Members of the Scottish food industry have written to the Home Secretary opposing proposed UK immigration rules and warning of the potential impacts on the sector if they are to come into place.

NFU Scotland and other key food and farming industry stakeholders – Quality Meat Scotland, Salmon Scotland, Seafood Scotland and Scottish Agricultural Organisation Society – have joined Scotland Food & Drink in expressing “deep concern” about proposals to reduce net migration in the UK by increasing salary thresholds for skilled workers, alongside other planned measures.

In the letter to the Home Secretary, the signatories highlighted how labour shortages were “already reducing productivity” as well as driving up operational costs and subsequently increasing consumer food prices. It said that the proposed rules could “exacerbate” cost-of-living concerns.

Calling for a rethink of the proposed immigration rules, the stakeholders wrote: “We think this is the wrong approach and ignores the essential role that overseas workers play in our industry, and our society. It is of course important to manage immigration effectively, and to ensure that communities continue to have the infrastructure and public services they need.

“It is equally vital to protect our economy and businesses, which already lack a sufficient pool of labour, to ensure communities across the UK have access to affordable, high quality food and drink to protect an industry that employs hundreds of thousands of people and generates £15 billion a year in Scotland alone.

“We need to secure a resilient, productive food supply chain operating across the UK. This requires a large, diverse workforce. Raising the minimum salary threshold for skilled workers from overseas at a time of existing labour shortages will increase the threat to the stability of the whole supply chain, from primary production through to manufacturers, retail, and hospitality providers.”

Supply chain disruptions

The letter referred to the International Monetary Fund’s comments on the benefits of immigration, which said: “From a demographic point of view… an increase in immigration flows, especially of young people, to advanced economies in the North seems desirable. It would reduce population decline, keep the size of the labour force from shrinking, improve age dependency ratios, and produce positive fiscal gains. From a policy standpoint, this means increasing the number of immigrants allowed, reducing other constraints on immigration, and planning for future inflows.” 

The signatories continued: “Raising the skilled worker salary threshold to £38,700 will make the new minimum level higher than many of the vacant roles across the industry. This and the other changes planned will make it harder for businesses to recruit from overseas and for workers who might have considered applying. The impact will be worsened labour shortages, reduced profitability, higher prices and disruptions along the supply chain.

“Labour shortages are already reducing productivity and driving up operational costs, which increases food prices for consumers. At a time when the country is still grappling with a challenging economic climate, including stubbornly high inflation, this could exacerbate the cost-of-living crisis.

“We urge the UK Government to reconsider these proposals. A positive approach to immigration is needed. One that recognises the essential role of overseas workers to fill labour shortages in our food and drink industry. We must ensure that immigration policies support the needs of businesses and the wider economy.”

BMPA responds

The British Meat Processors Association (BMPA) echoed the sentiments of the industry, stating that the rules would ultimately be “anti-growth for UK Plc” and would be “damaging for the economy”.

The trade body said: “There’s growing panic amongst companies across the whole UK economy that it will strangle growth and stoke inflation.

“And yet Government is plowing ahead with this seismic policy change without having produced any impact assessment of the damage it could cause. We calculate for our sector alone this could cost hundreds of millions of pounds, push up food inflation and render British exports much less competitive against our European counterparts.

“The £38,700 threshold to employ a recruit from overseas could cause havoc across factories, offices, pubs, restaurants, warehouses, call centres, shops….the list goes on. Existing UK workers will have the legal right to demand a similar salary uplift, completely distorting the standard market rate for jobs across the UK.”

The BMPA continued, saying: “And, before the Government start trumpeting such a consequence as ‘levelling-up’ or a ‘high-wage, high-skill economy’, what this will actually mean is a large and sudden inflation shock as we pay significantly more for lower skills and less productivity; more than we would have been paying British workers if we could recruit them.

“Despite current competitive rates of pay that are well above the official Government ‘going rates’, companies (not just in the meat industry) find it impossible to fill all their vacancies from the pool of people in the UK, who are either not willing, not able, or not in the right location to take up these positions. So, we need migrants.”