UK immigration policy fear of Scottish food and drink chiefs

Looking at the matter from any rational perspective, it is clear there is a major problem with the UK Government’s immigration policy.

And the negative effects of this policy are crystal clear.

The Scottish food and drink industry leaders warn Mr Cleverly of the dangers of his "proposals to reduce net migration to the UK by increasing salary thresholds for skilled workers" alongside other planned measures.

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The letter is from Iain Baxter, chief executive of Scotland Food & Drink. It is also signed by National Farmers Union of Scotland chief executive John Davidson, chief executive of Quality Meat Scotland Sarah Millar, Salmon Scotland chief executive Tavish Scott, chief executive of Seafood Scotland Donna Fordyce, and Tim Bailey, chief executive of the Scottish Agricultural Organisation Society.

Declaring they are “deeply concerned” by his proposals, they tell Mr Cleverly in the letter: “Raising the skilled worker salary threshold to £38,700 will make the new minimum level higher than many of the vacant roles across the industry. This and the other changes planned will make it harder for businesses to recruit from overseas and for workers who might have considered applying. The impact will be worsened labour shortages, reduced profitability, higher prices and disruptions along the supply chain.”

The current threshold is £26,200, so what Mr Cleverly proposes is a huge rise, of 48%.

The food and drink industry leaders add: “Frankly, we could not do what we do without our overseas workers, and messages about wanting to reduce legal migration will have a negative impact on talented people living here already or living overseas looking for meaningful work. We are proud to be a major employer, a major contributor to exports, and, in many ways, the engine for economic growth in Scotland, as well as a major contributor to Scottish tourism, with food and drink among the top reasons for visitors coming here.”

They note that “labour shortages are already reducing productivity and driving up operational costs, which increases food prices for consumers”.

That is surely easy enough to understand.

The Scottish food and drink sector leaders express their view that the findings of a review commissioned by the UK Government itself into labour shortages in the sector have been “ignored”.

They say: “The UK Government commissioned John Shropshire to conduct an extensive independent review into labour shortages in the food supply chain, which was published in June 2023. It found that the food and drink supply chain faces unprecedented challenges, including recruiting talent. One stark conclusion from the review was that ‘the domestic workforce is not large enough and does not have the required skills to make the English food supply chain self-sufficient in terms of labour supply’. The same situation applies in Scotland. We have not seen a UK Government response to this review, but the actions and statements made about immigration suggest it has been ignored.”

This seems like a fair enough conclusion, surely, from the lack of response from the ruling Conservatives to a report they commissioned themselves, and the grim mood music of course.

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Putting things in a more general context, the Scottish food and drink industry leaders note the International Monetary Fund has “written of the benefits of a positive approach to immigration”.

The sector leaders quote the IMF as follows: “From a demographic point of view … an increase in immigration flows, especially of young people, to advanced economies in the North seems desirable. It would reduce population decline, keep the size of the labour force from shrinking, improve age dependency ratios, and produce positive fiscal gains. From a policy standpoint, this means increasing the number of immigrants allowed, reducing other constraints on immigration, and planning for future inflows.”

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The food and drink industry leaders add that a second, more recent piece of research by the IMF concluded that “in [the] OECD (Organisation for Economic Cooperation and Development), large immigration waves raise domestic output and productivity in both the short and the medium term, pointing to significant dynamic gains for the host economy”.

And they note the IMF’s comment that it found “no evidence of negative effects on aggregate employment of the native-born population”.

Summing this up very well indeed for Mr Cleverly, the industry leaders say: “Put simply, the UK requires a sustained high level of annual net migration to maintain the size of the UK’s workforce in the context of our ageing population. Businesses who cannot recruit people into key positions will ultimately fail, and that has a knock-on effect across the supply chain and the wider economy.”

What is more, they even provide Mr Cleverly with an example of sensible behaviour.

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They tell him: “If we look to what other countries, such as Germany, are doing, we see recognition of labour shortages, a drive to simplify the processes for businesses, reducing costs, lowering the threshold for salaries to below the median, and removing language and qualification requirements. That is in a country which currently benefits from an accessible labour pool across the European Union.”

That accessible labour pool across the European Union, and broader European Economic Area, used to, of course, benefit the UK greatly, across myriad sectors of the economy including food and drink.

This was before the Conservatives decided on a hard Brexit which ended the free movement of people between the UK and EEA, fuelling a skills and labour shortages crisis across so many sectors.

Given how clearly Scotland’s food and drink industry leaders have set out the huge damage of his proposals to reduce immigration, is Mr Cleverly likely to act now?

All that the food and drink sector is asking for is a “fair and sustainable immigration system that supports the needs of our sector and does not risk its long-term future”.

Sadly, however, the Tories seem more interested in hidebound ideology than in addressing the entirely justified deep concern of Scottish food and drink industry leaders about immigration policy.

This is well illustrated by one section of the letter to Mr Cleverly, in which Mr Baxter and other sector leaders declare: “Our red meat sector has described the impact of your planned changes as ‘the most significant threat we face in 2024’ due to an ongoing shortage of butchers. They are not alone. Scotland Food & Drink conducted an industry survey into labour shortages in 2023 - 92% of respondents across a wide range of sectors told us that they are currently unable to find or attract enough suitable employees to meet their operational needs. Many began to explore recruiting skilled workers from overseas, even as costs rose.

“These additional changes will act as a deterrent, which may be the intended outcomes, but appears sadly short-sighted. We were particularly disappointed to see the Minister for Legal Migration and the Border refer to ‘employers trying to recruit cheap labour from overseas at the expense of the British worker’. This is not a fair reflection of the situation.”

The stark contrast between the reality, as laid out for Mr Cleverly in the letter complete with expert views and research from those close to what is actually happening on the ground, and the glib statement about “cheap labour” from Tory minister Tom Pursglove pretty much says it all.

It is a truly incredible state of affairs.