Decision to deny visas for low skilled workers creates ‘huge challenge’ for UK on-trade

The UK government’s decision to deny visas to low-skilled workers is set to create a “huge challenge” to the UK’s pub, bar and restaurant sector, the drinks trade has warned.

A view from behind an typical English pub bar

The government this morning unveiled its new points-based immigration system which it says will attract “the brightest and the best” talent to the UK following the end of the temporary Brexit measures at the end of the year. The new measures will require overseas workers who wanted to come to the UK to reach a minimum of 70 points, including speaking English and having the offer of a skilled job with an “approved sponsor” already lined up (which combined equals 50 point). Additional points can be gained via having a salary over £23,040 or £25,600 bracket, qualifications at working in a sector with skills shortages.

It ruled out a route for allowing lower-skilled workers to come to the UK, saying businesses had to “adapt and adjust” to the end of free movement between the UK and EU by reducing their reliance on cheap EU labour and embracing better staff retention, productivity and wider investment in technology and automation.

The news was greeted by dismay by the UK’s trade organisations.

UK Hospitality chief executive Kate Nicholls called it “disastrous” for the hospitality sector, pointing out this was due to go ahead in ten months and saying business must be given time to adapt.

She said it failed to recognise that the hospitality sector was at the heart of communities across the UK, and was already facing an acute labour shortage, despite significant investment in skills, training and 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,” she said. “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.”

“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.”

Huge challenge

Emma McClarkin, chief executive of the British Beer & Pub Association, said the points-based immigration system would present significant challenges for the pub sector and the government needed to recognise staff shortages across the sector and expand the Youth Mobility Scheme.

“Many pubs rely on workers from overseas, so it is hard to see how they will cope with such fundamental changes coming into effect in just ten months. Pubs will especially struggle with the costs and complexities of becoming a sponsoring employer in order to take on staff from outside the UK.”

British restaurant Hawksmoor, which operates 9 restaurants across the UK, tweeted that the decision showed how little the government was interested in the hospitality industry.

“There’s no doubt in my mind – as a direct result of this proposal not only will restaurants close, employment go down and tax receipts fall, but it will put British people out of work, up and down the supply chain,” @HawksmoorLondon tweeted. “People have painted the issue as ‘cheap labour’. It isn’t, certainly not amongst quality restaurants, it’s about access to *enough * labour. As an industry we could employ more and we’re effectively being asked to employ less [sic].”

It said it spelled out the challenge to the sector – to make it more attractive to UK workers.

“Have we succeeded in making Hospitality attractive enough to British people as a viable career? Depressingly the answer is no. We obviously need to try harder somehow, and admittedly it’s easier sometimes to just employ people who are ‘ready to go’ from the EU.”

Dave Gosling, a partner at hospitality and leisure sector specialist accountancy firm, Menzies LLP, called it a “major blow” to employers in the hospitality and leisure sector, many of whom had come to rely on a steady stream of migrant workers from the EU.

“Reassuring noises from government had led to some expectation that low-paid, skilled workers would continue to find it relatively easy to enter the UK under the new points-based system. However, this is not the case and employers will be deeply concerned that they will not be able to fill jobs and wages could start to rise, due to the shortage of supply,” he said. “At a time, when many pubs and restaurants are already struggling to manage rising costs in an intensely competitive market, this immigration plan will force costs to increase further and add to cashflow pressures. To mitigate the impact of this immigration plan, which will take effect from the end of 2020, businesses in the sector will need to review their employment strategies and ring-fence skilled staff.”

He added that the youth mobility scheme could help “to some extent” but would not be enough to balance out the negative effect of reducing the number of low-skilled workers that would follow the introduction of the new system.

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