if they have been studying in certain shortage construction professions, even if any job they have secured does not meet the occupation salary requirements. 

Employer engagement 

The research suggests that one of the principal barriers to use of the current points-based system is simple lack of awareness and engagement with it by UK employers. A campaign carried out by trade bodies, but with the official backing of the government, to raise awareness of the system and help employers overcome their fears of using it, is likely to assist in making the best use of the managed migration system that we have. 

Reform, bureacracy and stability 

The past few years have been characterised by huge instability in immigration policy. After the seismic shift of the introduction of the points-based system, policy has been characterised by constant tinkering as migration levels have risen higher than expected. For example, one member of Building’s advisory panel told us their organisation had marshalled evidence responding to a proposal by the Migration Advisory Committee, but that before the resulting changes had been implemented they were already being asked to respond to the next proposed set of announced amendments. This approach has left many of the users of the system unclear about what regulations are actually in operation at any given time. 

The industry should expect that more change is on its way – indeed further reform is necessary to get the migration system to a state where it effectively responds to the skills needs of the sector. As well as the large-scale reforms mentioned above, the government should conduct a review of the day-to-day systems and processes under which the points-based system operates, to ensures that costs and red tape are kept to a minimum. There are conflicting views in the sector about the extent to which bureaucracy is a blocker – but as good practice the government should be ensuring fees and paperwork are minimised as far as possible. 

When a revised system has been agreed, the government should be crystal clear about its aims and structures, and once it is in operation should resist the temptation to make changes until it has been given time to work. The advisory panel member cited above said: “It’s like Groundhog Day for us because we’ve submitted a 60-page document two times with evidence on shortages, now we’ll submit it for a third time, but we don’t know what the new rules of engagement will be.

“Labour haven’t said how they will make the points-based system better. From our perspective, just policy clarity from the government would be useful.” 

Recommendations for change 

In accordance with the conclusions listed above, we have produced eight principal recommendations for reform of the immigration system that would allow the construction industry to help drive economic growth in the UK. The recommendations are: 

1. Reform the points-based system to support economic growth 

Simply ending the points-based system and returning to freedom of movement is not within the realm of political possibility, however much parts of the industry might want it. Reforming the existing system in a way that ensures domestic training for the core workforce, but allows sufficient controlled migration to manage peaks and troughs in demand, is essential. 

2. Strategic alignment of immigration and industrial policy 

Immigration policy should not be viewed in isolation from wider industrial policy. An industrial strategy should inform a strategic workforce plan that then drives both a domestic skills and immigration policy. 

3. A new immigration quid pro quo 

Construction employers looking to hire from overseas should benefit from significantly lower salary thresholds for in-demand occupations, which would be placed on the immigration salary list on a more generous basis than hitherto. Placements could also be subject to lower hiring costs for both employers and employees. In return, the government would draw up skills and workforce plans for the relevant occupations in conjunction with relevant trade bodies and unions, and the implementation of these would be overseen by industry bodies and paid for through the existing immigration skills charge. Individual firms that are particularly high users of the visa system would also have to draw up their own individual training plans to ensure they are training domestic staff, and pay a surplus to the immigration skills charge. 

4. Sector deal for construction 

The government should explore with the industry and unions the possibility of a sector-wide deal to support the construction industry of the same type that it already has for both agricultural workers and care workers. Such a deal would address the lack of an entry route for low-skilled workers. A visa could be wholly temporary, issued for specific timeframes, and any deal would be conditional on employers meeting targets around training and the domestic workforce. A robust system to protect against exploitation or abuse of workers would have to be in place. 

5. Clearing house for overseas workers 

An organisation would be set up to act as a clearing house for the migrant worker needs of different construction employers. Registered as the sponsor of migrant workers, it would allow the worker to then move between different employers that are linked into the clearing house’s network. 

6. Professional occupations review 

A specific settlement is needed for the UK construction professions. A review should look particularly at salary requirements under the points-based system, issues around mutual recognition of qualifications, and routes to retain talented overseas students in the domestic industry that have studied in the UK. 

7. Employer engagement in the points-based system 

A campaign with the official backing of the government to raise awareness of the points-based system among employers and to help them understand how to use it would reduce one of the principal barriers to uptake. 

8. Bureaucracy and stability 

The government should review the systems and processes under which the points-based system operates, to ensures that costs and red tape are kept to a minimum. Once the new system is in place, the government should be crystal clear about its aims and structures, and resist the temptation to make changes until it has been given time to work.