A house divided: the tension between the UK's new Immigration Rules, its climate and housing targets, and workers' rights

The UK Labour government has committed £39 billion to build 1.5 million homes in England and £13.2 billion to retrofit five million more across the UK. Together, these efforts aim to expand access to social and affordable housing and cut carbon emissions from buildings and the construction sector, which make up 25% of the UK’s total. However, these ambitions sit uncomfortably alongside upcoming changes to UK Immigration Rules, which come into force on 22 July 2025. The changes are intended to restore control over the immigration system and include restrictions on so-called ‘low-wage’ visa routes. As highlighted in a recent policy brief by the Centre for European Reform, this risks conflicts between the need for climate action, increasing access to affordable housing, and implementing effective immigration policy.

All of these issues raise difficult questions for the UK construction industry. One important challenge among them is that the sector currently faces a significant labour shortfall. Construction labour shortages are already acute, driven by Brexit, an ageing workforce, and poor retention rates. Cutting off legal migration pathways, as the new rules mandate, may worsen the issue and drive more exploitation in the shadows. What steps should companies take now to respond to these developments? 

Workers’ Rights Are Being Ignored

Sustainable housing isn’t just about insulation and solar panels. It depends on having enough skilled, available, and fairly paid and treated workers to get the job done. But the current migration policy is fast becoming a structural constraint on decarbonisation efforts across the UK.

Faced with labour shortages and limited legal pathways to recruit from abroad, some parts of the construction sector have been accused of exploitative practices such as:

• Misclassifying workers as self-employed to avoid protections
• Using informal labour that evades right-to-work checks
• Relying on opaque subcontracting and agency networks

This problem is particularly acute in retrofit-heavy trades like roofing, insulation, and joinery – exactly where demand is being driven up by public investment in retrofit via the UK Warm Homes Plan.

Labour Market Pressures Enable Abuse

Adding to the challenges facing the sector, the UK Skilled Worker visa programme is poorly suited to construction, requiring long-term contracts and a high salary threshold of £41,700 (well above the average £23–35,000 for construction workers) and imposing administrative burdens on smaller firms. 

Although some roles are included on the Immigration Salary List (ISL), the number of granted Skilled Worker visas is low due to factors including the reduced number of eligible occupations (from 53 to 23 in 2024) and the high pay thresholds. 

The July 2025 ISL, set to be replaced by the Temporary Shortage List in early 2026, omits key retrofit and housebuilding trades such as bricklayers, roofers, carpenters, scaffolders, and plasterers.

UK-based employment agencies, also known as labour agencies, which dominate construction site-based hiring in the country, generally cannot sponsor workers themselves as supplying a worker to a third party is ineligible according to Home Office sponsorship rules. In response, some agencies turn to:

• Workers with precarious or expired documentation, including EU nationals with no settled status
• The use of bogus self-employment to shift liability

Meanwhile, enforcement remains under-resourced. The UK has just 0.29 labour inspectors per 10,000 employees, one third of the ILO benchmark (1 per 10,000). While a new Fair Work Agency – consolidating the Gangmasters and Labour Abuse Authority, Employment Agency Standards (EAS) and HMRC’s National Minimum Wage enforcement team – is set to launch in April 2026, exploitation and abuse of workers’ rights continue in the gaps between policy intent and operational reality.

Introducing a Targeted Visa Pathway

In order to meet urgent labour needs while preventing exploitation and supporting net-zero climate goals, built environment sector bodies like the National Federation of Builders and Construction Industry Training Board, and civil society actors such as the Overseas Development Institute and Centre for European Reform, among others, advocate that the UK should establish a dedicated visa route for construction workers. This would entail:

• Occupation-specific eligibility for shortage trades essential to retrofit and housebuilding, such as bricklayers, roofers, carpenters, plasterers, scaffolders
• Project-based flexibility allowing movement between sites or employers within ethical, licensed labour chains
• Inclusion of vetted labour providers, including those with strong compliance on wages, housing, and direct employment
• Worker protections, including fair wage, whistleblower support, multilingual rights briefings, and the right to join a union and change employers in case of abuse
• Public procurement conditionality, requiring the use of this visa or other verified ethical labour models for government-funded construction, especially for Warm Homes: Local Authority Delivery and the Social Housing Decarbonisation Fund.

International examples show this can be done. Canada’s Temporary Foreign Worker Program, Germany’s Skilled Immigration Act, and New Zealand’s Accredited Employer Work Visa all combine sector-specific visas with stronger employer accountability. Businesses advocated for the change, including occupational flexibility, registration of shortages and worker protections. 

Build Fair, Live Fair

The UK cannot meet its housing and climate goals without workers, and it cannot meet labour needs without safe, legal migration routes and enforceable labour rights. The cost of ignoring these challenges isn’t just delays or budget overruns. It’s exploitation, injustice, and a housing system built on unstable foundations.

Businesses can help shape a visa system that meets labour needs while protecting workers and addressing housing requirements. By advocating for fair and flexible recruitment models, they can secure a more stable workforce and reduce risks linked to poor labour practices.

The Institute for Human Rights and Business encourages businesses to get involved through the Built Environment Just Transitions Accelerator (BEJTA) to help deliver a fair and sustainable transition.

Ultimately, a truly Just Transition means getting the people part right… from visa policy to worker protections on the ground, green skills retraining and engagement with communities… to ensure we leave no one behind.

More like this:

• Building for Today and the Future: Future Green Construction Jobs: skills and decent working conditions
• Employment & Recruitment Agencies Sector Guide on Implementing the UN Guiding Principles on Business and Human Rights