252.EU nationals can exercise their free movement rights in two respects: first, as EU citizens, and secondly, as workers. Under Articles 45–48 TFEU, EU workers have the right to work in any Member State; to travel to any Member State to seek employment; to live in any Member State; and to claim some benefits after being employed. These rights are explained in more detail in our report on Brexit: UK-EU movement of people.
253.Freedom of movement has enabled EU nationals from other Member States to take up seasonal as well as permanent jobs throughout the agri-food supply chain and across the UK. The exact proportion of EU labour is unknown, but it is clear that EU migrants make up a substantial proportion of the workforce across all agricultural sectors in the UK. Dr Viviane Gravey, Dr Brian Jack and Dr Lee McGowan from Queen’s University Belfast told us: “Of the 80,000-seasonal workforce in horticulture alone, 98% are migrants from elsewhere in the EU.” According to Dairy UK, “On average non UK born [labour] accounts for around 11% of the processing workforce” in the UK dairy industry, while the British Egg Industry Council told us that approximately 40% of staff on egg farms and approximately 50% of staff in egg packing centres were EU migrants. We heard from the National Pig Association that “one in five farms and businesses connected to the pig industry would struggle to survive without migrant labour”, and from the British Poultry Council that “Of the 35,900 direct employees [in the British poultry meat industry] around 60% (21,540) are migrant workers”. According to the BMPA “around 63%” of the workforce of the British red and white meat processing industry are “from the EU27 countries (mainly, but not exclusively, central and eastern Europe)”.
254.A loss of EU labour in one part of the agri-food supply chain could have an impact on the rest. Guy Smith, Vice President of the NFU, commented that “I am here to represent farmers but I am very conscious that the rest of the food chain, including abattoirs and vets, is very dependent on migrant labour, so indirectly our industry would be damaged if we did not have access to that skill set”. Similarly, the Agricultural Industries Confederation (AIC) told us: “Whilst labour is less of a direct issue for AIC members … we are very conscious of the indirect impact on the whole industry if there is an inability for growers and others (e.g. food manufacturers) to access sufficient short term and casual labour.”
255.One consequence of a persistent shortage in labour supply could be higher costs for the consumers. The British Poultry Council told us: “Labour is a significant portion of the cost of production. With more roles to fill, fewer people interested (UK and migrant), and competition from other sectors and countries we will see the cost of production increase.” Similarly, the Food Foundation noted: “Decreased labour availability/increased costs could likewise raise consumer prices of horticultural produce.”
256.We heard from the British Growers Association that seasonal labour was vital to the UK horticultural sector: “Currently the sector relies on around 90% of its total seasonal labour requirement (75,000–80,000) coming from the EU.” This was echoed by Allan Wilkinson, Head of Agrifoods at HSBC Bank plc: “There is very heavy dependence on seasonal labour to harvest key sensitive high-value crops such as hops and soft fruit and certain fruit and vegetables.” Wyn Grant, Emeritus Professor of Politics at the University of Warwick, concluded that the “horticultural sector and the field vegetable sector … could not function without the seasonal labour that comes to it”.
257.George Dunn, Chief Executive of the TFA, emphasised that “it is not just seasonal labour that we need; we also need permanent labour for full time jobs”. The BMPA pointed out that “The meat processing sector is not particularly seasonal, so these [EU] staff are in the workforce all year round”, while the British Poultry Council informed us that, in their sector, “21,540 migrant workers are in long-term (in employment terms: permanent) roles”.
258.Witnesses noted that EU labour accounts for significant proportions of some specialised agricultural roles, most notably in the veterinary profession. Fergus Ewing MSP, of the Scottish Government, told us that “a significant proportion of the veterinary profession working in Scotland are EU-nationals, particularly in food hygiene and state veterinary medicine”. The First Minister of Wales described a similar picture.
259.In determining the impact of Brexit on the access to labour in agri-food, no easy distinction can be made between skilled and unskilled labour. Mr Smith told us: “I am very wary of describing these people as unskilled; they are extremely diligent and clever at what they do.” Despite this level of work specific skill, he told us that: “I suppose in terms of visa requirements it will always be unskilled because you do not tend to get degrees in picking vegetables.” The BMPA accordingly argued: “We would like to see the definition of ‘skilled’ to mean an ability that has to be learnt through study and/or practice, something that someone could not walk in off the street and immediately do to the necessary level.” NFU Scotland similarly cautioned that “a points-based system led by skills will be of little use to the agricultural food processing industry in particular. For example, having skill with knives is essential in abattoirs however this may not be considered on the same level as veterinary training in a visa process.”
260.Peter Hardwick, Head of Exports at the AHDB, suggested: “When you talk about skilled or non-skilled labour, it might be better to redefine that as ‘hard-to-fill vacancies’.” He gave the example of working in an abattoir: “The work is quite hard or not entirely pleasant … those jobs may be quite low-skilled, but they are extremely hard to fill from local sources.” Mr Dunn agreed: “We need to have a system that says, ‘What is the need? Is there a supply?’ If not, we need to have a system that allows that supply to be brought in.”
261.The Minister acknowledged many of these concerns: “We should not lose sight of the fact that in many areas it is where you have what people would deem unskilled labour that you have the gap, so it is not about saying that we are going to have these skilled people and we do not want the unskilled.”
262.The heavy reliance upon migrant labour reflects in part a shortage of domestic labour. Witnesses suggested a number of reasons for this. Prof Grant told us that “it is no good going into the local unemployment pool because the labour from there is not reliable, it does not turn up and does not work very efficiently”. Ian Wright, Director General of the FDF, suggested that in areas of the country with “super-full employment”, UK workers were unwilling to undertake the journeys or tolerate the conditions involved. The BMPA noted that meat processing work “does not have high social cachet—for reasons of food safety the sites are kept cold, workers wear a significant amount of food and personal safety equipment, the work is physical and it is shift work. So when there is availability in the local workforce we tend to lose out to other industries”. More broadly, Mr Ewing pointed out that “rural populations are ageing and in certain areas declining. Demographic change and the rural workforce are two of the reasons why Scotland needs movement of people”.
263.The shortfall in EU labour is already a problem, as Mr Breitmeyer told us: “We do right here and now face a shortage, even in 2017.” The Food Ethics Council warned that “parts of the sector are already finding it difficult to recruit and retain enough staff”, while Mr Smith told us that “some of my horticulturalists are saying they are struggling to recruit at levels they have in the past”. Mr Dunn raised the same concerns:
“Already with the reduction in the exchange rate we are seeing some EU nationals making the decision to return to their home countries, because they have seen a 20% reduction in their salaries … There are certain parts of the country where we are seeing pretty repugnant xenophobia, which is also encouraging people not to feel welcome and return home. We have a problem now with labour.”
In the food and drinks industry, Mr Wright also noted that “we are seeing those [EU] workers beginning to think about going home”. He added: “For us, an urgent challenge is for the Government to come forward with a pledge that European workers can stay here”.
264.Many workers in the agricultural sector are often regarded as ‘unskilled’, but are in fact extremely skilled at sector-specific tasks such as crop handling and harvesting. We recommend that the Government recognise these skills when assessing labour needs and access to foreign labour after Brexit. We also welcome the Minister’s recognition that continued access to EU labour should be based on an assessment of the needs of the industry, rather than a simplistic distinction between skilled and unskilled labour.
265.UK agriculture and food sectors are highly dependent on access to not only seasonal, but also permanent, skilled and unskilled (in terms of education level) workers from the rest of the EU. The entire food supply chain will be adversely affected by any loss of access to that labour pool.
266.We particularly bring to the Government’s attention the overwhelming reliance of the sector on EU citizens providing veterinary services in abattoirs, which are essential to ensure compliance with food standards and regulations.
267.The evidence we heard suggests the agricultural sector is already struggling to fill vacant positions and that this challenge is being exacerbated by the uncertainty surrounding the UK’s withdrawal from the EU. We therefore urge the Government to work with farmers and the food processing industry and to assist their recruitment efforts.
268.In our report on Brexit: acquired rights we concluded that the longer the future of EU nationals in the UK is uncertain, “the less attractive a place to live and work the UK will be, and the greater labour market gaps will be”. This risk is already materialising in the agri-food sector, and we therefore repeat our call for the Government to clarify the rights of these EU nationals to remain and work in the UK.
269.Taking the steps necessary to meet the recruitment needs of the agricultural sector will take time. As Mr Smith said, “You cannot do it at the drop of a hat, by putting a note up in the pub and people turning up the following day, as they did in my dad’s time. There is an element of preparation.” He continued: “Talking to some other horticulturalists, they say they are now trying to recruit through British universities more than they did in the past to make up for what may be that gap.”
270.But as Mr Dunn noted, “We cannot turn off the tap of that EU labour that we have been used to … We absolutely need to look at the visa system to ensure that we have the right access for a transitional period while we build capacity at home.” To that end, Mr Smith expressed interest “in a return to what was called the old Seasonal Agricultural Workers Scheme (SAWS) where people came in to this country to work at one establishment, one business, and then went back to their homes having served that contract”. NFU Cymru noted that “the prospect of sourcing labour from beyond the EU also has to be considered”.
271.The Minister told us: “It is quite possible, if we decide that there is a need in agriculture or, indeed, even in food processing, to grant the right type of work permit that would enable the numbers of people we need to be able to come here and work for the duration that we need them to.” Robert Goodwill MP, Minister of State for Immigration, has also told the EU Home Affairs Sub-Committee that “Brexit gives us the opportunity to have an off-the-peg immigration policy that addresses many of the concerns those in … agriculture have expressed”, and that a seasonal agricultural workers scheme was “one model that might be worthy of consideration”. Mr Eustice noted that the reinstatement of a SAWS was “very much a discussion that is taking place between the Home Office and industry”. In supplementary evidence he added: “In terms of EU nationals, we are considering carefully options for the new immigration system once the UK exits the EU, and specifically EU nationals’ access to the UK’s labour market.”
272.In our report Brexit: UK-EU movement of people, we noted that an apparently restrictive work permit system with exemptions for particular sectors, such as a SAWS, “could produce the worst of all worlds, failing to deliver a meaningful reduction in immigration while also proving more onerous and costly for employers, prospective applicants, and those charged with enforcement”. We also note that on 15 March 2017, Mr Goodwill told the House of Commons EFRA Committee that “We do not believe there is sufficient evidence to justify a seasonal agricultural workers’ scheme in 2017”.
273.Mr Wilkinson addressed the possibility of addressing labour shortages by means of technology: “When we come to look at the substitution of one resource for another … some technology is available, mainly robots and the like, but it is about making sure the industry or the enterprise concerned feels confident enough to make the investment, which might take two or three years—in some cases 10 years—to repay.” The Food Ethics Council echoed this point: “A fall in migrant labour will be an impetus for further technological advances … The issue here, though is whether—with the current uncertainty over the terms of Brexit—companies will have the confidence to invest in large scale mechanisation.”
274.There are also limits to automation, as Mr Smith told us: “At the moment there is no such thing as a robot that can pick a strawberry; it does not exist other than in a lab somewhere.” Mr Breitmeyer commented: “The problem is the quality that they need to put into the supermarkets. Innovation has not yet produced the equipment to ensure that quality. It can do the job, but it will not ensure the sufficient quality.” The BMPA agreed: “Some tasks are simply still beyond the wit of a machine—wrapping small, wet cocktail sausages in bacon to make pigs in blankets is an obvious one.” They added: “The slaughter line is not prone to automation because the machines are not dextrous enough to adapt quickly and efficiently to the different shapes and sizes of the animals.”
275.In the short term, technology cannot materially reduce the UK’s need for EU agricultural labour; nor is there sufficient local labour to address the shortfall. Unless arrangements are made to preserve access to labour from outside the UK, the agri-food industry will suffer major disruption.
276.The UK agri-food supply chain employs both seasonal and permanent EU workers, so a seasonal agricultural workers scheme alone, though a priority for our witnesses, will not be a sufficient measure for preserving access to labour.
408 European Union Committee, (14th Report, Session 2016–17, HL Paper 121)
409 ; also supplementary written evidence from Soil Association () and written evidence from Dr Viviane Gravey, Dr Brian Jack and Dr Lee McGowan ()
410 Written evidence from Dr Viviane Gravey, Dr Brian Jack and Dr Lee McGowan ()
411 Written evidence from British Egg Industry Council ()
412 Written evidence from National Pig Association ()
413 Written evidence from British Poultry Council ()
414 Written evidence from British Meat Processors Association ()
416 Written evidence from Agricultural Industries Confederation ()
417 Written evidence from British Poultry Council ()
418 Written evidence from The Food Foundation ()
419 Written evidence from British Growers Association ()
423 Written evidence from British Meat Processors Association ()
424 Written evidence from British Poultry Council ()
425 Written evidence from Scottish Government ()
426 Written evidence from Welsh Government ()
427 We considered in detail the issue of low-skill versus high-skill labour in our report (14th Report, Session 2016–17, HL Paper 121), Chapter 4.
428 ; also (George Dunn)
429 Written evidence from British Meat Processors Association ()
430 Written evidence from NFU Scotland ()
434 also (Tim Breitmeyer)
436 Written evidence from British Meat Processors Association (); also NFU Cymru ()
437 Written evidence from Scottish Government ()
439 Written evidence from Food Ethics Council ()
440 ; also written evidence from British Meat Processors Association ()
445 (Guy Smith); also (Prof Wyn Grant) and (Tim Breitmeyer)
446 Written evidence from NFU Cymru ()
448 Oral evidence taken before EU Home Affairs Sub-Committee, 11 January 2017 (Session 2016–17),
449 Oral evidence taken before EU Home Affairs Sub-Committee, 11 January 2017 (Session 2016–17),
451 Supplementary written evidence from Department for Environment, Food and Rural Affairs ()
452 European Union Committee, (14th Report, Session 2016–17, HL Paper 121), para 167
453 Oral evidence taken before Environment, Food and Rural Affairs Committee, 15 March 2017 (Session 2016–17),
455 Written evidence from Food Ethics Council ()
458 Written evidence from British Meat Processors Association ()