“Without Europeans, we’re f**ked!” This memorable and to-the-point summary was delivered by Bruce Poole, at the inaugural Harden’s London Restaurant Awards, held at the Hippodrome Casino in September.
In receiving his lifetime achievement award, the proprietor of Chez Bruce used his time on the stage to stress the vital contribution made by migrants from Europe in both boosting the quality of London dining, but also in providing the unskilled foot soldiers on which the trade depends.
Another attendee at the awards, who employs 60 people, noted that in the last 15 years of running restaurants, perhaps 5% of his job applications for the post of kitchen porter had come from UK citizens. Where will they come from in future he pondered.
What is the size of the problem? According to the Institute of Hospitality, there are approximately five million non-British nationals working in the UK, accounting for 16% of the workforce. Across hospitality and tourism, 24% of the workforce is made up of non-British nationals. Speaking to a number of chief executives from leading players in the sector this figure seems low, with many believing it to be over a third across their own businesses and industry as a whole. Fourth, the cost control solutions experts, recently suggested that broadly half of the sector’s workforce comes from beyond the UK.
Demographic changes mean that there are fewer younger people entering the job market, which has a proportionally adverse effect on the hospitality and tourism sector as it employs three times the proportion of 16-24 found across the economy as a whole.
Currently, there are no labour restrictions for other EU nationals. However, if restrictions were to be introduced on the back of the UK’s exit from the EU, one option is to introduce a points based system, similar to the one introduced in 2010 for non-EEA. This may make it extremely difficult for those businesses recruiting front of house staff, as they will not be considered sufficiently skilled to fall within any ‘skilled’ occupational list. Similarly, it may be more difficult to recruit chefs as currently the ‘tier 2’ restrictions for skilled occupations means that any chef needs to be earning £35,000 per annum. Currently, the medium annual chef salary is £17,483.
I want to be clear that I am not saying business rates, the state of the property market, increasing supply costs, price inflation or the general hardening of the trading environment aren’t significant issues. However, the majority, if not of all of these, have been absorbed by what has always been a resilient sector, one that has never expected, or on the whole been given, help by the Government. Resilient or not, the potential loss of a significant percentage of your workforce, could be a blow too many. One option to soften that blow is a concerted campaign, which brings all the sector’s associations and businesses under one theme – people, the employment and development of unskilled labour.
Our sector is blessed with some of the most tireless and intelligent lobbyists/advocates that can are to be found currently conversing with politicians on a daily basis on a multitude of issues, some of which are ongoing, some here today and then gone tomorrow. However, it seems they are all having different conversations of different issues all at the same time.
I’ll give an example of the Chancellor’s Autumn Statement last week, which received a muted reception from industry groups amid renewed calls to relieve the pressure on pub and restaurant operators.
Philip Hammond’s decision to freeze beer duty was broadly welcomed, but the British Beer & Pub Association (BBPA) and Campaign for Real Ale (CAMRA) called on him to go one step further and cut the “unfair burden” in his Spring 2017 Budget to lure drinkers away from their homes and back into pubs. The Association of Licensed Multiple Retailers (ALMR) reiterated its call for a wholesale change to business rates, which it said posed a serious difficulty to many businesses. And the British Hospitality Association (BHA) said the Government had missed a trick by failing to cut VAT for tourism, an issue it has long campaigned on. Three worthy issues, three arguments, three voices, one sector’s impact diluted.
At present, we are giving the Government the opportunity to divide and conquer. As Bob Ivell, Mitchells & Butlers chairman and president of the ALMR, told me last week: “Our industry has too many bodies, who don’t work together and shout with one voice. The only reason I agreed to get involved as the president of the ALMR was to push toward talking as one industry.”
The continued confusion over what a post-Brexit employment landscape will look like does provide an opportunity for sector to get behind one cause. And, it seems the Government may have provided the stage in which to state an argument.
At the start of October, the Prime Minister Theresa May asked RSA (Royal Society of Arts) chief executive Matthew Taylor to lead an independent review into how employment practices need to change in order to keep pace with modern business models.
The inquiry will consider the implications of new forms of work on employee rights and responsibilities - as well as on employer freedoms and obligations. The RSA has previously examined the rapidly-changing labour market in projects such as Fair Share and The Power of Small. The wide-ranging review will look at ways to ensure that the regulatory framework surrounding employment, and the support provided to businesses and workers, is keeping pace with changes in the labour market and the economy.
Timing wise it is thought the review will conclude by the end of next February before another crucial date in the Brexit issue. Although the majority of the review is focused on the gig economy, it is thought that the timing of the review will also take into consideration the impact of the varied possibilities thrown up by Brexit.
The next thing will be the ability to provide the Government with possible solutions. Let’s be honest we are all more inclined to take part in a discussion when there is a possible solution involved rather than just a plea for help or an argument being started, the Government is no exception.
Fuller’s is to pay for permanent residency for EU workers who have been with the company for five years because of “an absence of assurances from Government”. Chief executive Simon Emeny told MCA that the company had identified 200 people and was seeking to “guarantee their future with the company”.
He said: “We’re talking about valuable members of staff who have been with us for a number of years, are thoroughly engaged with our strategy, believe in what we do and want to continue their careers with us. We have identified 200 people who have been with the company for approaching five years and we’re helping them apply for residency and covering their costs. It means that in the absence of any assurances from Government we can guarantee their future with the company.”
This is one route to explore, but also maybe a tweaked version of the current two-year Commonwealth visa system.
For too many years to mention, the industry has failed effectively to shout about the opportunities it provides. The sector is also still not first choice as a career and is still not being pushed by teachers and colleges as a route for a progressive and successful career. This remains an industry people can get into quickly and one that has no ceiling on how far anyone can progress. For example, four out of five of the current management team at Stonegate Pub Company, one of the most progressive employers in the sector, all started on or near the lowest rung when entering the hospitality sector.
Of course there will be hard-line Brexiteers who will suggest that this industry is only moaning about staffing issues because it is worried about losing “cheap labour”, not taking into consideration the time and money spent on training or the wages now available due to the National Living Wage. Indeed, one chief executive told me that by 2021, the increases due through the NLW will mean that one of his pot washers will earn c£22k a year.
As a result of the NLW and the Apprenticeship Levy, an increased number of businesses are rethinking their people strategies by placing greater emphasis on staff engagement, increased retention, progression and increased performance. However, efforts in this direction will take time and in the short-term any significant restriction on migrant labour is liable to have a negative impact on many businesses. As we all know, but the Government remains blind to, or cares to ignore, there is not a home-grown workforce waiting to make up any gaps.
Perhaps what is needed is a high-profile spokesperson, one who already has the ear of politicians and the wider media. Three years ago, Jamie Oliver said British youngsters were “wet” in comparison to their European counterparts, who were “stronger” and “tougher”. He said: “If we didn’t have any (European immigrants), all of my restaurants would close tomorrow. There wouldn’t be any Brits to replace them.” Jamie your fellow chefs and would-be chefs need you now.
As we enter a challenging period for the industry, it is time to come together, with one voice and one vision, before Mr Poole’s proclamation has a chance of coming true.
