Brexit worker cutbacks will damage foodservice

Bob Cotton and Miles Quest look ahead to the implications of Brexit on hospitality

Brexit means Brexit – but what does it mean for the foodservice industry?
A system of work permits will be essential once Britain leaves the EU, argues Bob Cotton and Miles Quest. And the industry must set out its case now…

 

Britain’s hospitality and foodservice industry is hungry for labour. It employs nearly three million people and, according to leading skills and workforce development experts, People 1st, needs to recruit 524,000 people by 2020 in order to cover retirement, leavers and industry growth. This is a massive number. Currently, 26% of these jobs will be taken by migrant workers; in London that figure rises to 69%. Clearly, hospitality is as dependent on migrant workers as the NHS and care home sector and the agri-food industry.

If legislation is introduced that stops this supply, what will be the consequences? As People 1st points out, without migrant workers, employers will be faced with significantly higher numbers of hard-to-fill vacancies. That’s putting it mildly.

Britain is almost at a level of full employment at a time when hospitality’s career profile, though improving, is attracting wildly insufficient numbers of British-born youngsters. Yet the industry is in expansionist mood. Even by 2014, it was reported to have created 330,000 new jobs since 2010 – of which 90,000 (but probably more) will have been filled by migrants. If migrant workers are not allowed into the UK, payroll costs will rocket and businesses will close, either due to a lack of labour or its sky-high cost. Of course, it 

could be argued that the industry should improve its employment image by offering higher wages and better work and living conditions. Certainly, the ready availability of migrant workers, eager to work probably at lower rates of pay, has kept labour costs down; this, in turn, has been a disincentive to employers to improve hospitality wage levels and working conditions. If workers are willing to work for less, only the most enlightened employers will see the need to improve working conditions. One side benefit of fewer migrant workers employed might be that higher wages attract more British-born talent.

 

“Of all the dangers that Brexit poses to hospitality, the potentially vast reduction in the number of migrant workers will inflict by far the greatest damage”

But, as hospitality is so dependent on migrant workers (with at least 500,000 already employed, and not just in lower skilled jobs) a reduction to the ‘tens of thousands’ envisaged by Brexiteers will have devastating consequences because the industry is on such a roll. If it is to maintain this growth, it needs a regular supply of workers. If Brexit brings the total number of migrants down to minimal levels, hospitality will be unable to survive in its present state. Even though some effort can be made to improve productivity, and thus reduce the need for staff, there is no doubt that the size of the reduction in migrant numbers envisaged by Brexiteers would not only force hospitality businesses to close because of a lack of manpower, particularly outside London, but would push up wage costs for the remaining businesses so much that they would become unprofitable.

Clearly, of all the dangers that Brexit poses to hospitality, the potentially vast reduction in the number of migrant workers will inflict by far the greatest damage.

As a points-based system has been ruled out after preliminary discussions, a system of work permits will be essential if the hospitality industry is not to be severely damaged. It is true that work permits for skilled workers (for example, chefs) outside the EU already exist but the minimum salary level is too high. One practical alternative would be a much broader-based scheme that could be introduced on an industry or sector-wide basis that accepts all workers at whatever level, but to a pre-determined upper annual industry limit. All workers would be recruited by employers for a specific job but only for a maximum period of, say, two years; and employers would also need to accept responsibility for the worker in the UK and for his or her return when the visa expires. Such a scheme could be applied to hospitality, the NHS, agriculture or any other needy sector and would help in order to provide a guaranteed base load of workers for expanding key sectors of the economy.

Undoubtedly, the employment of migrant workers has enabled the hospitality and foodservice sector to become one of the UK’s largest industries. If quitting the EU poses such a danger to this success, we need to set out our case before the terms of Brexit are negotiated.