Tag: Labour

Changes to Immigration Rules

On 7th December, the UK Government announced a series of changes to its immigration rules that it is proposing to introduce from spring 2024.  If enacted, these changes could have significant implications on the UK agri-food sector, particularly companies which rely heavily on migrant workers.  The key changes suggested include:

  • Increased skilled worker salary threshold: the eligibility threshold for visas will rise from £26,200 to £38,700 from April – a 48% rise.
  • Changes to the Shortage Occupation List (SOL): from April 2024, it is proposed that the SOL will be replaced by a new Immigration Salary List.  The 20% discount on the going rate for for job roles on the current SOL will also be ended and will be replaced by a ‘general threshold discount’.  The Migration Advisory Committee (MAC) is to review the new Immigration Salary List and associated thresholds.  As this affects some agricultural positions (e.g. agricultural trades, veterinarians), it could have a substantial impact on labour availability and costs for many agri-food companies, if enacted.
  • Student (graduate) visas: the graduate route, which allows students who have studied at degree level or above in the UK to remain and seek employment, will be reviewed to address potential abuse.  Further announcements affecting this route will be made once the review has been completed.
  • Dependent visas: spouses and children accompanying Skilled Worker visa holders will need to meet a higher income threshold to qualify for a visa.  The threshold will rise from £18,600 to £30,800 per year.

The Government’s aim in introducing these changes is to reduce net migration down towards 300,000 per year.  It is currently in excess of 700,000, significantly higher than when the UK was an EU Member State.  If the changes are implemented as currently proposed, it will be another major headwind for the agri-food sector on the back of a high-inflationary period.  Importantly, the Seasonal Workers’ Scheme (SWS) is not affected.  The SWS currently allows up to 45,000 seasonal workers (with stays of up to 6 months) to work in the UK agricultural sector, with an option to increase this number by another 10,000 if necessary.

Large swathes of the UK food processing industry are heavily reliant on migrant labour to fill full-time positions – not just seasonal work.  The Government’s proposed changes are a broad-brush approach which give little consideration to these labour needs.  Several attempts have already been made to recruit more indigenous workers into food processing.  In almost all cases, the numbers employed have fallen a long way short of targets as British workers have little interest in working in some job roles (e.g. abattoirs).  In a bid curb immigration, the Government is in danger of adding fuel to the threat of more price inflation.  Whilst automation is advancing, it is still a long way short of addressing the agri-food industry’s labour requirements.  It is clear that a more substantial agri-food workers’ scheme is needed which caters for both the industry’s full-time and part-time labour requirements.  Otherwise, the competitive position of many UK agri-food companies will be further eroded.

Further information on the UK Government’s proposed plan is available via: https://www.gov.uk/government/news/home-secretary-unveils-plan-to-cut-net-migration#:~:text=From%20next%20spring%2C%20the%20government,relying%20on%20migration%2C%20while%20bringing

Trade Policy Blueprint

The UK Trade and Business Commission, a body consisting of business and political leaders from opposition parties as well as international trade experts, recently launched its blueprint for future trade policy.  It is designed to address key barriers to trade and help grow of the UK economy.  The blueprint was launched at the Trade Unlocked conference in Birmingham.  This event was attended by over 650 businesses, industry leaders and several Labour MPs, including the Shadow International Trade and Foreign Secretaries.  As such, the conference provided an interesting insight to the potential direction of a future Labour Government.  The Commission’s recommendations, if enacted, would have significant implications for agricultural trade.  They include;

  • ‘Beneficial’ alignment with EU Standards and Regulations:  whilst staying outside the EU Single Market and Customs Union, the Commission suggests that there is ‘everything to be gained’ by the UK aligning with EU Standards and Regulations, where it is beneficial to do so.  The Commission also suggests that where it is sensible to diverge, the UK should use its freedom to do so, whilst acknowledging that costs would arise in such instances.  It argues that this would give greater predictability regarding the UK’s regulatory system,  helping investment.  It is also seen as key to achieving a UK-EU Sanitary and Phytosanitary (SPS) and veterinary agreement  – something that a future Labour Government is particularly keen on.  In addition to SPS, other areas where the Commission calls for alignment include;
    • Food safety: the UK should maintain and uphold the key principles of EU food safety standards, including the General Food Law (EC 178/2002) and EU regulation (EC 852/2004) on the hygiene of food stuffs.
    • Chemical contaminants and residue monitoring: continue to align with EU maximum residue limits (MRLs) for pesticides and align veterinary drugs’ regulations with the EU.
    • Foodborne disease surveillance and outbreak response: the UK should actively participate in the various EU surveillance networks and systems including the Rapid Alert System for Food and Feed (RASFF) and have close collaboration with the EU across a range of other disease-related areas.
    • Safeguard against lower quality imports: the UK Government should ensure that imported food products meet minimum regulatory standards that apply to domestically produced food, including on environmental requirements and animal welfare.
    • Organic food equivalence: maintain regulatory alignment between the UK and EU for organic food standards to facilitate continued equivalence beyond December 2023.
  • Establish a new regulatory forum for trade cooperation with the EU: this UK-EU Regulatory Council would be styled on the US-Canadian Regulatory Cooperation Council and would aim to reduce non-tariff trade barriers and build on the commitments made in the Windsor Framework.  It would be established ahead of the 2026 review of the UK-EU Trade and Cooperation Agreement. This is a sensible approach and the US-Canada relationship provides a useful template for how the future UK-EU trading relationship should be managed.
  • Establish a new UK Board of Trade: this would be an independent body acting for the Department for Trade and Business in much the same way as the Office for Budgetary Responsibility (OBR) acts for the Treasury. As such, it would impartially assess the UK’s trading performance and help to drive improvements across Government.  It would also provide impact assessments of new and existing trade deals and assess areas of divergence between the UK’s and other trading blocs’ regulations that will benefit the UK economy.  Its board would include representatives from major UK business organisations, SMEs, trade unions, devolved Governments, and senior experts in trade and regulation. One would imagine that if such a body were established that it would supplant many of the functions of the Trade and Agriculture Commission.
  • Visa system reform: to address labour shortages, including in agriculture.  This would include a comprehensive review of the Seasonal Worker Visa Scheme to determine areas for improvement and give greater long-term certainty to businesses.  It also calls for the reform of short-term and business visa rules to enable corporations to bring in highly-skilled personnel for short-term projects and to extend the maximum permissible stays under business visas to enable UK businesses to pursue longer-term projects.  It also calls for a bilateral and reciprocal Youth Mobility Visa Scheme with the EU allowing young people (aged 18-35) to travel and work in both UK and the EU for up to five years.  In addition, it calls for the UK to develop targeted skills development programmes to address labour shortages in specific sectors.  Many in the agri-food sector are likely to be sceptical about this latter recommendation as numerous organisations have tried to recruit and train indigenous workers, with minimal success. 

Overall, given the make-up of the UK Trade and Business Commission, and statements by Shadow Ministers at the UK Trade Unlocked conference, it is evident that a future Labour Government will seek a much closer relationship with the EU.  Whilst the EU will be open to such an approach, it has other priorities given what is happening in Eastern Europe.  Its appetite for any renegotiation of the Brexit deal is minimal.  This is recognised in Labour circles; hence the focus of the UK aligning with EU regulations.  The EU will also push back strongly on any attempts to dilute what it sees as the indivisibility of the Four Freedoms of the EU Single Market.  Without free movement of people and leaving open the possibility for UK regulations to diverge in the future, the EU will not offer the UK frictionless trade.  That said, significant improvements are possible and should be pursued. 

The full report is accessible via: https://www.tradeandbusiness.uk/blueprint

Image source: Best for Britain

Migration Advisory Committee Report

The Government’s post-Brexit plans for migration policy have become a little clearer, but still present significant problems for the agri-food sector regarding future labour availability.

On 28th January, the Migration Advisory Committee (MAC), which advises the UK Government on labour policy, published its report on a future points-based migration system as well as recommendations on salary thresholds for migrant workers coming to the UK with a job offer.  This study was commissioned by the Government in September 2019.  The UK will be introducing a skills-based migration system for both European Economic Area (EEA) and non-EEA workers when the current Brexit Transition Period ends (i.e. 2021 onwards).

The MAC recommends lowering the salary threshold for experienced skilled workers (currently categorised as ‘Tier 2 General’) to £25,600.  This would remain an employer-sponsored route (i.e. migrants would have to have a job offer).  The category would be expanded to include ‘medium’ skilled occupations.  The new threshold is significantly lower than its heavily-criticised previous recommendation of £30,000 which would have precluded large swathes of jobs in the agri-food sector. Whilst this is an improvement, many agri-food businesses would still struggle to recruit skilled operatives where annual salaries are often in the £20,000 to £22,000 range.  Furthermore, there are questions as to whether some occupations (e.g. butcher) would be considered as a ‘skilled’ category according to UK Government definitions. 

Notably, the MAC also recommends setting a simplified formula for the salary thresholds of new entrants (i.e. those aged under 26 on application, or overseas students studying in the UK) to £17,920; a 30% reduction on the experienced rate.  This should help agri-food companies in recruiting some additional personnel, but would not be a long-term solution for manual food processing positions.

The report is lukewarm on adopting a Points-Based System (PBS), claiming that when it was adopted in the UK in the past for high skilled workers, it did not work well.  Frequently, immigrants would end up working in significantly lower-skilled positions than what was envisaged upon entry.  If a PBS were to be adopted in the future, the MAC would recommend a cap on the numbers participating.  It also advises that the Government should consider characteristics such as age, qualifications (which need to be rigorously assessed), having studied in the UK, language skills and the UK’s priority skills areas.

It also mentioned that the current UK system is rigid and that there should be flexible paths to long-term settlement.  This could include a PBS and occupations on the Shortage Occupation List in the past six years should continue to be exempt from thresholds.  As we have mentioned previously, agri-food businesses need to get key job functions onto the Shortage Occupation Lists, particularly given recent difficulties in recruiting employees.  Whilst the recent announcement by the Conservatives of an expansion of the Seasonal Agricultural Workers’ scheme pilot from 2,500 to 10,000 would be of some help, these numbers still fall well short of what is needed in the UK agri-food sector. 

The full MAC report is accessible via: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/860669/PBS_and_Salary_Thresholds_Report_MAC.pdf 

 

Migration Advisory Committee Report

The recently published Migration Advisory Committee (MAC) report calls for a radical shift in UK migration policy in a post-Brexit world.  Its findings could have major implications for UK agri-food if implemented.  Its key recommendations are listed below with some additional observations in italics;

  • Focus on high-skilled workers: the UK should adopt the general principle for migration policy that it should be easier for higher-skilled workers to migrate to the UK than lower-skilled workers. This potentially exposes the agri-food sector to the risk of significant shortfalls in labour as a substantial proportion of businesses rely heavily on migrant labour to fill operative positions.  Since Sterling’s decline from mid-2016, companies have been experiencing increased problems in sourcing labour.  A move towards focusing on higher-skilled positions will make this challenge more pronounced for food and farming companies.
  • No preference for EU/EEA migrants: this is based on the assumption that UK immigration policy is not included in the agreement with the EU.  This is an arguably unrealistic assumption given how important free-movement is to the EU and the UK’s desire to retain strong access to the Single Market.  Whilst it is perhaps understandable for the MAC to avoid getting embroiled in the current political debate, a report on future migration policy should at least consider a range of future scenarios, one of which is some form of linkage to the EU/EEA as enhanced Single Market access will almost inevitably come with conditions attached.  Note that the EEA is the European Economic Area and includes Norway and Iceland in addition to the EU-28.
  • Abolish the cap on the number of Tier 2 (highly skilled) migrants allowed into the UK: following on from the previous point, this scheme would be equally available to non-EU and EU/EEA migrants.
  • Tier 2 migration open to medium-skilled workers: this makes Tier 2 applications possible for all jobs from RQF 3 or above (RQF ‘ranks’ the skill level).  This means that some more medium skilled jobs (including some professional trades) would be potentially included.  In conjunction with this, the MAC also states that the Shortage Occupation List (SOL) will be reviewed in its next report in response to the SOL Commission.
  • Salary thresholds: maintain existing threshold (£30,000) for all Tier 2 migrants.  It also argues against having regional salary thresholds. When considering the average wage rates for manual/operative positions in agri-food, this threshold is prohibitive. 
  • Immigration skills charge: currently set at £1,000 for most employers.  This should be retained but reviewed.
  • Resident Labour Market Test: this is the requirement to advertise a job vacancy locally before employing migrant labour.  The MAC suggests consideration should be given to abolishing the test.  If it is not abolished, then it advocates extending the numbers of migrants who are exempt through lowering the salary required for exemption.
  • Sponsor licensing system: review how the current system works for small and medium-sized businesses. Any moves to decrease the bureaucratic burden required would be welcomed by most businesses.
  • Consult: engage more systematically with users of the visa system to ensure it works as smoothly as possible.
  • Avoid Sector-Based Schemes: the MAC states these should be avoided for lower skilled workers, with the potential exception of a Seasonal Agricultural Workers scheme.  Whilst some might view it as a positive that the MAC is arguing for a special status for agriculture, most industry professionals believe that a seasonal scheme is simply insufficient for the wider agri-food sector, particularly in year-round operations within the processing sector.  Without labour to process its produce, UK agriculture will struggle to find markets for its outputs.  It is important that this point is made strongly to Government as it appears that the MAC has given insufficient consideration to the wider agri-food industry which relies heavily on migrant labour and has severely struggled to meet its labour needs via indigenous workers.
  • Encourage agricultural productivity: by ensuring upward pressure on wages via an agricultural minimum wage if the SAWS is to be reintroduced. There is a general consensus in the industry that productivity needs to be increased.  But it is not just a question of raising wages, it also concerns issues such as good broadband connectivity, modern transportation infrastructure and better training. It therefore needs a holistic approach from Government working in close collaboration with industry. Focusing on wages alone will not make the UK workforce more productive and could end up generating poorer value for money if not managed properly. 
  • Addressing low-skilled labour gaps: calls for extending Tier 5 Youth Mobility Scheme to meet this need. It is important to point out here that whilst the UK Government may consider some tasks (e.g. fruit picking, meat deboning etc.) to be ‘low-skilled’), they do require specialist skills which sometimes can take several years to develop.  By focusing on youth only, there is a danger that UK businesses will miss out on such expertise.  The focus should surely be on securing the best workers possible for the task at hand that is not available indigenously, no matter what their age is or where they come from. 
  • Monitor and evaluate the impact of migration policies.
  • Local level impacts: pay more attention to managing the consequences of migration at local community level. This is crucial and has arguably been overlooked by policy-makers in the past decade or so.  In some areas, the influx of migrants coupled with austerity has exerted severe pressure on health and education services.  In future, if migration has a more pronounced impact on a given region, then it should be eligible for top-up funds to help cope with the additional burden placed on public services so that the indigenous population does not lose out. 

On Northern Ireland, the MAC report acknowledged that there are unique circumstances and complexities as a result of its land border with the Irish Republic and that the agri-food sector is particularly exposed.  However, it does not look favourably on advocating a separate migration scheme for Northern Ireland, nor a UK-wide scheme to deal with agri-food issues (with the exception of seasonal workers) as outlined above.  In this regard, the MAC is potentially concerned that Northern Ireland would be used as a precedent for the whole of the UK or for other devolved administrations in Scotland and Wales to have their own separate policies.  Given the politics at play in Westminster, it is likely that the DUP will have an influential role in all of this and are likely to push for a NI-specific scheme on fears that NI agri-food businesses could lose-out to companies south of the border. 

The MAC report is seen as an important milestone for the UK in setting its own migration policy post-Brexit.  It is perhaps unsurprising that given a topic as emotive and important as migration that the report’s publication has been met with a broad mixture of views from across the UK generally, but the response from the agri-food sector generally has been lukewarm.  The report is available to download via:  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/740991/Final_EEA_report_to_go_to_WEB.PDF

Rights of EU Citizens Post-Brexit

On 26th June, the UK Government published proposals intended to protect the rights of EU citizens in the UK and UK nationals in the EU.

These confirm the creation of a new ‘settled status’ for EU citizens who arrive before a cut-off date, to be determined during Brexit negotiations with the EU.  EU migrant applicants who already have 5 years’ continuous residence in the UK will be immediately eligible for settled status.  Those who arrived before the specified date but do not yet meet the 5-year threshold by exit day will be allowed to stay until they reach that milestone and can secure settled status.  EU citizens who are granted settled status would be treated like a comparable UK national, entitled to broadly the same rights and benefits.  The proposals also include a grace period of up to 2 years allowing all EU migrants to regularise their status to remain in the UK.  All applicants will undergo full criminality checks.

Other key points include;

  • family dependants who join a qualifying EU citizen in the UK before the UK’s exit will be able to apply for settled status after 5 years
  • EU citizens seeking to remain in the UK will be asked to apply for documentation under a new streamlined, user friendly scheme
  • protection for the existing healthcare arrangements for both EU citizens in the UK and UK nationals in the EU.  The UK is seeking continued participation in the European Health Insurance Card scheme (previously known as the E111) for all UK nationals and EU citizens, including for temporary visits
  • the UK intends to provide certainty by continuing to export and uprate the UK State Pension within the EU, as well as offering reassurance that those exporting a benefit at the specified date will be able to do so, subject to ongoing entitlement
  • EU citizens who arrived before the specified date should be able to continue to be eligible for Higher Education (HE) and Further Education (FE) student loans and ‘home fee’ status.
  • the UK intends to continue to recognise professional qualifications obtained in the Member States prior to the UK’s EU withdrawal.  This would be part of a reciprocal deal which ensures professional qualifications obtained in the UK and EU Member States continue to be mutually recognised.

Further information is available via – https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/621848/60093_Cm9464_NSS_SDR_Web.pdf 

These proposals come on the back of a Home Office announcement on 20th June concerning a settlement scheme for EU nationals living in the UK.  The Home Office proposed that EU citizens living in the UK and their family members will need to apply under the settlement scheme to obtain their new UK immigration status via three steps.  These include the need to prove their identity, show that that they live in the UK, and declare that they have no serious criminal convictions.  The proposed application fee is £65 and £32.50 for a child under 16.  For those who already have valid permanent residence or indefinite leave to remain documentation, they will be able to exchange it for settled status for free.

Applications for the scheme will take place via an online system which will be accessible through phones, tablets, laptops and computers.  The Government will also provide a support system to ensure that it is available for everyone.  The scheme will open in a phased way from later this year and will be fully open by 30th March 2019.  The deadline for applications will be 30th June 2021. Further information is available via – https://www.gov.uk/government/news/home-office-publishes-details-of-settlement-scheme-for-eu-citizens

These announcements bring much needed clarity for EU migrants currently living in the UK and should also help agri-food employers in securing a significant proportion of the labour it needs to operate competitively in the long-term.  That said, numerous agri-food businesses are finding it increasingly difficult to secure new labour for business operations.  This is a problem irrespective of Brexit and the need for a work-permit system which would enable UK businesses to access migrant labour over the longer term (from the EU or elsewhere) is becoming increasingly apparent.  The Republic of Ireland has recently announced a trial third-country work permit system for operational positions within its agri-food and horticultural sectors (e.g. for workers from Ukraine or Brazil).  The UK Government should pursue similar initiatives so that a robust and transparent migration system is established before free movement ends.