Category Archives: Hospitality

Why so-called ‘Barista Visas’ won’t help UK Hospitality Workers

Version 2
Matthew Cole

Home Secretary Amber Rudd has recently introduced the idea of a so-called ‘barista visa’, undoubtedly to militate against the potentially disastrous effects of Brexit for UK businesses. The proposal was suggested by Lord Green, chairman of the right-wing think tank Migration Watch UK, who claimed it would, “kill two birds with one stone” by meeting employer needs while “maintaining links with the EU”. By links, he must have meant links to a highly exploitable workforce with no rights. The ‘barista visa’ would allow young European citizens to migrate to the UK and work in the hospitality industry for up to 2 years; however, it would deny them access to benefits, schooling, housing or any possibility of extending their stay. The proposed visa would be modelled on the Tier 5 (youth mobility scheme) visa, which currently allows 18-to-30-year-olds with at least £1,890 in savings from non-E.U. countries such as Australia, Canada, New Zealand, South Korea, and Taiwan to work in the U.K. for up to 24 months. Despite the government’s optimism, the ‘barista visa’ would not only fail to offer adequate solutions to Brexit, it would exacerbate issues in the industry for both employer and employees.

The hospitality industry (including hotels, bars, cafes and restaurants) makes a significant contribution to the UK economy. The industry added an estimated £57 billion to the economy in 2014, roughly 4% of GDP and it employs around 3 million people in the UK.  Since 2011, it has grown by 13%, more than double the employment growth of the economy overall. Yet in the context of this dramatic growth, working conditions remain poor. Average gross earnings for full-time workers in the hotel industry are the lowest in the UK and the industry has the highest incidence of low-paid workers. Added to this is its dubious status as one of the least unionised sector of the economy.

Today, the hospitality industry is experiencing increasing instability and pressure as a result of Brexit. Britain leaving the EU will no doubt have serious and lasting impacts on the UK labour market and workers rights. According to the ONS, E.U. nationals make up 7% (2.2 million) of Britain’s total labour market of 30.3 million. However, some industries will be more affected than others and the hospitality – with over 60,000 workers per annum working in this sector – is likely to be one of those feeling the impact of the referendum result. A report by KPMG indicates that hospitality is the largest business sector employer of EU nationals as a proportion of total workforce. Hotels and restaurants employ the highest percentage of EU migrants with certain roles such as waiters and waitresses (75.3% EU nationals), housekeeping staff and chefs representing a particularly high portion of migrants. Based on current projections, the absence of an annual inflow of new EU migrants into the hospitality industry each year would generate a significant recruitment gap, which would increase over time.

Despite it’s moniker the ‘barista visa’ scheme would fail from a business standpoint .The two-year limit alone is reason enough to anticipate this, since it forecloses incentives for training and retaining workers in an industry that is experiencing serious problems with skill shortages and turnover. According to People 1st, turnover in the hospitality industry is estimated at 20 per cent, while the KPMG survey of BHA members puts the estimate even higher, at 50.2 per cent. This costs the industry approximately £274 million annually. The Financial Times, reported that the ‘barista visa’ would also be open to other sectors that are heavily reliant on low-wage migrant labour, such as social care, agriculture, and construction. While the numbers of migrants for each industry will be restricted with an overall cap, there is no guarantee that there would be enough EU migrants who meet the proposed criteria and aim to work in hospitality. Last year, The Times reported that only 40,000 people applied on the existing Tier 5 youth mobility scheme for all industries. This is 20,000 less than the number of EU migrants who gained employment in the hospitality industry alone. Given the strict criteria of the ‘barista visa’ and the fact that the hospitality industry is expanding rapidly the number of EU migrants is likely to fall woefully short of the needs of employers. Combine this with low wages and the rising anti-migrant rhetoric of mainstream political parties and the situation looks dire indeed.

To attempt to lessen the impact of Brexit, BHA members have petitioned the government to retain EU workers and openness for tourism. They recognise how important migrant labour is for their businesses even if they have not necessarily recognised the rights and economic rights of migrants as a whole. The BHA’s focus on the business case for hospitality ignores the concerns of most of its labour force. Historically, they have opposed legislation designed to protect workers’ interests such as the minimum wage legislation in 1999 and tips legislation in 2009. They have also avoided addressing criticisms from trade unionists about issues in the industry. Last year, Unite regional officer Dave Turnbull offered a different explanation of why the industry cannot recruit and retain the type of workers it needs. He cited a fundamentally “flawed, low cost and exploitative business model” in an industry where “low pay, insecure working, exploitation and institutionalised bullying are rife”[1]. The ‘barista visa’ will only exacerbate these problems. It would further entrench divisions in the labour market and further undermine the collective rights of workers. The scheme denies migrants a social safety net and offers no chance to progress in a career or build a life in the U.K. long-term.

The ‘barista visa’ also fails from a worker’s perspective. Labour Force data shows EU nationals are already concentrated in low-paid and lower-level occupations, especially in the hospitality industry. As of 2016, less than 1% of EU nationals in the hospitality industry were employed in the ‘higher managerial and professional’ occupation grouping. The current state of UK labour law weaves issues of migrant rights into the employment relationship, leaving open the potential for employers to terminate their contract which could effectively leave them exposed to deportation. The ‘barista visa’ ultimately will keep EU migrants in a legally subordinate position to nationals, exacerbating the ‘migrant division of labour’[2] and further undermining all working conditions. The further precarisation of migrant labourers in the hospitality industry will at best allow business owners to continue exploitative practices and at worst, further divide workers.

[1] Unite, 2016. Unite in direct plea to London mayor to tackle exploitative work practices in London’s hotel industry. Press Release. http://www.unitetheunion.org/news/unite-in-direct-plea-to-london-mayor-to-tackle-exploitative-work-practices-in-londons-hotel-industry/

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