The Press and Journal (Inverness, Highlands, and Islands)
Work permit crisis to be the ‘new normal’
BY JESSICA PATTINSON
Many key industries in the north-east and the Highlands are facing a labour crisis that could cripple their growth this year, fuelled by a combination of Europeans leaving and a work permit system that simply doesn’t allow most employers to recruit internationally.
The drawn-out Brexit negotiations have already caused a huge shift in the labour market. Latest statistics show that there are fewer Europeans moving to the UK and more leaving – for the 12 months following the June 2016 referendum there was a decrease of 43 per cent in net migration from the EU, or 82,000 fewer people, with this decline continuing through to the end of last year.
The announcement on March 19, 2018 that free movement of EU nationals would continue until December 31, 2020 will ease some of the uncertainty around EU immigration in the shortterm, however, this news has come too late for some employers who have already lost valuable talent. It remains to be seen whether this most recent concession on citizens’ rights will convince EU nationals that the UK is the best place for them to work and develop a career.
Brexit is not the only factor at work here. The fall in the pound is making Britain less attractive to temporary workers from the Eurozone, and improving economic prospects in Eastern Europe means the flow of workers from countries such as Poland would likely dry up of its own accord eventually.
The combination of these issues will mean that employers, across a range of sectors, will increasingly need to look further afield to fill vacancies. However, the work permit system currently in place was simply not designed to deal with the dramatic shift we are seeing in the labour market.
Employers recruiting professionals, such as engineers, teachers and medical staff, have in the past been able to sponsor work permits for international recruits where no resident worker is available to fill a given vacancy. However, demand for the fixed quota of work permits is significantly exceeding supply, meaning that for the month of March 2018, only work permits for those being paid over £60,000 were successful. Aberdeen’s offshore industries are among those affected. The north-east also relies on some foreign workers for its healthcare services, and there have been reports that even doctors are finding it difficult to meet the salary threshold. Dentons is recommending that employers plan recruitment well in advance and manage expectations around likelihood of success, as the shortage of work permits is likely to be a “new normal”, rather than a short-term issue.
For industries requiring less skilled labour, even that option is unavailable, as the UK lacks a suitable immigration system for unskilled, temporary or otherwise relatively low-paid workers. Thriving hospitality and tourism, agriculture, food and drink and fish processing are all suffering from serious labour shortages.
The Migration Advisory Committee (MAC), an independent branch of the Home Office that conducts research and economic analysis to inform policy-making, has been commissioned to report on the current and likely future patterns of EU migration. Their analysis will provide an evidence base for the design of a post-Brexit immigration system. Last week the MAC released an interim report, in which they highlighted the growing concern among employers about the potential negative impact of restricting immigration in the UK, and the increasing difficulty in recruiting workers across a range of sectors.
This was underscored by the recent warning from farming union NFU Scotland that the number of EU nationals who wanted to work in the sector was declining and that, without renewed migration, Scotland’s fruit and vegetable growers would be unable to continue their drive into key markets.
It’s a challenge recognised by Neil Redford, finance director of Angus Soft Fruits, who would welcome an open scheme that is “defined now and available soon”. Otherwise, he says, “workers will find alternative places to go this season and then be harder to attract back in later seasons, if and when a suitable seasonal agricultural work permit scheme is introduced”.
The final report from the MAC, likely to include recommendations on for a post-Brexit immigration system, will only be published in September 2018.
Employers in Scotland want to recruit more local people, but it may take years to create new talent pipelines to replace those coming from the EU. Hospitality industry bodies, for example, are already doing all they can to encourage Scottish youngsters to consider a career in food and drink. The positive impacts of these campaigns will not be enough to counteract the sudden loss of workers from the EU.
It is time for some creative and dynamic policymaking to ensure that these key industries are able to secure the staff they need. Immigration policy should be an extension of our strategic aims and labour market needs. Immigration protects and strengthens key industries providing critical public services, and acts as a catalyst for innovation and growth in future industries. If we look at farming, agriculture and food processing, these are essential for domestic food security in an era of climate change. We should be asking what support these industries need to expand, diversify and innovate, rather than putting them at risk with a one dimensional immigration policy.
“Workerswillfind alternativeplaces togoandthenbe hardertoattract backinlaterseasons