Changes to immigration rules that will make it harder for businesses to hire skilled workers “disproportionately” impact food businesses that rely on overseas labourers, the Association of Labour Providers told the Home Office in an open letter on Monday.
The new measures, designed to reduce net migration, were particularly damaging for businesses who use workers in skilled occupations with a lower salary such as butchers, poultry and fish processors and farmers, the ALP said. Their work was “absolutely essential to food production and security” in the UK, it added.
“Moreover, the timing of such significant changes does not allow businesses to effectively plan and budget their activity,” the group’s CEO Joanne Young told home secretary James Cleverly. “Businesses have already committed to production volumes and pricing for 2024, and recruitment processes are underway to achieve them.”
The Home Office’s changes to immigration rules include upping the minimum wage of overseas workers to £38,700 in a bid to encourage recruitment of domestic workers and less reliance on migrants.
But Young argued that “recruiting workers from overseas is far more costly and time-consuming than recruiting domestic workers” and “no responsible business would choose to use these visa routes if it had access to the right number of people with the right skills in the domestic workforce”, which was “not the case”.
Two of the UK’s biggest food manufacturers, ABP UK and Cranswick – which have heavily relied on overseas workers such as Filipino butchers since Brexit – have backed the ALP’s warnings, and also alerted to the effects the new measures will have on their business.
Read more: Skilled Worker visa salary increase to shut out ‘vital’ staff
ABP said the changes would have “a catastrophic effect on our ability to source labour and ultimately the viability of our business”.
“An increase of 49% to the minimum salary threshold will curtail our ability to utilise the Skilled Worker visa route for butchers. We have budgeted for the new national minimum wage increase and plan for ongoing inflationary rises, but this unprecedented upsurge will not support the challenges we face within the food production industry.
“Unfortunately there is a perception that UK businesses utilise migrant labour as a cheaper option to UK based labour – this is not the case, the Skilled Worker route officers us access to labour that we are unable to source within the UK, at a significantly higher cost.”
Meanwhile, Cranswick said there was a “real risk” that the labour shortages seen in 2020 – which resulted in the culling of thousands of animals and contributed to shelf availability issues – would “be repeated if this policy change is not more significantly amended”.
Cranswick employs 14,000 people across the production of pork, poultry and charcuterie-style products, with non-UK nationals accounting for over 65% of its workforce.
“Our international workforce, including skilled individuals from the Philippines, plays a vital role in adding value and positively impacting the UK economy,” the company argued.
The ALP’s letter to Cleverly also noted that a salary increase for those coming through the Skilled Worker visa would result in significant pay inflation at home because “domestic workers will need to receive the same pay increase to avoid discrimination claims and consequent pay increases will be seen amongst other types of workers either seeking to maintain differentials, or as part of discrimination pay claims”.
The resulting cost increases would subsequently have a “massive impact” on the cost of food throughout the supply chain, which would ultimately be borne by consumers, it warned.
Additionally, UK businesses struggling to fill the labour gaps could become less competitive and have to rationalise or reduce output, or in some cases close completely with a consequent reduction in employment – often in remote and rural locations where work is often harder to come by, Young pointed out.
Read more: New immigration rules could herald fresh labour crisis, warn meat producers
Other effects could include an increase in food imports either as a result of increased prices or the inability to source locally, increased risk of worker exploitation, and businesses seeking to recover the increased costs of hiring migrant workers via wage deductions or unpaid overtime.
The ALP has urged the government to include crucial occupation codes such as butchers and farmers to the immigration salary list (ISL) – which replaces the now-abolished Shortage Occupation roles list – meaning they can be eligible for a reduction to the salary thresholds, and to make the ISL discount for those workers “commensurate with actual rates of pay in the sector”.
It also proposed the increased salary should be pro-rated down from 48 hours at the full rate so that workers on shorter weeks can be paid a lower salary in accordance with their hours.
“Should these proposals not be accepted, then we request that the implementation of the salary increase to the Skilled Worker route is phased over a period of time, as it has been for the minimum income requirement for family visas,” Young wrote. “This will give business the opportunity to effectively plan for change, and to attempt to train replacement workers locally.”
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