Spectre of exodus of EU labour haunts UK

Construction workers at London Waterloo train station. Many industries, including construction, face a crippling shortage of labour after the UK leaves the EU. Simon Dawson / Bloomberg

UK businesses are facing potentially devastating labour shortages following the country’s vote to leave the European Union, as European workers are deterred by the low value of the pound and negative perceptions about the UK post-Brexit.

“Europeans are being put off coming to working the UK, and those already here are leaving the UK,” says Clive Watson, the chairman of the City Pub Company, a chain of upmarket hostelries in the south of England. “There are 3.2 million EU citizens living in the UK. If even 10 per cent of those go, there will be big gaps and it’s going to get worse.”

UK employers are having trouble recruiting and retaining EU staff across many different industries: healthcare; construction; agriculture; retail; food; logistics; IT; and food and drink sectors. Hospitality and tourism have been hit particularly hard: 75 per cent of waiters and waitresses; 25 per cent of chefs; and 37 per cent of housekeeping staff are EU nationals, according to The British Hospitality Association (BHA). In a new report it warns that UK hotels and restaurants will fold if they cannot recruit the 600,000 workers they need each year to replace churn and drive growth. If EU migrations falls to zero after 2019,  it says there would be a shortfall of 1 million workers in a decade's time.

“While Brexit will encourage some employers to work harder to recruit local candidates and people from under-represented groups in the UK, many employers are already working to build links with schools, provide apprenticeships and invest in training and yet are unable to find the skills and people they need,” says Peter Cheese, the chief executive of the employers body, the Chartered Institute of Personnel and Development (CIPD).

“Employers have difficulty attracting sufficient UK nationals to work in low-paid and low-skilled jobs particularly where hours are anti-social or the work environment challenging, despite offering higher pay and investing in the skills of the workforce in some cases.”

Mr Watson agrees: “Many English people think they’re above working in hospitality. Europeans helped the hospitality industry grow, and now we have great bars and restaurants. If they leave they’ll lose their diversity and quality.”

He says UK employers will have to work harder to recruit, increasing pay and giving employees training and career prospects, as he says he already does. His company, he says, has good staff retention but he does not feel immune to future pressure on labour supply.

“I think the test will come once EU nationals know what their rights are going forward. If they are curtailed, you’ll see a big drift back to home countries.”

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With the EU economy doing well, Mr Watson predicts that EU workers will return to their home countries - where the economy is picking up - and they feel welcome.

Meanwhile, the lack of clarity on the government’s post-Brexit immigration policy has left UK business owners in limbo, with one in five organisations surveyed by the CIPD saying that without access to EU workers and the free-trade EU Single Market they are considering moving all or part of their UK operations - and plans for future growth - abroad.

“Access to skilled and unskilled labour is a huge concern for employers,” says Mr Cheese.

“If the government does not provide a straightforward, flexible and affordable immigration system for EU nationals post-Brexit, significant numbers of employers are likely to face real skill shortages which may hold back their growth and performance," he says.

"The Government must consult far more widely about their plans and invite employers to play a key role in shaping the future of UK immigration policy to ensure it works for businesses and the economy.”