Question:

1

What is the extent and nature of labour shortages currently being experienced in the food supply chain?

G’s employs 3,000 seasonal workers for summer harvest and 1400 permanent year-round employees in UK to harvest and supply fresh salad and vegetable to all UK supermarkets. 

The labour shortage challenges impact on availability of seasonal workers, year-round operational employees in factories and packhouses and some specialist skills such as engineers, IT, Drivers. 

Seasonal Workers

The new rules on employing EU citizens (settled and pre-settled), falling value of sterling and the pandemic makes seasonal worker recruitment for the UK a challenge. 

Each year G’s aim for a 75% seasonal worker return rate and for many years this was successfully achieved. However, in 2021 the returner rate fell to 46%, with fewer applications from the traditional recruitment channels of Bulgaria and Romania.  This shortfall was supplemented with new employees via the Seasonal Worker Pilot scheme.  In 2020 all EU seasonal employees were encouraged to apply for pre or settled status, many did, and there was a sizeable pool of experienced employees that were eligible to work in the UK in future.  However, even though all eligible EU returnees were offered jobs their interest in seasonal harvest work in UK had dwindled. 

The Labour Providers attempted to recruit workers from the traditional recruitment channels in Bulgaria and Romania via the SWP scheme but at the start of the campaign the TLS visa offices in Romania and Bulgaria had limited availability for appointments, in part due to Covid restrictions, which made it impossible to recruit workers without settled status in those countries.  This caused a problem in recruiting new workers, in particular PSV qualified drivers eligible to drive in UK.  It is reported that some of the in-country recruitment agencies closed due to lack of income and the workers sought work in other countries such as Germany. 

A direct result for G’s of not being able to recruit experienced employees is:

• Lower productivity
• Increase in labour costs
• The need to recruit more staff.

It is anticipated that G’s will use 1600 SWP visas in 2021. Out of 3050 seasonal workers 1410 were European workers with Settled Status. 

*Full season estimate

G’s relied on the SWP scheme to fully meet the labour requirements in 2021 and expect to do so in future years.  Despite having industry leading accommodation and welfare arrangements and notwithstanding a good return rate of people with settled status there remains a 50% turnover in EU employees which will need to the filled through an increase in SWP visas. Therefore G’s will need an additional c700 SWP visas in 2022 in addition to the 1640 SWP used in 2021.

Agriculture and the wider food industry rely on Migrant workers, until 2021 the majority of those workers came from Bulgaria and Romania.  According to the ONS total employment of EU nationals in the UK fell from 2.4 million in the three months from January to March 2020 to 2.2 million in the three months from April to June 2021. The fall in numbers of EU workers, circa 200,000, is generally from A8 and A2 countries. The countries that have been the main supply of workers for the food sector. 

It is estimated that of the 2.2 million European workers in the UK one fifth of them work in the Food industry.

(Office for National Statistics)

Government continues to argue that the reason for the labour shortage is that employers offer low pay and provide poor conditions.  However, recognition must be given to the average pay rates of £9.90/hr for harvest workers and the provision of leading welfare facilities and arrangements.  Seasonal work is less attractive to many job seekers by its very nature of being temporary and therefore not conducive to securing a rental agreement or mortgage.

G’s competes with other European countries for the same small pool of EU workers.  Germany, Poland Czech Republic and Ireland have all amended their immigration policies to allow non-EU workers to work in their horticulture industry and Germany has extended tax incentives from 70 to 115 tax free days for seasonal workers.  As the international labour market continues to tighten, we expect even more experienced workers to choose to work in these countries who are ever more likely to have sufficient workers to harvest their crops, the UK will not.

Year-Round operational staff

Labour shortages in G’s packhouses and food manufacturing businesses are becoming more apparent as the local labour market continues to tighten.  In G’s packhouses in Cambridgeshire there is a shortage of 30 production operatives c10%.  These are year-round permanent jobs, ideal for local people.  Examples of vacant roles are Machine Operators, Line Leaders, Forklift Truck Drivers, and General Operators.

G’s has a total of 93 permanent vacancies, 84 of those are in processing or operational functions (skilled to no skill level as categorised by the Government), which are areas we traditionally have no difficulty to fill, with a 60% (at least) reduction in the applications being received.  Agency providers have equally struggled to fulfil demand and approaches to new agencies have been declined due to them not taking on new business, which is unheard of in the recruitment industry.

We have continued to recruit locally, and this has had mixed results.  We continue to review our employee value proposition package and we have introduced additional shift patterns to attract candidates that prefer to work part-time on flexi hours. 

Mushroom Growing and Harvest

Mushroom harvest colleagues do not require any formal qualifications, but it is complex, can be difficult to master, and takes approximately 12 weeks to learn.  It has to be performed with a considerable degree of care and application of good judgement.  We, as do others in the industry, recognise that our harvesting colleagues are extremely talented and skilled, but the Points Based Immigration Policy does not recognise or seemingly value this type of expertise.

We responded to the call for evidence from the Migration Advisory Committee (MAC) on the Shortage Occupational List and strongly requested that the ‘on-the-job’ skill level for some of the sectors most difficult to fill roles e.g. Mushroom harvesting are recognised and added to the shortage list, however that request was ignored which has created further labour shortages. 

Over the last 20 years mushroom picking has exclusively been completed by eastern Europeans (historically on a sector-based scheme).  Faced with fierce competition from Polish, Dutch and Irish mushroom imports access to non – UK labour provides a much-needed lifeline to the UK industry.  British labour does not view mushroom picking as a desirable role and certainly not one which people would relocate or travel significant distance for.  Mushroom farms are almost entirely rural based with limited or no access to large populations.

The employee proposition has been enhanced to include flexi shift patterns and has attracted Easter Europeans with Settled Status living locally to apply. 

Unlike a lot of other perishable produce, mushrooms are successfully imported from outside of the UK e.g. from Poland where labour costs are lower and access to labour is permitted from outside EU.  Without access to a reliable and effective workforce there is no doubt that the UK industry will be marginalised by imports, particularly from Poland and from the Republic of Ireland.

Mechanisation of picking has been a focus of the industry particularly in Holland for the last decade with little progress made.  Robotics and picking aids are in their infancy and will almost certainly be at least 5 years away and involve a trade off with yield to produce a pickable crop.

2

What is the outlook for the labour shortage situation in the coming months and years? 

The labour shortage is expected to worsen as EU workers without full settlement rights come to the end of their 5 years under the scheme.  Many of our workers stay less than the 6-month period per year required to upgrade from pre-settled to settled status.  There will also be natural loss as workers improve their language skills, become trained in Health and Safety and Food Safety and gain work experience which enables them to secure roles in other sectors in UK or indeed return to their home countries to focus on family life. 

Without the security of a fit for purpose and adequately sized SWP scheme G’s will experience significant shortages in seasonal workers. We urgently need the reassurance that the inadequacies of the current scheme will be addressed to enable G’s to have sufficient SWP visas and be approved to recruit directly to plan and continue to provide fresh UK fresh, healthy produce to the UK markets.

The UK labour market is unable to fill the gap that the reducing number of EU workers are creating.  From recent experiences of recruiting in the UK (Feed our Nation), we know that the productivity level of UK workers is 60% of comparable workers from Eastern Europe (having spent around £1000 per person providing them with special training for the demands of harvest work) and the percentage of early leavers was 80%, double that of our other workers.  Agriculture by its seasonal nature is not attractive work to UK nationals it is rural based, outdoors, manual, and hard work.  UK nationals aspire to have year-round work and students who are looking for seasonal work prefer to work indoors.

The table below demonstrates the lack of available UK resident workers in the areas our businesses operate.

(Claimant’s information provided by the Job Centres)

According to ONS, for the three months ending August 2021, the highest employment rate in the UK was in the East of England (79.1%) and the lowest was in Northern Ireland (71.1%).  The East of England had a record high employment level, with the rate being the highest since May to July 2019. The UK unemployment rate is estimated at 4.5%, 0.5 percentage points higher than before the pandemic, but 0.4 percentage points lower than the previous quarter.

ONS also reported that the number of job vacancies in June to August 2021 has risen to over 1 million since records began and is now 249,000 above its pre-covid level.  Similarly, vacancies grew by 269,000 (35.2%), with all industry sectors increasing in their number of vacancies”.

         (Office of National Statistics)

UK employment rate is 75.3%, 1.3 percentage points lower than before the coronavirus pandemic (December 2019 to February 2020), but 0.5 percentage points higher than the previous quarter (March to May 2021).

The ONS also reported that the jobs market has continued to recover from the effects of Coronavirus with the number of employees on payroll in September now well exceeding pre-pandemic levels. 

It is estimated that 1 million workers were still furloughed when the scheme came to an end in September 2021 and given that 75% of the these were on “flexible” furlough, i.e., working but on reduced hours, the increase in unemployment figures is likely to be relatively small.  There is even speculation that in the first quarter of 2022 the unemployment statistics will be lower than the pre-pandemic figures.  

We will continue our efforts to recruit from within the UK, but we see this approach as an appropriate recruitment source for our permanent and some specific seasonal roles, i.e., indoors packhouse/factory work.  However, building our seasonal harvest workforce from UK residents is not a viable or sustainable solution, for this we need a reliable recruitment source from outside of the UK.

We appreciate that the number of visas made available via the Seasonal Worker Pilot was increased in 2021, but the industry is projected to need more. The agricultural industry estimates that they have 70,000 seasonal jobs every year, and with a reducing number of available and eligible EU workers, we need the ability to be able to recruit from further afield to fill this gap through an increased SWP scheme.

*Actual SWP for 2021, all other years are based on a 50% return rate.

In 2021 out of 3050 seasonal workers 1410 were Europeans with Settled Status, therefore based on current trajectory G’s will need an additional c700 SWP visas in 2022 in addition to the 1620 SWP used in 2021.

On the basis that G’s employs approximately 4.3% of the estimated c70,000 seasonal workers required, the industry would need in the region of 54,000 SWP to compensate for the reducing numbers of EU workers in 2022.

G’s experienced skill shortages prior to BREXIT and the pandemic for skilled roles such as engineers, food technologists and farm managers with specific knowledge of certain crops but since the beginning of this year the situation has deteriorated, skill shortages have started to “bite” and may hit crisis levels.  Candidate availability is declining at its fastest rate since 2017, without the ability to source the number of skilled and unskilled workers we need, our UK operations will be severely restricted.

If we are to maintain the UK fresh produce production, we need certainty and flexibility.  Certainty that we will have access to sufficient labour from outside of the UK.  Flexibility that we will be able to use our knowledge and contacts in the labour markets to source the non-UK workers we need to guarantee crop availability to our customers. 

G’s has a long history of improving our operational efficiency being pioneers in moving production from packhouses to field, vastly reducing the number of people required.  Over the last 15 years we have focused on replacing manual operations with automated machines, delivering circa 20% improvements in productivity, whilst requiring less labour.  However, for the majority of our crops, we are not in a situation where technology can simply replace all our workforce; we still require a skilled manual workforce, we will have breakthroughs with automation, but we are realist and recognise that it will be10years+ before any significant advances will be made.

We have already evaluated the viability of moving production abroad to our own farms in Poland and Senegal in light of the current recruitment difficulties.  If the situation remains as it is at present this would become a real alternative for G’s.  it should be noted that overseas production will generate a higher carbon footprint.

3

What other issues are affecting the food supply chain?

As with other industries we are now seeing a shortage of drivers.  Particularly those eligible to drive coaches and minibuses that we require to transport our staff to the fields.  The frustration is that we could recruit these drivers from non-EU countries such as the Ukraine; and with in-house testing in the UK ensure, as we do with other drivers, that they are suitable.  Unfortunately, the DVLA do not currently permit these drivers to operate in the UK.

4

What impact will the timetable for introducing physical checks at the border on food and live animal imports from the EU have on the current issues being experienced by the UK food supply chain?

The roll-on, roll-off model behind the movement of fresh produce from the south of Spain to the UK has been designed with a buffer of just 5 hours across the 3 days that the lorries are in transit to ensure the delivery of the product with maximum quality and freshness. Each additional touch point in the journey reduces the likelihood that the produce will be delivered on time. The Border Control Points (BCP) will have a Service Level Agreement that obliges them to complete any inspections within a 4-hour window. Each driver has a 9-hour driving window before they must take a break. If a driver loses 4 hours at a BCP, awaiting inspection, this will limit the distances they can reach within their driving window and create a greater demand for even more drivers to fill the gap. The reality is that the physical checks will further compound the pressures on the supply chain, specifically the availability of hauliers as any delays eats into the drivers’ hours and could lead to more drivers being tied up waiting for customs clearance and inspections rather than moving goods.

5

What measures has the Government taken to alleviate the problems being faced by the food supply chain this year? To what extent have they been successful?

The extension of the SWP scheme to 30,000 visas and the introduction of two new operators.

The increased number of visas enabled G’s to fulfil its commitments to all customers and has therefore been successful. 

However, the two new operators were approved very late in the harvest season and this delay in decision making until May 2021 meant that their first candidates were not available to work until July 2021, due to the time taken to administer each visa. This was far too late for many companies with a summer harvest. By that stage in the season it is imperative that workers are in place, well trained and at peak performance.  In addition, the new recruits’ arrival date (in the UK) encountered expensive travel costs and therefore some of the workers changed their plans and chose elsewhere in Europe.

It is sincerely hoped that this tardy decision does not result in any of the SWP allocation being used.  We also need an early decision so that G’s can access these recruitment channels directly to oversee the recruitment process where in 2021 some workers were mis-sold jobs.

Kick start scheme

G’s applied for 30 positions across a number of locations in operative and administrative roles.  Application levels were very low, resulting in 4 people recruited onto the scheme, 2 still employed at G’s.  No operational roles, i.e., factory floor, harvesting etc. were filled through the kickstart scheme. 

Short fall of HGV drivers

The Government have focused their attention on introducing a number of measures that try to ease the current shortfall of 100,000 HGV drivers that the industry is currently facing. These have included extended driving hours in the UK, legislative changes that allows HGV drivers to fast track a number of the stages to be able to drive an arctic lorry, increasing the number of test slots available by bringing in more moderators and offering visas to 5000 HGV drivers from the EU for 6 months. None of these have had any real impact on the network of hauliers that we work with to date. The European drivers can get a good salary while working on the continent. Many are paid on a per km driven basis and so they are reluctant to have to drive between UK and the continent as they run the risk of being delayed as a result of the borders that have been introduced on the back of Brexit.  

Beyond the initial announcement at the start of the year to offer visas to 30,000 individuals through two approved suppliers, the Government have not done anything additional to date to facilitate the shortfall in labour at the depots, warehouses and packhouses in the UK. These shortfalls also have a significant knock-on effect on the efficiency with which the supply chain operates.

6

Does the Government need to take further steps to support the food supply chain?

The horticulture industry has made clear, over the almost two years that the scheme has been running, its size and scope is grossly inadequate to meet its revised labour needs. 

The Seasonal Worker Pilot is not only restricted in numbers of visas available but also by the number of operators, 4 (from 2021).  The scheme is neither flexible nor big enough for G’s to be confident that we will be able to source all labour needs for 2022 and beyond. 

The steps below would address the inadequacies of the current SWP scheme. 

1. Confirm the Terms and Conditions of a Permanent SWP visa scheme with immediate effect

This decision is already tardy as financial commitments for the 2022 growing season are already being made. Any further prevarication on the terms of the scheme will simply mean that the most talented people will commit to jobs elsewhere in Europe.  

2. Increase the number of visas to replace the reduction of workers with EUSS.

G’s are forecasting a 50% fall in EU workers with settled status resulting in a shortfall of c700 visas in 2021, total required is c 2430.

3. Increase the number of approved operators

G’s have been obliged to select from a small number of under resourced Labour Providers, some of whom have fallen short of the standards we set.  We currently use 2 of the 4 operators and will continue to support them, but in some cases we are aware that some of their policies and procedures are insufficient and could leave the scheme open to serious criticism.   The scheme must be opened up to more reputable operators including direct recruiters.  As a previous SAWS operator, G’s has an exemplary track record of working with the Home Office, which appears to have been disregarded in setting the eligibility criteria for Providers selected to operate the scheme.

4. Extend the length of the visa from 6 to 10 months and reduce elapsed time before return to 2 months. 

The current scheme requires workers to leave the country for 6 months which creates the need for them to find work elsewhere in Europe and reduces the likelihood of trained, experienced workers returning.  In addition, the harvest season is in excess of 6 months. 

5. Include Mushroom harvest workers on the Shortage Occupational List

A review of the Shortage Occupational List to include ‘on-the-job’ skill level for some of the sector’s most difficult to fill roles e.g., Mushroom harvesting to enable access to overseas workers and maintain a competitive landscape with European growers. 

These types of roles do not require any formal qualifications but are complex, can be difficult to master and take approximately 12 weeks to learn.  G’s has a workforce that is highly skilled, the jobs are performed with a considerable degree of care and application of good judgement, and we do not believe that vital skills can be defined by two measures alone: salary level and formal qualifications. This sector needs a visa immigration route to accommodate specific and definable skill set requirements.

6. Introduce an evidence-based labour market review

It is important that local employment conditions are recognised often significantly influenced by the concentration of similar businesses.  To ratify changes to new immigration routes an evidence based “labour market review” could be introduced to provide independent evidence to identify and verify genuine labour shortages.  As soon as these shortages have been substantiated, they would be added to the required number of SWP visas or added to the Shortage Occupation list immediately.

7. Address the inconsistencies in the eligibility for the skilled worker visa (Tier 2).

Bakers and Butchers are on the Shortage Occupation list, whilst many other food sector roles which require similar skill levels and pay) are not.

8. Allow greater flexibility for the use of the Apprenticeship Levy

To address the shortage of skills and to increase the level of training in the food sector allow Apprentice ship Levy funds to be used to train the seasonal workers. 

G’s currently has over 60 permanent employees undertaking apprenticeships across the G’s Group (UK) but despite this we have and will continue to underspend by approximately £15,000 - £20,000 per month.  Ideally, the eligibility criteria would be extended to allow the levy to fund operational training and instruction, trainer’s salary and be available for our seasonal colleagues.  The fund could be put to good use if it were released to support a sector-based training academy which could delivery “general” training, i.e., not apprenticeships

Two key actions that the Government can take:

Cabotage Regulations

In the short term, they need to revise the cabotage regulations so allowing the industry the flexibility 52 weeks of the year to maximise the presence of drivers from Europe in the UK when they are here. As it currently stands a lorry is able to do one additional journey following arrival at their destination in the UK from the continent. There is the potential to maximise the presence of these drivers at peak times but currently this is not legally possible.

Trusted Trader system

Secondly, we need to move to a trusted trader system. The idea behind this would be that a customs declaration does not need to be completed for each lorry that moves across the border but is based on an audit process that confirms all movement of goods is being clearly and suitably documented without the need for lorries being stopped on route.