The UK hospitality sector has faced various challenges in recent years, with staffing issues and labour shortages topping the list. Brexit, restrictive immigration policies and heightened sponsorship costs have all contributed to the industry's inability to fill hospitality job vacancies, including, most notably, hotel staff, restaurant managers and skilled chefs.
In April 2024, the general minimum salary threshold for Skilled Workers looking to come to the UK from overseas was increased from £26,200 to £38,700, making it more difficult for employers to address these shortages, especially coupled with increased visa costs.
Now, ahead of the General Election, and in light of the publication of the Conservative and Labour parties' manifestos, the industry could become even more strained, as both parties seek to further reduce net migration to the UK.
The first part of this blog series explores the key proposals impacting legal immigration, along with an overview of how they may impact the industry, should they be elected to govern, and how employers and employees can prepare for the future direction of UK immigration policy.
Conservative Party Pledges
- Introducing a binding, legal cap on migration to the
UK, which would apply to work and family visas. This number
permitted in the cap would then fall every year of the next
Parliament.
An immigration 'cap' has previously been a feature of the sponsored Skilled Worker visa system, formerly labelled Tier 2 General. This operated by applying a monthly cap on the number of applications for Certificates of Sponsorship, and applications were decided on a points-based system. This system saw higher points awarded for PhD level roles, shortage occupations and those with higher salaries.
If replicated, we could see many hospitality sector roles lose out due to lower salary thresholds across the sector compared to others, and very few roles with PhD level requirements. As the current government has also removed all hospitality roles from the Immigration Skills List (the list identifying shortage occupations), it is unlikely to benefit from this consideration unless sweeping changes are made to the qualifying roles.
- No return to free movement in any form.
The ability for European nationals to move freely to the UK prior to Brexit was a major source of labour for several hospitality roles, especially those where the skill or salary level meant they were ineligible for sponsorship under the work visa routes (such as cooks, cleaners, maids, waiters, etc.).
Given these roles do not meet the skill or salary threshold for work sponsorship, the industry would need to continue to look to other visa routes to fill these vacancies (namely the Graduate route, Youth Mobility Scheme and Students).
- Skilled Worker threshold and Family route income
requirement to increase automatically with inflation.
The current salary thresholds have already proven to be a barrier to the industry, and annual increases would only restrict access even further. For many businesses, recruiting from overseas would no longer be a viable option.
- Immigration Health Surcharge (IHS) to increase
subjectively for those deemed likely to be a higher burden on the
NHS, based on the new requirement to undergo health checks before
travel.
Increases to IHS fees have already discouraged several employers from recruiting foreign workers. Whilst these costs may sometimes be passed on or recouped from sponsored workers, further increases would only make sponsorship even more unattractive. The introduction of an internationally applied health check also raises questions over both the cost and logistical feasibility, as well as the benchmarking that would be applied. Tuberculosis and COVID-19 tests have been applied historically, but these are specific conditions rather than a broader health examination.
- Visa application fees to continue to increase and
student discount for IHS to be removed.
Following the restriction on Student visa holders being able to bring their dependants to the UK, the removal of the IHS discount for students could make the UK an even less attractive destination for international students.
Students can currently work up to 20 hours a week outside of their academic term time and are a significant source of part-time labour in the hospitality sector. Reducing this labour pool would put more of a strain on the sector and its staffing challenges, especially given that students are able to work without added visas costs to the business.
Labour Party Pledges
- Linking immigration and skills policy to address skills
shortages and upskill resident workers.
Certain roles in the hospitality industry, such as chefs specialising in a specific cuisine, require niche skills and often localised training which are not readily available within the UK labour market. There is often a drive to recruit from a specific jurisdiction, which holds more authentic and country-born talent. Several employers utilise the migration system to add diversity and introduce new ideas into the workplace; it may not be possible for employers to upskill resident workers where specific cultural and culinary appreciation and knowledge is required.
- Introducing workforce and training plans.
This pledge is also very vague in its concept, and little has been shared about what this would look like in practice, as well as its purpose. The imposition of more 'red tape' in the hiring process will add cost to the overall recruitment process; a cost this sector will unlikely be able to carry.
- Potential reintroduction of Resident Labour Market
Test.
Like the idea of a 'cap,' this has also been a feature of the work visa process in the recent past; essentially a requirement on employers to demonstrate that they had first attempted to recruit for the role from the local labour market before looking for talent overseas. This historically involved demonstrating that a particular role had been advertised in a prescribed format for a minimum period of 28 days and that no suitable candidate was found; only then could the business explore recruiting from the global market. The reintroduction of this system could prolong end-to-end recruitment and sponsorship processing times substantially, as well as add costs.
- Increased penalties for employers who abuse the visa
system and employment laws.
The civil penalties imposed on employers for illegal working were increased earlier this year. This pledge hints towards enforcing similar penalties and impositions onto employers who ignore the requirements. To ensure compliance, hospitality businesses are likely to require more legal guidance, which could further increase costs.
- End the benefit of Immigration Shortage/Salary Lists
where there is no action to train up resident workers.
Unfortunately, there are currently no roles specific to the hospitality sector which appear on the Immigration Salary List. This pledge will therefore have limited impact on this sector but is likely to significantly damage the economy as a whole; if businesses are financially burdened with having to provide training whilst already struggling with limited labour resources, more vacant roles in shortage supply in the UK could be left unfilled.
Looking Ahead
Regardless of which party is elected to power and proceeds to enforce the manifesto promises regarding legal immigration, the end result will likely remain largely similar: employers in the hospitality sector could face greater challenges and expenses when recruiting overseas workers to fill labour gaps.
Whilst the Conservative party's focus is on further restricting migration into the UK by legally capping numbers and increasing visa and sponsor costs, the Labour party's focus is on upskilling the resident market and placing more of this responsibility on employers who utilise and benefit from the migration system.
Following the election, the reconvention of the APPG's proposal to launch an enquiry into the shortages in the hospitality sector and how these can be best addressed would be welcomed.
Whichever party is elected to govern the UK is faced with supporting a very strained hospitality sector and should be encouraged by the industry, its stakeholders, customers and its advocates, to listen and revise the immigration system to more holistically support hospitality businesses in a post-Brexit, post-pandemic, cost-of-living-crisis era.
It also remains an opportunity for advocacy for the sector, ensuring policymakers truly hear the needs of those in hospitality, collaborating to work towards success for not only the hospitality space but also the country's broader economy.
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