The UK government’s move to a points-based system in 10 months’ time has been described as “disastrous for the hospitality sector”.
Industry leaders have come together to oppose the move, which, it is feared, will lead to significant labour shortages.
Plans unveiled last week will see a new points-based system brought in from January 2021. The proposals reduce the salary threshold for employing skilled workers from overseas, but so far indicate no route into the UK for general low-skilled or temporary workers.
The minimum general salary threshold will be reduced to £25,600, down from the previously proposed £30,000.
Jane Pendlebury, CEO, HOSPA, the Hospitality Professionals’ Association, said: “It was with a groan that I read the official government announcement about the plans for a new points-based immigration system.
“The hospitality industry is the third-largest employer in the UK, but many of the jobs within it aren’t deemed ‘skilled’ – they mainly require hard work, determination and a willingness to go above and beyond.
“Sadly, a career in hospitality in the UK is often regarded merely as a stepping stone – particularly for university students looking for part time or seasonal work. By contrast, attitudes on continental Europe are very different, with hospitality seen as a well-respected career path thanks to its wealth of opportunity.
“Post-Brexit, HOSPA and other industry organisations need to work hard to try and change perceptions of our sector. It’s a career where you can start at the very bottom rung of the ladder and progress to the very top. This isn’t hyperbole. There are countless examples throughout the industry, where pot washers or part time waiting staff have gone on to become General Managers or to head up leading hotel groups. There’s no ceiling to success.
“The hospitality industry has already been heavily affected by the initial Brexit vote, with many EU workers feeling alienated and unwelcome. This latest move now goes beyond that. A vast pool of willing talent is set to be cut off from an industry already struggling with staffing. Consequently, we’re extremely concerned about the long-term implications on what should be a thriving trade.”
CGA’s Business Leaders Survey, run in partnership with Fourth and conducted before the plans were announced, found that 41% of leaders thought a points-based system for immigration would have a negative impact on hospitality - twice as many as thought it would have a positive impact.
The poll confirmed fears that the plans would make it harder to fill roles in an industry that heavily depends on overseas labour. Seventy-seven per cent of business leaders thought labour shortage areas should be taken into consideration when setting criteria for potential workers - significantly higher than any other factor, like language skills (56%), skilled work experience overseas (40%) or offers of employment (38%).
The Business Leaders’ Survey also revealed support for a system of temporary visas to ease pressure on labour shortages. Two thirds (66%) of leaders thought a temporary visa should last for either 24 or 36 months.
UKHospitality CEO Kate Nicholls added: “Ruling out a temporary, low-skilled route for migration in just 10 months’ time will be disastrous for the hospitality sector and the British people. Business must be given time to adapt.
“These proposals will cut off future growth and expansion and deter investment in Britain’s high streets. It will lead to reduced levels of service for customers and business closures. Hospitality is already facing an acute labour shortage, despite investing significantly in skills, training and increasing apprenticeships for the domestic workforce. We are facing record low levels of unemployment, a dip in young people entering the labour market and have the highest vacancy levels of any sector.
“This announcement fails to recognise that hospitality is at the heart of every community in the UK. Damaging the hospitality sector will have a knock-on effect for schoolchildren and the elderly who rely on the sector for their meals. The government says it is making allowances for staff in the NHS, but it has totally ignored the catering companies who supply the meals to patients and staff.
“We understand the government’s desire to deliver on the referendum result and its aim of moving to a skills-based immigration system. We fully support the ambition to upskill the domestic population and provide opportunities for people in every part of the UK. These proposals fail to deliver on the government’s own objective of providing an immigration system which works for the UK’s economy and its people.”
Home secretary Priti Patel defended the plans, telling a number of media outlets that there were over eight million economically inactive Brits who could be trained to fill the vacancies. Nicholls responded: “There are not eight million Brits who are unemployed and looking or available for work. There are eight million economically inactive 16 to 64 year olds, 27% of these are in full time education, 26% are long term sick, 22% caring for family, 13% retired. Less than half a percent are discouraged workers.”
Robin Hutson, co-founder of Hotel du Vin and chairman, Lime Wood Group, tweeted: “Honestly Boris Johnson, don’t you understand the importance of the hospitality industry to rural Britain? We pay well, we train well, we look after people and we still have jobs to fill. The economic ripple huge, I have created 900 sustainable jobs in 10 years, why not encourage us?”
Insight: The cabinet reshuffle saw Nigel Huddleston MP named as tourism minister. Prior to becoming an MP, he worked for Google as the industry head for travel and before that as a consultant at Deloitte in the UK and the US covering the travel and tourism, tech, media and telecommunications sectors. So there are high hopes that he will push the sector’s case (depending on your views on Google’s impact on the sector).
High, but not, we fear, likely to be met. Huddleston has been a vocal supporter of Johnson and there is a growing concern that the hospitality sector will be thrown under the bus in the name of the government’s migration policy.
Patel was eager for business to pay to train those who, at the moment, are largely unable to work, at a time when costs are rising and new minimum wage levels must also be met. Robots cannot deliver meals to tables or, as they found in Japan, carry bags over uneven surfaces.
Unlike other industries affected by Brexit, such as banking, hospitality cannot shove off to more welcoming climes, it must stay and fight. So far government has ignored its voice quite comprehensively. Only when it starts to notice the drop in income for its coffers is it likely to notice that something is up and may act. By that point it will be good news for those investors looking for distress, but few else.