Labour immigration reforms will pose ‘significant challenges’ to food industry

The government’s plans to tighten immigration laws could deepen the food and drink industry’s labour issues, experts have warned.

Prime minister Keir Starmer unveiled his plans to slash immigration levels in the UK earlier this week, but experts claim the changes will bring new challenges to the food industry – which is already heavily reliant on overseas workers.

Foreign labourers will now generally need a degree-level qualification to apply for the main skilled worker visa, rather than just the equivalent of an A-level.

Meanwhile, lower qualification requirements will stay on a “time-limited basis”, the PM said, for sectors experiencing chronic recruitment and skills shortages.

But the government’s decision to increase the skill level and implement stricter English language requirements would “present significant recruitment challenges for the food and beverage sector”, said Corrine Bentham, principal associate at law firm Eversheds Sutherland.

“A large number of job roles in the sector, whilst fundamental and essential to operations, do not require a degree-level qualification and focus more on experience and practical skills.

“If the changes go through as outlined in the white paper, this is likely to expose the sector to talent shortages, with the potential for an unintended consequence of increased costs to the end consumer”, she warned.

Additionally, the Immigration Skills Charge is set to raise by 32% alongside increased salary thresholds for degree level roles, which was “likely to squeeze any existing budgets with already tight margins”, Bentham said, advising employers in the industry to “start budgeting for increased costs when sponsoring skilled workers”.

Extending the qualifying period for settlement to 10 years is also likely to cause further labour shortages by increasing the time someone needs to spend on a time-limited visa with working restrictions, potentially making the UK a less attractive option for long-term talent migration, the lawyer warned.

The government is also looking to make changes to both the student visa and graduate visa routes, which also “would have the potential to impact temporary labour relied on by the sector, particularly during peak periods in the agricultural sector”.

Some in the industry believe the seasonal worker visa scheme – which allows individuals to temporarily come to the UK for seasonal work in the horticulture or poultry production sectors to address short-term shortages – will be copied and pasted elsewhere as the government largely thinks the model works.

The scheme is managed by approved scheme operators who act as licensed sponsors, and the numbers do not count towards net immigration figures.

Read more: Why the UK seasonal labour worker scheme still isn’t working

For now, Labour’s proposed Temporary Shortage List (TSL) for roles that are below degree-level and require sponsorship could “offer a way forward for employers in the food and beverage sector”, Bentham noted. However, the government has been clear that this would be a temporary and conditional option, with employers opting for the TSL being expected to comply with sector-wide workforce plans.

“Inclusion of roles on the TSL will be challenging and it is imperative that employers work with sector-specific groups to ensure that their labour shortage needs are expressed and met.

“Proposed restrictions on accompanying dependants for those sponsored in TSL roles may also make this route less attractive to prospective candidates further exacerbating labour shortages.”

Labour’s immigration reforms come at a time when the food and agriculture industry is already facing long-term recruitment and talent challenges, including across vital areas like hospitality, fruit & veg picking and logistics.

Rising employment costs driven by the Chancellor’s National Insurance and minimum wage changes from this April are also adding further strain to businesses.

UKHospitality chief Kate Nicholls said the group “understands the government’s intention to reduce migration, which comes on the back of additional restraints on hospitality last year”, but that any restrictions need to come hand-in-hand with “an employment and skills strategy to further drive domestic recruitment”.

“Hospitality recruits more than three-quarters of its workforce from within the UK and measures like apprenticeship levy reform, the introduction of foundational apprenticeships and investment in pre-employment training can allow us to go even further.

“Against a backdrop of £3bn in additional employment costs hitting hospitality businesses, such a strategy is critical if the government is to achieve its goal of getting more people out of welfare and into work”, Nicholls said.

The Chartered Institute of Personnel & Development, the professional body for HR and people development, also urged government to overhaul apprenticeships and training schemes to boost domestic recruitment.

Read more: Campaign launched to tackle food & drink recruitment crisis

“The idea that employers mainly recruit migrant workers because they don’t want to spend money training UK workers is just wrong”, said Ben Willmott, head of public policy at the CIPD.

“Our research has consistently shown that it’s employers recruiting from overseas that are most likely to be investing in the UK-born workforce, for example through apprenticeships and hiring from disadvantaged groups.

“We must also address the collapse in apprenticeships which lies at the heart of many of the skills shortages employers are facing.

“Plans to reform the immigration system need to go hand-in-hand with a long-term workforce strategy to ensure employers can find workers with the skills they need to drive productivity and economic growth.”

The Road Haulage Association echoed the need to boost investment in training to meet the demand for “40,000 new lorry drivers each year over the next five years, alongside a substantial and urgent increase in qualified technicians”, both of whom “keep vehicles moving” and are “essential to supply chains and industries locally, regionally and nationally”.