Concerns rising over decline in labour in the food and services sector pre Brexit

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The food and beverage sector remains a key aspect of the UK’s manufacturing industry, however, concerns are rising over the sustainability of the sector, as Brexit looms.

Government statistics on immigration released in August 2017 indicate a decrease in NET migration of EU citizens, down 51,000 in comparison to figures released last year. This could have knock on effect on the sector according to a GMB study of figures produced by the Office for National Statistics, which indicates at least 18 specialist industries whereby EU workers constitute more than 20% of the labour force.

The ONS study shows nearly half – 47.6% – of employees in the fruit and vegetable “processing and preserving sector” are from EU countries. A similar proportion – 44.4% – are involved in meat processing.

In agriculture, just under 35% of workers employed in what the ONS describes as the “growing of nonperennial crops” are EU citizens, along with more than a quarter of workers involved in the manufacture of prepared animal feed and just under a quarter involved in the “manufacture of bakery & farinaceous [starch] products” are EU workers.

Outside of manufacturing, entire industries rely on EU workers for a sizeable portion of their labour force. They make up almost 230,000 of the 1.7 million people working in the hotel and catering industry – 13.5% of the total.

“Manufacturing is a real money-spinner for the economy,” said Jude Brimble, national secretary for manufacturing at the GMB union, “workers from both the EU and the UK, as well as companies themselves, are understandably worried about what lies ahead.” Companies are not the only ones who should be concerned about the imminent decline in workforce, as any subsequent increase in production cost is likely to be passed on the consumer.

Amid concerns from businesses and consumers about the impact that Brexit will have on the labour market, the home secretary, Amber Rudd, has said that the government would be seeking a transitional arrangement, which may involve the continuation of free movement, to ensure there would be no “cliff edge” for employers.

Brimble said: “If the government want to avoid driving the economy off a cliff, they need to engage with business and unions to make sure EU nationals who are already working in crucial roles, contributing to our economy, are protected, and to ensure proper workforce and skills planning for the future.” The government is still confident of striking a comprehensive new free trade agreement with the EU as well as many new bilateral deals that can replace and expand those already in place. It has also guaranteed to match farm support payments for a limited period.

The government has also sought to reassure the vast number of EU nationals already residing in the UK; announcing there will be no change to the rights and statuses of those individuals while the UK remains in the EU.

Whilst the government’s promises appear concerting, for those looking for imminent comfort, it has become clear the government will need to take further, long term action, to steady the decline in EU nationals already leaving the UK.

On 26 June 2017, the Prime Minister announced the UK government’s offer to EU nationals currently living in the UK.The message reads loud and clear and is set out in the willfully titled ‘Safeguarding the position of EU citizens in the UK and UK nationals in the EU.’

The UK government’s offer to EU citizens will give those people who have been living in the UK since before a specific cut-off date, equivalent status and entitlements to benefits and services as they currently have. This cut-off date will be agreed during the negotiations but it will not be before 29 March 2017 (the date Article 50 was triggered) or later than the date the UK leaves the EU.

The paper outlines the government’s intentions to provide ‘settled status’ to those EU nationals who have been resident in the UK for 5 years. EU citizens who are ‘awarded’ ‘settled status’ will be free to live in the UK and have access to public funds and services. People who arrived before the cut-off date, but won’t have been resident for 5 years on the UK’s departure from the EU, will be able to apply to stay until they have reached the 5 year threshold. They can then also apply for settled status.People who arrive after the cut-off date will be able to apply for permission to remain after the UK leaves the EU, under the future immigration arrangements for EU citizens.

The government article considers further the importance of protecting the position of current EU residents commenting “EU citizens who came to the UK before the EU Referendum, and before the formal Article 50 process for exiting the EU was triggered, came on the basis that they would be able to settle permanently, if they were able to build a life here. We recognize the need to honor that expectation. The choice made in the Referendum was about our arrangements going forward, not about unravelling previous commitments.” Implication drawn from the above statement suggests those already resident can breathe a sigh of relief, as the paper suggests the government will not be taking action to remove EU nationals already resident in the UK when article 50 was triggered.

The food and drink industry can therefore seek comfort from government proposals amidst concern surrounding a sudden decline in labour following Brexit.It is certainly reassuring to those involved in the food and drink sector that the government’s intentions do not appear to be focused on removing EU nationals from the UK, in fact quite the opposite. It is also worth noting the Net decline in migration of 51,000 is a contextually small number in light of the hundreds of thousands of EU nationals who chose to move to the UK last year. While that’s not to say the food and drink sector won’t be deprived of its workforce in the future, we need to concentrate our efforts on finding the best way forward to ensure the sustainability of the sector, whilst taking heed of warnings not to prevent any potential new workers from taking residence in the UK amidst a complex new legal system, so as to encourage the replenishment of the already diminishing EU labour workforce.

 


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