61.Access to EU nationals is crucial to the processed food and drink sector on four grounds: hospitality (which is the second largest employer of EU nationals with 1 in 8 employees an EU national); R&D (where EU nationals are crucial in filling the skills gap for STEM roles); veterinary checks; and manufacturing (where a third of the workforce—or 117,000 people—are EU nationals and 19 per cent of EU workers are in highly skilled roles). According to the Migration Advisory Committee, 24.3 per cent of the sector’s workforce was made up of EEA migrants in 2016 as opposed to just 2.6 per cent in 2004.
62.A recent report from the Migration Advisory Committee found that:
The sector currently has a very large percentage of migrant workers, particularly NMS migrants […]. EU migrant labour is primarily employed in lower-skilled factory-based roles. Access to flexible migrant labour has been critical to growth of this sector.
The majority of occupations in the processed food and drink sector were low-skilled in 2014–2016 (see Figure 3.7 below). The same report also showed that whilst more than 50 per cent of ‘EU 13+ migrants’ (i.e. migrants from Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, Iceland, Liechtenstein, Norway and Switzerland) occupied high/medium roles in the sector, ‘NMS migrants’ (i.e. migrants from new member states: Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Romania, Slovakia, Slovenia) overwhelmingly occupied low-skilled jobs (see Figure 3.8 below).
63.New Member State migrants have constituted the biggest share of the sector’s migrant workforce since 2009 (see Figure 3.2 below) whilst the proportion of UK and Irish workers in the sector has been declining steadily since 2000 (see Figure 3.1 below).
64.The sector’s substantial reliance on EU (and EEA and Swiss) workers, especially New Member State workers, explains some of the concerns expressed by the witnesses and raises concerns for the capacity of businesses to cope with different migratory rules. According to the ALMR, the hospitality sector—which “is atypical in that it employs relatively large numbers of non-UK labour”—faces potential labour shortages as a result of ending freedom of movement:
We are the third-largest private sector employer in the country. We employ 10 per cent of the UK workforce. It is not a question of skills shortages or simply relying on foreign workers; we face a labour shortage issue.
65.The Food and Drink Federation argued that a restrictive migration system post-transition would cause “significant disruption” and that the referendum had already started to have a negative impact on the sector’s workforce:
Almost half (47 per cent) of businesses surveyed said EU nationals were considering leaving the UK due to uncertainty surrounding their future, and over a third (36 per cent) said their business would no longer be viable if they did not have access to EU workers.
66.All witnesses asked for continued access to EU labour after the transition and said the sector could not cope without a sensible visa system allowing continual movement:
We will certainly survive, of course. I do not think the risks are of that scale, but it would have to be a visa system that allowed that continual movement. It would certainly cause us problems and issues if we could not bring in the right skilled people at the right time, and we are dependent on the EU for that.
It would depend on what the visa system was, but if we were to go to a system modelled on the current tiers and visas for non-EU workers then no, we could not cope.
67.The sector already struggles to recruit enough people to fill its current skills gap and could struggle even further without EU migrants if a solution is not found for its future skills gap as 30,000 food and drink workers a year retire or leave the UK. Across the UK, the sector will need 140,000 new skilled workers by 2024. For instance, the Food and Drink Federation told us:
I have a member who has a factory in the north of England. He runs three shifts, six days a week. His shifts have about 35 to 40 people working on them. He is now always four or five people short; he simply cannot attract labour in the way that he has been able to.
68.Some of our witnesses were confident that in time, they would be able to meet their recruitment needs with UK nationals and were already striving to do so. However, it will take time as explained by the ALMR:
For us, it is about a timescale in which to recruit more UK workers, but there will have to be either a larger pool of unemployed UK workers from which to draw or people shifting from retail jobs into hospitality jobs. I have no doubt that that will happen over time as automation progresses in areas that can be automated. […] [B]ut that will take time when we are in a low-unemployment economy.
Large manufacturers were concerned for their suppliers who may not be able to absorb the costs associated with work visas or have capacity to deal with the added bureaucracy. As a result, they may struggle to access the skill sets they need.
69.In the short term, they were keen to make sure that their current EU employees would be able to remain in the UK. Although witnesses welcomed reassurances in the provisional joint agreement regarding the status of the current EU workforce, they stressed that the problem was not “completely solved”.
70.The processed food and drink sector is heavily reliant on EU (and EEA and Swiss) workers, especially workers from New Member States, for low-skilled and high/medium occupations. The proportion of UK and Irish workers in the sector’s workforce has steadily declined since 2000. Staff shortages are already a problem in the food and drink sector and the sector’s skills gap is predicted to worsen as its ageing workforce retires.
71.In the short term, the Government should ensure that once we leave the EU the sector can continue to have immediate access to the skills it needs. A visa system will add costs and bureaucracy to a sector dominated by SMEs who lack the resources and expertise to deal with a new immigration system. The sector needs support as soon as possible to adapt.
128 Unilever ; Food and Drink Federation,
129 See Environment. Food and Rural Affairs Committee, , HC 348 and not part of the focus of this inquiry.
130 Food and Drink Federation, , accessed 18 March 2018; Food and Drink Federation , para 28
131 EEA stands for the European Economic Area and includes EU countries, Iceland, Norway and Liechtenstein. It is an agreement that allows these countries to be part of the EU Single Market. Switzerland is not part of the EEA but has access to the Single Market via a separate agreement.
132 Migration Advisory Committee, , 27 March 2018, p48
133 ‘NMS migrants’ are migrants from new member states (‘NMS’), i.e. countries that joined the EU after 2004: Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Romania, Slovakia, Slovenia.
134 Migration Advisory Committee, , 27 March 2018, p48
135 Migration Advisory Committee, , 27 March 2018, p50
136 Same as above
137 Migration Advisory Committee, , 27 March 2018, p49
138 Same as above
139 [Kate Nicholls]
140 [Kate Nicholls]
141 Food and Drink Federation , para 30
142 [Ian Rayson]
143 [Kate Nicholls]
144 [Andrew Kuyk]; [Ian Wright]; [Ian Rayson]
145 Food and Drink Federation , para 31
146 [Ian Wright]
147 [Dan Mobley]; [Tim Martin]; [Dan Mobley]; Food and Drink Federation , para 31
148 [Kate Nicholls]
149 [Dan Mobley]
150 [Ian Rayson]
151 Department for Exiting the European Union, , 8 December 2017
152 [Dan Mobley]; [Ian Rayson]
153 [Ian Wright]
Published: 22 April 2018