Advice

UK hospitality is set to feel the full force of Brexit

There is no denying that the current events surrounding Brexit are nothing short of a chaotic mess. With May’s second deal being rejected in Parliament last week, an extension of Article 50 is looking to be a likely option, so long as the EU agrees to it.

If they don’t, we will have a no-deal on our hands, an option that could be much more disastrous for industries across the UK. Unfortunately for the hospitality sector, either outcome could have major implications on the future of their workforce, resources and trade. Here’s what the hospitality industry can expect in a Brexit Britain.

As the UK’s third biggest employer and providing jobs to 2.9 million people, maintaining the hospitality sector as a successful and growing business is being increasingly jeopardised by rising staffing and recruitment pressures in the lead up to Brexit. A survey by Caterer.com last November found that two thirds of the 21,000 hospitality workers asked were planning on quitting their jobs in the near future – 59% of those were intending to find new job opportunities in the next six months.

Issues in retaining the current hospitality workforce are exacerbated by May’s post-Brexit immigration plans which will see the end to free movement between the UK and other European countries. Currently, 12% of hospitality workers come from the EU, making up a significant chunk of the labour force in cleaning, front-of-house and in-service roles in hotels, bars and cafes.  In fact, a report by the Confederation of British Industry (CBI) states that three quarters of EU citizens fill waitressing roles, one third in hospitality and a fifth in kitchen and catering. With EU workers contributing undeniable value to hospitality’s labour workforce, it is vital that Britain remains an appealing and rewarding destination to work.

However, new visa requirements laid out in the government’s White Paper sadly speaks otherwise. After Brexit, all EU workers will be subject to work visa restrictions which require those looking to maintain or seek employment in the UK to make a Tier 2 application. This comes as a major concern for the hospitality sector after it was declared that EU citizens will have to earn at least £30,000 a year and have at least £1,000 in savings in order to be eligible for a Tier 2 work visa.

Set to be implemented after 2020, this hugely restrictive requirement results in 96% of EU hospitality workers no longer being eligible under the new financial threshold, particularly young people. Katie Nicholls, the UK’s hospitality chief executive, expressed her fears of a no-deal Brexit, saying that it would ‘shrink the talent pool and hit every aspect of hospitality from hotels, restaurants and bars, to the cost of people’s morning coffee’. Unless a practical deal is decided, the impact of a diminishing workforce within the hospitality sector will be felt across British everyday life.

In addition to this exclusionary measure, employers will also have to make a sponsor license application in order to officially ‘sponsor’ a migrant worker and bring them to the UK. This comes with a costly fee and involves a series of complex and timely processes, making delays for recruiting workers inevitable. The combination of visa applications, complex sponsor licenses and a prevalent hostile environment policy still permeating British politics, migrant workers are more than likely going to look to other EU countries for employment opportunities.

With or without a deal in place, the government has assured EU nationals already in the UK that they will be able to continue their work until December 2020. During this time, EU citizens can apply for settled-status – allowing them to reside in the UK indefinitely – or pre-settled status – allowing them to stay in the UK for five years, where they can then also apply for settled status. Whilst this measure is a step forward for securing the rights of EU nationals, the temporary nature of the scheme puts huge pressure on individuals who may not have the resources or support to ensure they apply before the cut-off-date. For those who are do not apply in time, their employment rights in the UK will no longer be protected.

Whilst staffing and recruitment issues are the most obvious of consequences set to hit the hospitality sector, statistics have shown that the implications for trade will also have negative consequences for the industry. In the last year, the UK received £48 billion worth of food and drink from the EU with over 70% of that trade coming in free of tariff costs and duties. Whilst a good trade deal with the EU could result in retaining these free costs, a no-deal could result in the soaring of tariff prices. If the UK adopts The World Trade Organisation’s rules of an average tariff of 27% for food and drink, the supply chain for hospitality will be hit with huge costs that the sector will certainly struggle to cope with.

So long as the government fails to decide a Brexit deal, the future of the hospitality sector remains worryingly hazy. With the disruption to employers and EU workers seeming inevitable, the extent of these damages rests upon the creation of a practical immigration and trade solution to alleviate the potential no-deal catastrophe that the sector could face. The government desperately needs to acknowledge the undeniable value that EU migrants bring to the industries’ workforce and the current trade opportunities that we share with the EU. For the hospitality sector, a no-deal simply can’t be an option.


By Maddie Grounds, a writer for the Immigration Advice Service

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