Immigration has been a dominant theme of the General Election campaign so far. Unfortunately, while much of the debate has sought to address concerns held by some over the number of people wishing to come to the UK, virtually nothing has been aired about the positives immigration can bring.
Indeed while the two biggest parties, Labour and the Conservatives, and of course Reform UK make plain their desire to reduce net immigration, industries such as hospitality continue to struggle badly from an acute shortage of staff. How they miss the many talented and hard-working people from countries within the European Union who routinely came to work in the UK hospitality industry before Brexit.
The difficulty posed by the UK Government’s post-Brexit immigration policy was hammered home by Louise Maclean, a senior director of Signature Pubs, owner of more than 24 venues across Edinburgh, Aberdeen, St Andrews and Stirling, in a BBC radio interview this week.
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Ms Maclean, who is also a director of the Scottish Hospitality Group, told the Today programme that recruiting staff for front-of-house roles in Edinburgh is “not bad”, noting that the firm can provide skills to young people from the age of 18 for such jobs as long as they are “bubbly and sparky”.
However, she said it is a lot more challenging to find people to work back of house, declaring that it is as “hard as it has ever been” to find head chefs and kitchen porters.
“I would like to see a way for the Europeans to come back to work in our country,” Ms Maclean said. “We miss them. We miss their work ethic. We miss their drive.”
Signature recently hired six chefs from India who have “hit the ground running”, Ms Maclean noted. Asked why recruiting staff from India was unable to offset the loss of workers from Europe, she said hiring people from India was “very expensive” because of UK Government immigration controls. UK employers which wish to recruit skilled workers from overseas must pay those individuals a minimum salary of £38,700.
“We have to guarantee them a certain type of job,” Ms Maclean said. “We have to guarantee them a certain wage. And, as I am sure you know, our biggest challenge right now is labour costs. Our P&L (profit and loss account) for April was dismal because the minimum wage went up and for Signature alone that took £875k off our EBITDA (earnings before interest, tax, depreciation, and amortisation) in the year, and our price rises have not matched that wage inflation.”
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Referring to politicians who said outlets could simply increase prices in response to rising labour costs, Ms Maclean responded: “Fish and chips have a ceiling. You cannot charge £25 for fish and chips in Edinburgh. We are desperately trying to keep pints of beer under £7, and what that is doing is having a massive mark on our GP (gross profit). Our GP is dropping.”
Of course, the concern expressed by the hospitality industry over staff shortages is nothing new. In the years before the referendum on the UK’s membership of the EU in 2016, the industry and indeed many others repeatedly warned that ending the free movement of people between the UK and countries in the European Economic Area (EEA) would bring big problems to the sector and this is precisely what has happened.
Equally, declarations made by some that the industry could simply replace workers originally from the EEA with UK citizens or those with settled status are as unlikely now as they were then.
Stephen Leckie, chief executive of the Crieff Hydro Family of Hotels, for one, has repeatedly expressed his concern over staff shortages in the sector arising from Brexit, and explained the difficulty of encouraging more UK citizens to enter the industry because the hours are viewed as anti-social.
The dearth of staff, when combined with the cost pressures businesses have faced from the inflation crisis of recent years, constrains the ability of operators to provide the level of service consumers increasingly demand, and ultimately harms Scotland’s reputation as a tourism destination, he has argued.
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Immigration is, of course, a complex and emotive subject, and it would be naive to think it has not contributed to tensions in parts of the UK.
But it is hard to escape the conclusion that ignoring the very real needs of an important sector such as tourism and hospitality by cracking down on its ability to recruit staff from within the EEA is an act of economic self-harm.
The hospitality sector, however, is not giving up without a fight, especially when staff shortages are so acute. New research published this week found that hospitality vacancies in Scotland had increased by 60% between January and April this year.
The research, conducted by recruitment website Caterer.com, found that chefs, front-of-house staff and restaurant management were the three most difficult roles to fill in Scotland.
The report found that, while hospitality businesses in the UK recruit more than three-quarters of their staff from within the UK, Scottish firms are finding “unique challenges” in the numbers of people available to work, citing the declining birth rate in Scotland and the rural nature of much of the nation.
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Leon Thompson, executive director of UKHospitality Scotland, called for a “dedicated Scotland visa” to ease the challenges.
Mr Thompson said: “Scotland’s hospitality and tourism sectors have been such a huge success story, and have been essential in making Scotland a leading visitor destination globally.
“Like the rest of hospitality in the UK, our businesses have struggled to recruit staff. This ongoing issue is putting at risk hospitality’s ability to serve Scotland and create places where people want to live, work and invest.
“A dedicated Scotland visa which allows sectors facing shortages to recruit essential staff would be a gamechanger for Scottish hospitality. It would also be clear recognition from an incoming government that the needs of business will be reflected in our approach to immigration.
“With such clear support from the business community for a dedicated Scotland visa, I hope all political parties heed the call and commit to its introduction.”
As a footnote, it was very interesting to see the SNP pledge to introduce a lower rate of value-added tax (VAT) for the hospitality and tourism sector in its manifesto, which the party launched yesterday. It may ultimately prove to be little more than a symbolic gesture, but the industry will certainly be encouraged that the party has recognised the difference such a move could make to the competitiveness of pubs, bars, restaurants, and hotels in the UK.
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