New immigration policy: a bitter pill to swallow for those who give us our daily bread
Australia's points based-immigration system has become very fashionable among our country’s leaders, a veritable political mantra, repeated alongside ‘brightest and best’, which was mentioned no less than five times in the immigration White Paper. Prime Minister Boris Johnson and Home Secretary Priti Patel have stated their strong support for both to replace free movement. And they seem to want that to happen very soon.
But how would key industries who employ migrants who can’t be described as ‘the brightest and best’, but are nonetheless essential, manage recruitment under such a system? Recent participants at a roundtable event hosted by NIESR and the Food and Drink Federation (FDF) were not optimistic for their sector should the current proposals be passed. With EU migrants a third of its workforce, and much higher in parts, it relies on migrants to meet low to medium skills shortages. And the public relies on the sector for more than just its daily bread.
The White Paper includes some unpalatable proposals
The immigration White Paper has proposed a single, skills based, system with no priority to EU workers but involving less of the red-tape which tied up employers using the existing Tier 2 visa route. On taking office, the Home Secretary endorsed this approach, pledging support for a system which allows for quick recruitment when employers experience shortages. So far so good for recruiting highly skilled workers, but the food and drink manufacturing workforce is roughly evenly split three ways between low, mid, and highly skilled workers, all of whom play a vital role.
The concerns of the sector’s employers centre on the lack of any real provision for low to medium skilled labour in the Immigration White Paper. The proposed salary threshold of £30,000 for skilled visas is a particular worry. The recent commission for the Migration Advisory Committee to review how Salary Thresholds could work under the new system suggested a system where skilled workers are paid the ‘going rate’ (i.e. 25th percentile salary) for their role. The FDF and other roundtable participants viewed this as an improvement on the current £30,000 threshold.
The only real provision for low to medium skilled workers in the sector, whose salaries tend to cluster in the £20,000 - £30,000 range, is the proposal for ‘transitional’ visas allowing for temporary stays of up to 12 months, followed by a 12 month ‘cooling off’ (non-renewal) period, with no access to public funds or to bring dependents. One employer described these as ‘sod-off visas’, which were unlikely to appeal to all but quite desperate migrants. Employers also said they want a stable workforce and look to migrants for potential managers. They were opposed to what one described as ‘guest-worker’ policies where migrants come and go.
The industry’s only other option for lower skilled labour is though the youth mobility scheme. But employers at our round table were doubtful that gap year students would opt to work in fish factories and abattoirs.
More generally, employers voiced concern about the message conveyed by the White Paper proposals and subsequent homage paid to Australia’s points based system. They reported that uncertainty, as well as the fall in the value of sterling and therefore remittances, had already led to loss of EU workers and difficulty recruiting replacements. Employers feared that further talk of restrictive policies, relayed by the world’s media and the migrant grapevine, would deter potential in-comers.
Why can’t the sector invest and replace migrants with skilled Brits?
Asked why they couldn’t replace the loss of EU workers with British people, employers at the event talked of record low unemployment levels (currently 3.9%) and, in some cases, their isolated location. Nor do they see automation as the answer. The Immigration White Paper states that as a result of restrictions on lower-skilled migration:
‘Over time, we would expect the labour market to adjust to the change in labour supply (e.g. through automation, digitisation, increasing wages’.
But this doesn’t reflect reality for employers in food and drink processing, as well as in others such as hospitality, social care and construction. Parts of the sector are highly mechanised, but the demand for lower skilled labour remains. To give just two examples, machines currently lack the provision to pack bay leaves in jars, or position the cherry on Mr Kipling’s Bakewell Tarts. Employers rely on migrant labour, not because they don’t train, invest in technology or pay low wages but because of shortages of British workers. This is especially true in low wage industries, where 35% of employers cite shortages as the principal reason for recruiting migrants.
Employers recognise that pay is a factor deterring British applicants for food and drink processing work. However, they face constraints: profit margins are tight and have become more so with Brexit which has increased the price of imported ingredients. One employer at our event had closed down a factory. The only upside was that it was inundated with job offers for its redundant workers by employers who were finding it hard to recruit.
There’s nothing new about migrant labour in the food sector
Migrants are not recent arrivals to the food industry and this should make policy makers take note. The Seasonal Agricultural Workers (SAWS) scheme was introduced immediately after the Second World War to meet labour shortages, while the food processing and hospitality schemes dated from 2003. All three schemes were targeted at young people from Europe and outside, granting a stay of up to 12 months and with no right to permanent settlement.
Of the UK’s short-term visa schemes, only SAWS has been successful because agriculture is genuinely seasonal in a way that hospitality and the food sector are not. The hospitality scheme was phased out in 2005 in view of prospective migration from Eastern Europe but also accusations of abuse of its terms. The food-processing scheme was also discontinued when it became under-used due to the availability of EU migrants. It’s clear that the 12-month stay just wasn’t the ticket.
Access to migrant labour has been assured for the sector in the past because it’s been found to be essential: and this has both fuelled its growth and the supply of cheap food. While the food industry is, as always, looking to attract more British labour, this won’t happen overnight. It might happen in time if the industry develops more high tech solutions and high skilled jobs to replace the need for low skilled workers. But if, in the meantime, we cut off the supply to migrants, the sector’s production lines will grind to a halt and we’ll all be worse off.