Make it easier to hire overseas workers, UK ministers told

Ministers must make it easier for UK businesses to hire workers from overseas as labour shortages continue to blight sectors such as hospitality and agriculture, according to the head of the British Chambers of Commerce.

Shortages remain in some industries despite a record level of net migration of more than half a million people in the year to June 2021 and the government’s relaxation of its “shortage occupation list” earlier this year to make it easier for construction workers to come to the UK, said BCC director-general Shevaun Haviland.

“We have a shortage occupation list in place, they are the mechanisms of this current government,” she said. “This is not about unbridled immigration. This is about using those structures to turn on the taps in specific places to help relieve the pressure on businesses.”

Other industries affected by labour shortages include social care and fruit picking. Some hotels were unable to run at full capacity because they could not get enough staff, Haviland said.

Representatives of the food and farming sector have also called on the government to ease immigration rules. The industry gathered at Downing Street on Tuesday for a summit on food security, where prime minister Rishi Sunak promised to boost the UK’s self-sufficiency. 

At the summit, Sunak confirmed that on top of the 45,000 visas the Department for Environment, Food & Rural Affairs will provide for horticultural workers next year, there would be capacity for an additional 10,000. 

Ahead of the meeting, the National Farmers Union demanded a minimum five-year rolling seasonal worker scheme to ease severe labour shortages on farms. The trade body estimated last year that up to £60mn of produce was wasted because of a lack of fruit and vegetable pickers. 

Meat processors, meanwhile, have struggled to recruit butchers with the level of English language skills required under the current immigration rules. Nick Allen, chief executive of the British Meat Processors Association, said the sector had become reliant on butchers from the Philippines, and that it cost about £12,000 to bring them to the UK. 

“When Brexit happened, we were 70 per cent non-UK labour in our meat plants. We’ve got a massive challenge to replace that with British workers,” he said. 

Haviland cited the example of a boatbuilding company in Poole, Dorset, where the owner said he could not fill his £700mn order book because of a lack of laminators of glass-fibre, who used to come from eastern Europe. The necessary replacement workers will take two years to train locally.

She said ministers last summer had been receptive to an expansion of the shortage occupation list but less so in recent weeks.

Haviland, who took up her job at the business lobby groups two years ago, will address members on Wednesday at the BCC’s annual conference — attended by senior business leaders and politicians — where she will offer an upbeat vision of Britain as a “great place to start a business”.

But she said companies faced a challenging backdrop, having been destabilised by a year of political chaos, the spike in energy bills caused by Russia’s invasion of Ukraine, labour shortages and wage inflation.

However, UK companies were not guilty of “greedflation” or profiteering from rising prices, said Haviland.

Companies were absorbing huge increases in costs and trying not to pass them on to customers, she said. “I think we’ve probably estimated there’s input inflation of about 20 per cent and output inflation of 10 per cent,” she said.

Some central banks have warned that “greedflation” risks entrenching price pressures, with profit margins of US companies hitting their highest level for 70 years in 2022, according to a University of Massachusetts study.

Eurozone companies have also increased their profitability sharply over the past two years, according to research by French bank Natixis, but current and former Bank of England officials have suggested UK companies were not profiteering.

Haviland’s intervention comes as Labour MPs called in the House of Commons on Tuesday for a temporary economy-wide “excess profits tax” similar to the windfall tax imposed on the oil and gas sector.

Business was rocked recently by allegations of rape, sexual harassment and bullying at another employer lobby group, the CBI, prompting more than 50 leading members to cut or suspend ties.

Haviland said that in the wake of the allegations the BCC management had checked that its own processes were up to standard. Asked if the organisation had found evidence of harassment or similar allegations, she said: “No, not that I’m aware of.”

Haviland expressed sympathy for the victims of the alleged crimes and for some of the 250 CBI staff whose jobs were now under threat but said the BCC was “having conversations” with some, unnamed, former CBI members about joining her organisation.

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