Labour shortages in the food and farming sector

The evidence we have received leaves us in no doubt that labour shortages, caused by Brexit and accentuated by the pandemic, have badly affected businesses across the food and farming sector. If not resolved swiftly, they threaten to shrink the sector permanently with a chain reaction of wage rises and price increases reducing competitiveness, leading to food production being exported abroad and increased imports. We are also extremely concerned about the impact this is having on the well-being and mental health of people working in the sector.

While the whole food and farming sector has suffered from labour shortages, the situation for the pig sector has been particularly severe. Although the Government has taken measures to address the backlog of pigs on farms awaiting slaughter, the issue remains unresolved and the number of pigs being culled continues to rise. We were particularly disappointed by the Secretary of State’s attitude suggesting the current plight of pig farmers was simply the materialisation of a commercial risk for which businesses should be prepared. This ignores the covid-19 pandemic, for which nobody was prepared, but also the impact of the Government’s immigration policy. Since we took evidence, the sector has faced even greater pressure with feed prices rising as a consequence of the war in Ukraine.

We note the apparent lack of fairness in many contractual arrangements as highlighted by the Minister for Farming, Fisheries and Food. We therefore welcome the Government’s decision to review fairness within the pig supply chain. However, pig farmers continue to experience real and distinctive hardships and need immediate support. Given the potential market failure represented by inherent inequity in sectoral contractual arrangements we call on the Secretary of State to use the powers under the Agriculture Act 2020 to intervene with measures aimed at providing support for pig farmers rather than pork processors. We also call for the Government’s review of fairness in the pig supply chain to be taken forward as a matter of urgency and for the final report to be published before the end of July 2022. (Paragraph 21) Responses to labour shortages

The food and drink sector has responded to the current labour shortage by increasing wages and introducing various incentives. However, this has not always been successful and, where it has worked, it has often resulted in labour movement and churn within the sector leading to higher labour costs which will have to be passed on to the consumer. This shows the need, at least in the short term, to increase the overall supply of labour through revised immigration measures to address the current crisis.

The Government’s temporary short-term visa schemes for poultry workers, pork butchers and HGV drivers were seriously deficient. They were implemented too late, with many workers unable to arrive in time to help the sector prepare for Christmas and avoid poultry businesses reducing production. The schemes were not attractive Labour shortages in the food and farming sector 35 due to the short notice and the very limited periods of time workers were allowed to work in the UK. We are therefore not surprised that the number of successful applicants was far below the number of visas available. The Government would be wrong to conclude the relatively low take-up meant that the sector’s concerns over labour shortages were exaggerated.

We do, however, welcome the fact that the Government was willing to introduce temporary short-term visa schemes for the food and farming sector but it should learn the lessons from the operation and performance of these schemes and apply them to any similar schemes that are needed in the future. We recommend that the Government must conduct a comprehensive lessons learned exercise on the operation and performance of the temporary visa schemes. This must be informed by meaningful engagement with the sector. The Government should publish the result of this study before the end of July 2022.

We are concerned that, despite existing channels, the Government did not acknowledge the sector’s mounting concerns about labour shortages earlier in 2021. The Government should not have been “waiting for the data” before taking any action. It should have had contingency plans to mitigate the fairly obvious risks and developed specific measures far sooner in response to first-hand accounts being provided by the sector. The whole of Government needs a step change in how it engages with industry, taking seriously the concerns they raise and acting promptly on them. As a first step in achieving this, we recommend that the Food Industry Resilience Forum should meet at least monthly throughout 2022 and 2023, for a senior Home Office official to attend, and for the Government to publish minutes of its meetings within a fortnight.

We also recommend that the Government reviews the timeliness of the data it relies on and, in any reply to this Report, sets out what datasets it uses to monitor the sector, how regularly these are updated, and the time lag between the period covered by the data and data being received and examined by the Department. (Paragraph 38) Broader immigration policy

We agree that migrant workers should have a reasonable understanding of English to allow them to communicate at work, integrate into their new communities, protect them from exploitation, and ensure health and safety at work. However, we do not believe this requires a blanket approach to the English language requirement, and that a more tailored approach could be taken to support the food and farming sector. The fact that the Minister for Safe and Legal Migration thought that the language level requirement was lower than it really is suggests to us that there should be some room for greater flexibility. Given the Minister for Safe and Legal Migration’s position that Skilled Worker Visa applicants only need “basic conversational English”, we recommend that the Home Office must immediately lower the English language requirement to a “basic user” level (either the A2 or A1 scale) of the Common European Framework of Reference for Languages for those Skilled Worker Visa roles in the food and farming sector.

We are disappointed that the Home Office Minister for Safe and Legal Migration refused to recognise that businesses recruiting overseas labour face costs far in excess 36 Labour shortages in the food and farming sector of the visa application charges. We were not satisfied with the Minister’s response when he refused to accept this fact. We reiterate our previous recommendation that the Government must urgently consult with the sector to establish what additional costs businesses face when applying for visas for vital overseas labour and to develop an action plan to minimise bureaucratic barriers and process costs. We call on the Government to publish a report and action plan within six months of the publication date of this Report.

Given the labour shortages facing the food and farming sector, we are surprised that the Government chose to ignore its own Migration Advisory Committee’s (MAC) advice on which roles should be added to the Shortage Occupation List (SOL). While we note the Minister for Safe and Legal Migration’s argument that adding roles to the SOL is not as impactful as it once was for better-paid roles such as pork butchers, it is likely to have been helpful for other lower paid roles. Furthermore, if the Government is correct that it would have made no difference then there was no downside in adding those roles to the SOL. Indeed, it would have been a powerful signal to food and farming businesses that the Government was doing everything possible to help the sector. We recommend that the Government immediately add the food and farming roles that were contained in its MAC’s September 2020 recommendations to the SOL. We also recommend that the MAC use its power to initiate its own inquiries to review the labour needs of the food and farming sector.

We welcome some of the reforms that Government has made to the Seasonal Workers Pilot, including accepting our recommendation that the scheme is extended to the ornamental sector and the provisional announcement of the number of Seasonal Worker Visas for 2022 through to 2024. Given the expansion of the SWP scheme to include ornamentals, we recommend that the Government should immediately make available the additional 10,000 visas. The Government should publish monthly updates on the seasonal labour market to create an evidence base for whether further visas should be issued. The Home Office must also engage closely with the sector to ensure a smooth flow of seasonal workers and to make sure that UK Visas and Immigration is resourced to swiftly process Seasonal Worker Visas.

We also call on the Government to make the Seasonal Workers Pilot a permanent scheme and for it to commit to announcing the number of visas that will be available under the scheme on a rolling five-year basis. (Paragraph 69) Longer term solutions

In the longer term, we agree with the Government that the sector needs to shift its focus away from immigration and toward domestic workers and technological innovation and development. While not able to deliver results overnight, a greater focus on the development and deployment of technology combined with attractive educational and vocational training packages to attract British-based workers could reduce the sector’s dependence on overseas labour. It is vital that the Government works with the sector to develop a sustainable labour plan to make the most of these opportunities and potential. The Government must produce a long-term strategy setting out how technology and labour will together meet the evolving needs Labour shortages in the food and farming sector 37 of the food and farming sector. This work must be cross-departmental in nature and closely engage those within the sector who will be vital to achieving its successful implementation. (Paragraph 75) Conclusion

The evidence we have taken leaves us in no doubt about the seriousness of the issues facing the food and farming sector caused by labour shortages. These include food security, animal welfare and the mental health of those working in the sector. In contrast, the Government has not demonstrated a strong understanding of these issues, and even on occasion sought to pass the blame onto the sector on the basis of incorrect information about its own immigration system. The Government must radically shift its attitude and work together with the sector to devise solutions that speedily help address the problems it faces, in the short, medium and long-term to help the UK’s food industry and enable it to thrive. Failure to do so risks shrinking the sector and leading to higher food inflation at the price of the UK’s competitiveness, thereby making the country more reliant on food imports as we export our food production capacity—as well as the jobs it supports—abroad. (Paragraph 81) 38 Labour shortages in the food and farming sector