Pubs struggle to retain staff after Brexit and
Covid ‘double whammy’
Brexit brought the biggest shift in UK’s immigration
regime in a generation, as free movement of people from the EU ended
Heather
Stewart
Wed 28 Dec
2022 13.00 GMT
In the
second of our Brexit Undone? series, Heather Stewart reports on why so many
businesses are still struggling to adjust to the new reality.
At the
Rowan Tree hotel, just outside Aviemore, amid the spectacular snow-clad scenery
of the Cairngorms, co-owner Tamasina Cassidy is blunt about what she and her
husband, Jonny, have had to do to cope with post-Brexit staff shortages: “Work
harder.”
She says
the hotel previously had “a contingent of Czech people, who had friends in the
Czech Republic and they would bring people over”.
“They were
just great, a really great team: really hard grafters,” agrees Jonny. Some
returned home during the pandemic, while three who remained have since been
forced to move away, because of a severe lack of affordable housing.
This is
such a challenge that two of the Rowan Tree hotel’s rooms have been given over
to accommodating staff, while an adjacent cottage houses the chef.
The couple
are having to run the hotel and its well-regarded restaurant with fewer staff
than a year ago: Tamasina has just been practising making barista-style
coffees. “We’ve definitely had to adapt how we’ve been working, to manage it,”
says Jonny.
Business-owners
in this year-round resort, who were revelling in unusually early snowfall when
the Guardian visited, don’t blame Brexit alone for the staff shortages plaguing
hospitality – but they certainly don’t think it has helped.
Samantha
Faircliff, the managing director of the Cairngorm Brewery, sitting by a
crackling woodburner in the brewery’s Winking Owl pub, says: “Prior to Brexit,
we probably had six members of staff, who were really good; really good
workers.”
She says
they returned home to their families during the Covid pandemic, instead of
staying to claim settled status. “The double whammy I feel was Brexit and then
Covid,” she says. “It’s the opportunity for others to come, that’s gone”.
UKHospitality
(UKH) estimates as many as half a million EU workers who may have been entitled
to remain permanently went home during the pandemic and never completed their
applications.
At the
Winking Owl, a lack of front-of-house staff has meant closing for part of the
week, increasing the number of part-time staff and relying on students during
peak seasons.
“We close
on a Monday, Tuesday for two reasons. One is it makes sure that our staff then
get time out; and they have days off; and it then means we’ve got enough staff
to do the job well, Wednesday through to Sunday,” Faircliff says. Half of UKH’s
members are making adjustments such as these – to opening hours or capacity –
as a result of labour shortages.
Faircliff
says there has also been “a bit of a wage war” locally, as businesses struggle
to recruit and retain staff.
Mark Tate,
the chief executive of the Cairngorms Business Partnership, says: “The
challenges of something like Brexit, in a rural economy like this, just become
exacerbated because of the additional challenges of housing and transport.”
Curbing
unchecked migration from continental Europe was one of the arguments for Brexit
made by Vote Leave during the bitter referendum campaign of 2016. Six years on,
businesses are still wrestling with the consequences.
Despite the
government’s often harsh rhetoric, the system has arguably become more liberal
for higher-paid roles – at least for those employers willing to navigate the
Home Office’s skilled worker visa scheme.
But it is
now all but impossible for low-paid workers to come, aside from a few specific
exceptions, such as short-term schemes for agriculture.
Jonathan
Portes, a professor of economics and public policy at King’s College London,
says the rules in place since January 2021 are more open than he and many other
experts expected.
“The simple
way of describing this new system is: if you’re doing a job that requires
A-levels or above, and you’re paid more than £25,000 – lower in some jobs,
higher in others – then your employer can get you a visa,” he says.
Portes
estimates that at least half the jobs in the economy, perhaps up to 60%, could
in principle be opened up to overseas workers in this way: though employers
complain that the application process is far from user-friendly.
“I think it
is an arduous process and it’s an expensive process,” says Jonny Cassidy, of
the Rowan Tree. “It is a little bit frustrating when we have a shortage of
certain skills.”
Net
migration in the year to June hit a record high of 504,000 – hardly a sign of
pulling up the drawbridge. It was significantly boosted by one-off factors,
including the conflict in Ukraine and the special visa scheme for Hong Kong;
but the independent Office for Budget Responsibility (OBR) recently updated its
forecasts for future net migration, having seen how the new rules are
operating.
The
chancellor, Jeremy Hunt, said recently that migration was “very important” for
the economy – though he stressed that he still wanted to bring it down.
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The Home
Office issued “worker visas” for 145,258 people to come to the UK in the year
to September: a 128% increase on 2019, before the pandemic. More than 40% of
these were “skilled worker, health and care” visas, as the government looked
overseas to fill spiralling vacancies in the NHS.
The spread
of countries involved underlines the profound shift under way in the mix of
nationalities coming to the UK to work. India is at the top of the list, with
more than 56,000 worker visas granted, followed by the Philippines with 9,974
and Nigeria, with 9,944.
Nick Allen,
the chief executive of the Meat Processors Association, offers one explanation
for the rapid increase in Filipinos coming to the UK to work (up 93% on the
year).
“The
Philippines recently has been quite a good source of butchers for us,” he says.
“They do seem to have got quite a few butchers there, and they don’t seem to
have too much trouble passing the English test to get here.”
It’s not
cheap, however – for a butcher earning typically £35,000 to £45,000, Allen
explains, once search costs, visa fees, flights, and finding suitable
accommodation are included, “the ballpark figure is it costs you about £12,000
to bring every individual worker in”.
At the CBI
conference last month, where the director general, Tony Danker, calls for more
visas to be issued to tackle shortages. The immigration minister, Robert
Jenrick, says: “If I was a business manager, I would be looking to the British
workforce in the first instance, seeing how I could get local people into my
business.”
Allen, who
says 65% of staff in meat processing pre-Brexit were from outside the UK,
insists his members have been trying to do that – but with limited success.
“We’ve struggled to recruit on the home market. We’ve now got a situation where
probably most of our big plants are running about 10% to 15% short on staff,”
he says.
Similarly,
Kate Nicholls, the chief executive of the UKH, says the experiences of
Faircliff and the Cassidys in Aviemore are echoed widely among her members. “We
have vacancy rates running at about 9% in the sector,” she says.
She
acknowledges the new visa regime means recruiting overseas is now a possibility
for a wider range of jobs – but like other business groups, the UKH argues that
it is not an option for many firms. “It’s very costly, it’s very bureaucratic,
it takes a long time.”
Neil
Carberry, the chief executive of the Recruitment and Employment Confederation
(REC), says: “While the system itself is more permissive than the old non-EU
system, most firms experience it as more complex and more costly because they
weren’t used to the old system, and it is not particularly user-friendly.”
But he says
it’s important to acknowledge there are labour shortages in many major
economies. “When I talk to my colleagues from around the world, everyone is
experiencing a candidate shortage right now,” he says.
Madeleine
Sumption, of the Migration Observatory at Oxford University, agrees. “The end
of free movement is one of the factors but it’s probably not the most important
one exacerbating labour shortages,” she says. “We’ve seen labour shortages in
other countries that haven’t had a big change in immigration policy. So this is
not just about Brexit.”
And she
says it may take firms some years to adapt their business models to cope
without a pool of cheap labour – perhaps by upgrading technology. “Automation
can be quite a long-term project. This is quite a long-term thing, but in the
short run they’re still running the old business model that relied on EU
workers.”
Low rates
of business investment have been a long-term bugbear for the UK, which some
proponents of Brexit blame partly on the free and easy availability of low-cost
workers.
The Labour
party is clear it will not be arguing to reverse free movement, and instead
will upgrade skills and training, to try to ensure the right workers are
available for the needs of businesses.
The shadow
immigration minister, Stephen Kinnock, says: “Labour supports points-based
immigration, and we are clear that there will be no return to free movement
when we are in government. However, we are equally clear that the system as it
stands is not fit for purpose because the Conservatives have failed to link it
up with strategic workforce planning.”
Portes –
not by any means an optimist about Brexit – says now the details of the
post-Brexit immigration regime are clear, he has changed his mind about its
likely effects on the economy.
“Five years
ago, I would have said the macro impact of the post-Brexit migration regime
would be significantly negative. If you were to ask me today, I would say
positive, because I think over the medium- to long-term, the gains from a
significant expansion in medium and high-skills migration outweigh the losses
to visible but relatively low productivity sectors that are suffering at the
moment,” he says.
But that is
cold comfort for the firms at the front line of this historic shift in the UK’s
labour market, who are also having to contend with the long shadow cast by
covid.
Back at the
Rowan Tree, Jonny Cassidy sighs. “An immigration policy that was perhaps a bit
more progressive so we could bring people in, that might help – but we are
where we are.”
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