Hospitality labour shortages set to 'worsen' under new immigration plans

Yesterday (4 December), Home Secretary James Cleverly unveiled a five-point plan to cut immigration, which also included an overhaul of the shortage occupation list.

Under the new rules, set to come into force next spring, the earning threshold for a skilled worker visa will rise by nearly 50% from its current position of £26,200 to £38,700.

In a statement to MPs, the Home Secretary said immigration in the UK was ‘far too high’ and that migration to the country ‘needs to come down’.

“Enough is enough,” Cleverly said.

“Immigration policy must be fair, legal, and sustainable.”

Responding to the announcement, UKHospitality chief executive Kate Nicholls noted that around 95% of the 8,500 hospitality visas issued last year would no longer be eligible under the new plans.

“These changes will further shrink the talent pool that the entire economy will be recruiting from, and only worsen the shortages hospitality businesses are facing,” she said.

“Around three-quarters of hospitality’s workforce is filled from within the UK, but international talent has always been attracted to work in the UK, due to our pedigree for hospitality and developing careers.

“We urgently need to see an immigration system that is fit-for-purpose and reflects both the needs of business and the labour market. The system at the moment does none of that.”

Overhaul to the shortage occupation list

As well as making changes to the skilled worker visa, the Government is also looking to reform the shortage occupation list.

In its current form, the shortage occupation list sets out skilled jobs for which there is a short supply of domestic workers and makes it easier to recruit people from abroad.

It does this primarily allowing the salary threshold under which foreign workers are able to qualify for a skilled worker visa to come to Britain to be reduced by 20%.

However, Cleverly’s plan, the Government will end the 20% salary discount for shortage occupations and replace the list itself with a new ‘immigration salary list’, which will ‘retain a general threshold discount’.

The Migration Advisory Committee, which advises the Government on migration issues, will review the new list against the increased salary thresholds in order to reduce the number of occupations on the list.

Emma McClarkin, chief executive of the British Beer and Pub Association, said the changes would make it untenable for many hospitality businesses to recruit from overseas.

“The Government needs to consider ways to reduce the overall costs and complexities of the immigration system, recognising that many businesses in this sector are SMEs and a balanced immigration strategy that addresses concerns on overall numbers but also fuels growth and supports British businesses,” she said.

“As we enter the festive season, staff shortages in pubs can be exacerbated and skilled roles such as chefs and kitchen staff can be even harder to recruit the best staff.”

‘Another blow’ for the hospitality sector

The changes come as businesses across the hospitality sector continue to grapple with recruitment issues.

Last month, the Ottolenghi group said it had cut operating hours across some of its sites as a result of challenges to recruitment​​ caused by Brexit and the impact of the Covid-19 pandemic.

Padma Tadi-Booth, partner at national law firm Irwin Mitchell, described the changes announced yesterday as ‘another blow’ for the hospitality sector. 

She said: “We have been talking since Brexit about the shrinking talent pool that hospitality businesses are recruiting from and these latest announcements are likely to have a significant impact on firms already struggling to operate at full capacity.

“I’d like to see the Government focusing on a long term solutions that reflects the needs of business. Until we have such a plan, companies in the sector must prioritise making sure their recruitment and retention plans are effective, whilst remembering that having a strong workplace culture, aligned with core values has never been more important.”