Meat processing - warnings of a labour shortage

Meat processing - warnings of a labour shortage

Andy Coyne looks at planned changes to the UK's immigration rules, which will bar non-skilled overseas workers, and gauges reaction from the country's food industry.

UK food industry bodies are hoping to convince the country's government that they should be considered a special case in relation to a new post-Brexit, points-based immigration system, announced last week and due to come into force next January.

But their ability to succeed in this regard must be questionable given recent comments from Home Secretary Priti Patel.

The Government's announcement last week that it is bringing in a new system to reduce immigration into the UK, especially from no- and low-skilled workers, would not have surprised anyone. It was after all in The Conservative Party manifesto for December's General Election and such a points-based system was recommended recently by the Migration Advisory Committee (MAC), which, advises the UK government on migration issues.

Announcing the new regime last week, the UK government said it had "listened to the clear message from the 2016 [Brexit] referendum and the 2019 General Election and will end the reliance on cheap, low-skilled labour coming into the country".

But the planned changes are quite startling for all the warnings that they were on the way. The new system will see points awarded for specific skills, qualifications, salaries or professions and visas will only be awarded to those who gain enough. A minimum of 70 points is required before overseas citizens can apply to work in the UK. 

Speaking English is a requirement and there will be no specific route for low-skilled workers. The minimum salary threshold will be set at GBP25,600 (US$33,259).

The immediate response from UK food industry bodies was to warn the system could create a shortage of essential workers in the food industry.

The Food and Drink Federation (FDF), for example, points out a quarter of the permanent workforce in food and drink manufacturing in the UK is from the EU while a smaller single digit percentage is from non-EU countries. It is likely many of those overseas workers employed in the sector would fail to get enough points under the new system to be granted a visa if they were applying after next January.

British Poultry Council (BPC) chief executive Richard Griffiths, who pointed out 60% of the UK poultry industry's workforce are EU nationals, said: "The Home Office's new immigration proposals have shown a complete disregard for British food production and will have a crippling effect on our national food security. I hope the Government understands that the food on their dinner tables is produced in large part by the people who their proposed immigration policy will prevent from coming to this country."

That view was echoed across the food industry and by associated sectors.

Rodney Steel, chief executive of the British Contract Manufacturers and Packers Association (BCMPA), said: "The Government's recent announcement has caused major concerns among the BCMPA membership. If the proposed legislation is implemented, many feel it will have a hugely detrimental impact on their businesses."

While Kate Nicholls, chief executive of foodservice industry body UKHospitality, told just-food: "Britain has high employment and low unemployment rates and there is nowhere near a sufficient pool of workers ready to step in to plug the gap that hospitality needs to fill, particularly when ever fewer young British people are entering the job market. Hospitality businesses need to be able to recruit from overseas."

But such comments, linked to economic necessity, are unlikely to have an immediate impact on a government which is determined to cut down on immigration.

The best hope of the various bodies representing the food industry would be to convince the Government the sector represents a special case.

The MAC is being commissioned to produce a shortage occupation list covering all jobs encompassed by the skilled worker route and to keep the list under regular review. 

The Government said it will allocate extra points for occupations the MAC determines to be in shortage in the UK and will provide immediate temporary relief for shortage areas, making it easier to recruit migrants. 

However, it said it will expect employers to take other measures to address staff shortages, which might include increased training for UK workers, paying higher salaries to attract local people to apply for jobs and the increased use of automation to cut down on the number of employees required.

And Home Secretary Patel may take some convincing before agreeing to put industries on the shortage occupation list.

Speaking in the House of Commons days after making the new immigration plans public, Patel said: "We will continue to refine our immigration system and build in flexibility where it is needed.

"Over time more attributes for which points can be earned may be added, such as previous experience and additional qualifications, allowing us to respond effectively to the needs of the labour market and the economy.

"But to be effective it must be simple so there will not be the endless exemptions for low paid, lower-skilled workers.

"And we are not going to end free movement only to recreate [it] through other routes in name only."

That will not deter industry bodies from putting their case forward, of course.

Griffiths at the BPC said: "The Government must recognise food as a special case that is treated as a national security issue. It must ensure that British food, and the quality it represents, stays affordable and available for all. Losing control of how we feed ourselves as a nation would undermine British food producers at a time when we should be looking to use Brexit as an opportunity to take matters of food security, nutrition, and sustainability into our own hands."

The FDF said it is working with partners across the food chain and taking part in the government engagement programme. It has also commissioned a piece of work looking at what the impact on prices could be and is keen that the sector be included on any shortage occupation list.

Nick Allen, chief executive of the British Meat Processors Association (BMPA) is also refusing to give up hope.

"I like to think pragmatism will rule the day," he says.

Allen is unconvinced by the Government's advice on how to deal with labour shortages.

He told just-food: "Our plants tend to be in places where there is low employment anyway as we are trying to get nearer to where the animals are.

"It's about 70% non-UK labour, [in the meat processing industry] but it is not just about it being cheap.

"These are skilled jobs and they are skills that are disappearing from the UK with the decline in butcher's shops.

"Every animal is a different shape and size so it's not easy to get robots to do it. A certain amount of automation has gone in but not at the initial stage of getting meat off the bones. That's a skilled job and it's difficult to automate.

"We think we should be on the shortage occupation list."

Perhaps the part of the agri-food supply chain with the best chance of being on that list is agriculture.

Estimates suggest around 90% of seasonal agricultural workers are from the EU and, in acknowledgement of this, the Government has said the seasonal workers' pilot scheme will be expanded in time for the 2020 harvest from 2,500 to 10,000 places, responding to the specific temporary requirements of the agricultural sector.

And in a speech to the National Farmers Union (NFU) conference this week, George Eustice, the UK's Environment, Food and Rural Affairs Secretary, said he will make the case for a fully fledged seasonal agricultural workers' scheme if it is necessary to do so.

The NFU has urged the Government to commit to a full scheme for 2021, so growers can recruit the 70,000 seasonal workers needed on British fruit, vegetable and flower farms.  

The FDF agrees with the BMPA about the difficult in solving potential staff shortages through increased automation and training up UK nationals.

Mark Harrison, the FDF's policy manager  for employment abd access to labour, said: "We have the lowest unemployment rate since the mid-'70s and the highest employment rate on record. On a national level, the pool of potential labour is very low in terms of domestic availability.

"Our members are working on training the local workforce but it is a struggle to find people. Members report that they are unable to use their Apprenticeship Levy funding as they do not have enough candidates.

"FDF is supporting our members to automate but it can't be done overnight. There are also key peaks in demand due to seasonal demand and unpredictable large orders from retailers. There may need to be an increase in production but that then falls away so it would be investing in automation that wouldn't be used during the rest of the year.

"And that's even more challenging for SMEs with small profit margins. Automation is often described as a silver bullet but it isn't that."

Nicholls at UKHospitality said: "Britain has high employment and low unemployment rates, and there is nowhere near a sufficient pool of workers ready to step in to plug the gap that hospitality needs to fill, particularly when ever fewer young British people are entering the job market. Hospitality businesses need to be able to recruit from overseas.

"Automation is not the panacea to solving recruitment issues. Automation may have streamlined some processes for some businesses, but businesses in our sector rely, even thrive upon, being able to deliver a human touch. Additionally, food safety and allergen issues are becoming increasingly important and automation may not be able to provide an answer to this."

What all the food industry bodies are agreed on is that if the new immigration rules are implemented as stated and the sector is not judged to be a special case, tough times lie ahead.

Harrison at FDF said: "The impact will be on food prices. They will go up.

"Our members are facing the combination of workforce changes coming in but also the possibility of tariffs and friction at the border. This combination of factors could see a shift in production or maybe a move overseas.

"Prices would go up and the sector has the potential to shrink."

Allen at BMPA agrees. He said: "The worst-case scenario is that it would slow down meat plants. That would have an impact on farmers as they wouldn't get their animals killed when they want and there would be less British food going into the supermarkets."