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The Guardian
9 hours ago
- Business
- The Guardian
Tighter immigration rules could hit UK net zero mission, report warns
Tough rules announced in the government's immigration white paper could jeopardise the UK's net zero mission by causing labour shortages, a report has warned. Labour's white paper released last month included plans to raise the minimum qualification for skilled worker visas from A-level equivalent to degree and to maintain the higher salary threshold of £38,700 introduced by the outgoing Conservative government last year. A report by the Centre for European Reform (CER), calculates that more than half of the foreign-born workers doing 'green jobs' in the UK – 260,000 out of 465,000 – would not have been allowed in under the new rules. Ministers are relying on employers to raise wages and provide more training in order to attract domestic workers into these roles, but John Springford, an associate fellow at the CER, said that could push up the costs to consumers of going green. 'If labour shortages raise the cost of decarbonising buildings, fewer people will insulate their homes or buy heat pumps,' he said. Using Office for National Statistics data, the CER defined a green job as one in which more than a third of the worker's time is spent on green tasks. Many of these are in the construction sector, given the need to retrofit homes with low-carbon technologies, for example. The report also suggests construction jobs more generally may be difficult to fill under the new visa regime, casting doubt on the government's target to build 1.5m homes by the end of the parliament. 'Construction is labour-intensive and has a lot of employee turnover, because the work is physical and seasonal. Given that the government's aim is to expand housebuilding and decarbonise buildings concurrently, the sector is most at risk of labour shortages as a result of the government's immigration proposals,' the report says. Labour has announced that the existing 'immigration salary list', which allows people doing specific types of job to be brought in on lower pay, will be replaced with a similar 'temporary shortage list'. To avoid this becoming a long-term measure, the relevant industry will be expected to set out plans to train and recruit more UK workers. The CER said that using a shortage list as a safety valve could be problematic because the higher salary threshold elsewhere means migrants in the sectors with shortages are unlikely to be able to shift into other jobs, leaving them vulnerable to exploitation by the employer who sponsors their visa. This problem arose in social care where holders of health and care visas were subject to exploitation by bad employers, with little chance of moving to another post. 'The government should keep an eye on labour shortages in occupations that are crucial for its net zero and housebuilding missions, and relax visa rules if needed,' Springford said. 'But offering exemptions to the rules for specific occupations is risky.' Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Other options mooted in the report include offering 'green visas' for jobs that contribute to achieving the government's target of hitting net zero by 2050, or reducing salary and skills thresholds right across the economy. Keir Starmer announced the immigration crackdown last month, claiming it marked the end of 'a squalid chapter for our politics, our economy and our country' in which the post-Brexit Conservative government had overseen soaring migration. Net migration hit a record level above 900,000 in the year to June 2023 before dropping sharply after a series of changes made by Rishi Sunak's government, including tightening the rules for visa applicants to bring in dependents. In the 2024 calendar year net migration was 431,000. Starmer said net migration would fall 'significantly' as a result of the changes he has announced. As well as potentially causing labour shortages in key sectors, economists have said lower net migration could prompt the independent Office for Budget Responsibility to downgrade its growth forecasts. The government has been approached for comment.
The Guardian
18-02-2025
- Business
- The Guardian
Europe's population crisis: see how your country compares
The rise of the far-right could speed up the population decline of Europe, projections show, creating economic shocks including slower growth and soaring costs from pensions and elderly care. Anti-immigration politics is on the rise across the EU, as shown by the gains made by far-right parties in the 2024 elections. Meanwhile, the anti-immigration Alternative für Deutschland (AfD) is polling second in the run-up to the German federal election this month. But those wanting to shut Europe's borders must contend with a stark demographic reality: the continent's native population is expected to fall sharply over the next century in an era of low birth rates. Experts warn that European societies will age more quickly without immigration, bringing forward a host of economic challenges as workforces shrink and care burdens grow. 'Most politicians on the centre-left and centre-right recognise that immigration is needed to ease demographic pressures,' said John Springford, an associate fellow at the Centre for European Reform thinktank. 'They have sought to focus on tougher – and often inhumane – asylum rules in the hope that stricter border enforcement will provide political cover for higher regular immigration. 'But radical right parties are increasingly challenging the mainstream consensus. Those countries that manage to hold the line against demands to cut working-age immigration will be in a stronger position economically in the long run.' The latest projections produced by Eurostat, the EU's official statistics agency, suggest that the bloc's population will be 6% smaller by 2100 based on current trends – falling to 419 million, from 447 million today. But that decline pales in comparison with Eurostat's scenario without immigration. The agency projects a population decline of more than a third, to 295 million by 2100, when it excludes immigration from its modelling. Eurostat's baseline projections assume countries will maintain their average net migration levels from the past 20 years, but the Guardian has examined figures also published by the agency with this assumption left out. Likewise, the UK's Office for National Statistics publishes population projections that include a zero net migration scenario. Italy, France and Germany, where anti-immigration politicians have recently made inroads, would face big population declines in a zero-immigration scenario. Italy's prime minister, Giorgia Meloni, has made cracking down on migration a priority in her first term, but her country has one of the lowest fertility rates in Europe and its population would more than halve by the end of the century under zero immigration. In Germany, where the anti-immigration AfD is polling second, the population could shrink from 83 million to 53 million over the next 80 years if its borders were completely closed. And in France, where the National Rally won the first round of legislative elections last summer after campaigning for restrictions on incoming people, a zero-immigration scenario would mean a population fall from 68 million to 59 million. Only a handful of EU states would notice little difference from closed borders: Romania, Latvia and Lithuania, all countries that have experienced a net outflow of people. Instead, in most of Europe, populations would not only shrink in the absence of current immigration levels, but also become older as the number of working-age people fall relative to elderly people. Today, 21% of the EU population is aged 65 or over. In Eurostat's baseline scenario, this proportion will rise to 32% by 2100, but in the agency's zero-immigration scenario, it will increase further, to 36%. Those studying Europe's changing age pyramid say this will put countries under increasing economic pressure. 'The main consequences will be slower growth because the labour force will shrink, and higher tax burdens, because pension spending and the demand for health and elderly care will rise,' said Springford. Indeed, much of the EU is already seeing this, with tax burdens – as expressed through tax revenue as a percentage of GDP – climbing in counties such as France, Italy, Germany and Spain in recent decades. The health and social care industries will become increasingly important for managing an ageing Europe, and many health systems in the EU are already dependent on immigrant doctors or nurses. 'More people are going to require care, though that does depend on how healthy people are in old age, and how much care they need,' said Alan Manning, a professor of economics at the London School of Economics. 'You also have the other side of the equation that because of fewer children, because of low fertility rates, you need fewer people in education and childcare. So what we need to be doing, in some sense, is redistributing people who were caring for children to caring for old people.' At the same time, experts stress that immigration is not a silver bullet for Europe's demographic challenges, instead suggesting it is one of many solutions, or at least a way to ease the transition to an older society. 'Increasing immigration levels will not solve these demographic problems on their own – the levels required to do so would be very large, and there are only so many migrants who are willing to move,' said Springford. 'But they would help, as would raising employment rates of working-age people, pushing back the age of retirement, reforming pensions and shifting the burden of taxation from labour income to wealth, especially property.' Manning added: 'For immigration to help, it's got to be that immigrants are actually in work, and many European countries have quite low employment rates among a lot of immigrants. So you can't take that as a given. If you had an immigrant who came in and didn't work and then needed support, for welfare, that wouldn't make things better, that would make things worse. So it's really important that they're going to be in work, and that has been problematic in some cases.' Within national borders, rural areas will bear the brunt of the EU's coming population decline. Over the next 80 years, more villages could suffer the same fate as Camini in southern Italy. The village is one of many in the Calabria region where the population declined sharply later in the 20th century as younger residents moved elsewhere for opportunities. Camini has recently become the site of a project that is resettling refugees, in an attempt to bring the community back from extinction. It was cited in a recent Council of Europe report written by the Labour MP Kate Osamor that examined the potential of immigration to alleviate the challenges of an ageing population. 'I was watching the place slowly dying. The houses were just falling down because no one was living in them,' said Rosario Zurzolo, who was born in Camini and is now the president of the cooperative running the resettlement project, Eurocoop Servizi. So far, 50 refugees have settled permanently in Camini under the scheme, bringing the village population to 350, while a further 118 refugees are being temporarily hosted. A symbolic achievement for the scheme was the recent re-opening of the local school. Zurzolo says Camini can act as a model to help revitalise other European regions experiencing population decline. Serena Franco, who is also part of the Camini project and presented evidence to the Council of Europe for its report, added: 'They're bringing knowledge, and now we are starting to grow with them and to make new things, new processes, new jobs as well that would be impossible without them.'
