EE#20 Who'll take our jobs
Every aspect of the transition will have to grapple with where workers come from
I wrote recently about the green jobs challenge, politicians promising a boatload of new domestic ‘green jobs’ but without any view of either what those jobs are or who might do them. In an ever tighter labour market, we need to look not just at home but abroad to fill vacancies in offshore wind or home retrofit. So this week I want to unpack just how important immigration might be to UK energy security.
The problem with jobs and skills is we don’t get specific often, let's focus on the most pressing part of the transition - home retrofit.
Current government targets are to install 600,000 heat pumps a year by 2028, that’s almost ten times the current rate. Estimates are that there are 3000 trained heat pump engineers in the UK. The Green Jobs Taskforce suggest this will need to increase by at least 7500 a year initially, and then 15,000 a year from 2028 onwards. For context that means each engineer now needs to get five mates trained, qualified and hired - every year.
The first place to look to fill this hole is existing workers, particularly those whose employment is threatened by the transition. Gas boiler engineers have some of the skills required but still need some training to install heat pumps. Some organisations like Greenworkx are workxing (sorry) hard to better connect job seekers with employers and training providers. But for individuals training is expensive, and there’s a lack of confidence it will lead to work or better pay.
But existing workers won’t be enough. According to Nesta, six in ten construction workers are over 51, with fewer than one in ten workers under 35. Older workers are likely to either retire or be more resistant to retraining for only a few years benefit. This is where Sunak’s backwards steps on home heat are a problem, it makes it look like there’s still a viable career in boiler installation.
We need new workers in heating, but unemployment is around four per cent. Construction faces the second-highest percentage of businesses reporting worker shortages, after hospitality. Recruitment, largely due to perceptions of the industry has been a real challenge. This is compounded by Brexit, with construction relying on one in ten of its workforce from the EU 2018-2020.
Training is happening, but not at the pace required. Public efforts are piecemeal and small-scale, the Home Decarbonisation Skills fund has a few thousand places. Private efforts, notably Octopus and E.ON are growing, as are local authorities like Manchester’s retrofit skills hub, but these aren’t enough to meet demand.
There no discussion on whether migration might be necessary to bridge the gap between heating labour supply and demand. Construction is eligible for skilled visas. Yet of 2300 issued for construction in 2022/23 only 13 went to plumbing and heating engineers.
Heat pumps are mostly a European technology. That’s where the vast majority of installations and workers are. Theoretically, there should be a pool of labour available from countries, like Norway or Sweden, close to heat pump saturation. But they just don’t really, want to come to the UK. Yes, it’s easier to move in the EEA, but recent changes in government policy also make moving to the UK seem like a riskier bet. Heating and plumbing are also dominated by micro-businesses, and sole traders struggle with visa sponsorship.
There is hope, heat pumps are basically air con units and loads of people install those beyond Europe. But global cooling installation is growing faster than UK heat pump installation, and workers are unlikely to have to move far to do it. There is also still some training required to shift, for example in conducting a home energy assessment to make sure you get the right kit. UK homes are in a much worse state, and often much older than lots of buildings in comparable climates.
To fix this problem, other countries are setting up skills partnerships to address shortfalls in the transition workforce. Germany’s solar industry recently signed a deal with India, always keen to export its vast labour supply, to install solar. The German Public Employment Service has also set up a partnership with Colombia, training those in-country to become electrical engineers whilst also offering a temporary worker programme to apply them in the Fatherland. The UK has done similar on health and social care with countries like the Philippines.
What we don’t want is to be taking labour from abroad which holds back other countries' transition, but there is an opportunity given Europe’s transition is more advanced, to support skills and employ people for a short time before they return and can apply those skills at home.
In the paper we wrote for ODI, there were several other things we recommended. The first is that government needs a more granular view of the skills it needs and therefore what it will need to import. Labour market intelligence is a vital tool in industrial policy. Net zero should be informing the shortage occupation list. This might need to lead to a net zero workforce visa (though again the definition problem strikes), or the ability of say a trade body (construction!!) to sponsor visas rather than individuals.
The most urgent challenge for me is that politically we are flying blind. We have no idea what the public thinks about migration to help reach net zero. We know they aren’t enthused by green jobs themselves but recognise that net zero is vital and needs to be done. There’s always a well of support for ‘someone else should do it though’. Championing British green jobs, even if voters are sceptical they’ll appear makes a conversation about immigration harder to have. You can see the Daily Mail rubbing its hands with glee at the thought of a net zero means immigrants campaign. We need a boatload of people, and notoriously they are not a fan of boats.
We need everything to fill the skills gap. Domestic workers, automation, retraining, new entrants and ultimately immigration. But we need to start testing that conversation ASAP.