TSA Response to Post-Brexit Select Committee on Immigration

Textile Services Association (TSA) response to the Home Affairs Select Committee’s ‘Post-Brexit migration policy’ inquiry

About the TSA
1.1   The TSA represents textile rental and services companies covering all forms of linen and workwear. They are a hidden critical supplier to the UK economy, servicing all aspects including manufacturing, all engineering and utilities, high tech manufacturing and pharmaceuticals, R&D, healthcare (especially the NHS), food and drink as well as the hospitality and tourism sector, encompassing hotels and restaurants. Without the services of our member companies, many sectors of the economy are unlikely to be able to function.

1.2   Our members employ 34,400 people across the country and generate £260m for the UK Exchequer. During one week, our members process in excess of a 53 million items a week to keep the UK economy running; this has continued while our members have reduced energy consumption by over 21% in the last three years against Climate Change targets. Further, TSA members directly support sectors that contribute £936 billion GVA to the UK economy every year.

1.3   In 2017 TSA members expressed significant concern about the likely impact of Brexit on the ability to retain and access sufficient numbers of staff. Consequently, the TSA carried out an Employment Trends Survey during July 2017 and updated it in January 2018. Our survey data is presented in this response to the Home Affairs Select Committee and can also be found accompanying this submission.

1.4   As supported by a member of the committee Stuart McDonald MP, the TSA would be delighted to appear before the committee to give oral evidence, to provide a unique insight on our proposals for a post-Brexit migration policy. For more information, please contact christopher@gkstrategy.com or call 02073401150.
What should the Government’s objectives be in drawing up a post Brexit immigration system?

2.1   The Government’s principal objective should be to ensure the UK operates a flexible immigration system to support continued access to labour following our withdrawal from the European Union (EU).

2.2   Our January Employment Trends Survey showed that recruitment for the sector remains very difficult with a large proportion of staff – 38.8% (over 11,000 people) – originating from non-UK European countries (anecdotally these are from Eastern European countries). The ability to recruit has not got easier over the last six months, despite January being a low point in demand for hospitality and July the peak season.

2.3   The objective must therefore be to maintain access to EU workers; a framework that restricts this is highly likely to fuel wage inflation further, driving up prices for public and private sector customers alike. In an extreme case, lack of supply of prospective workers could constrain supply, meaning there are not enough textiles available to keep the NHS and industry operating at maximum capacity. We are already hearing of wage escalation through competition for operatives in plants, which will fuel inflation further. Given TSA members service approximately 80% of NHS trusts across the country, this would be extremely concerning for our health system.
What are the implications of the net migration target?

3.1   The Government has maintained its commitment to the net migration target and signalled immigration rules will be reformed post-Brexit, but arbitrary targets must not be introduced that hurt a businesses ability to recruit. In our sector, a key enabler of various crucial industries and services, there is a natural turnover of staff, so access to new employees must continue.
3.2   The ability to recruit new labour of whichever nationality is of utmost importance to the sector being able to provide a range of businesses with the textile services that are critical to their daily operation. During one week, our members process in excess of a quarter of a billion items to keep the UK economy running.

3.3   With a substantial percentage of businesses across the sector reporting that it is taking longer to fill the increasing number of vacancies, coupled with nearly 40% of the total workforce being EU nationals, there is growing evidence that the uncertainty following Brexit is already causing significant recruitment challenges for our members. It is no longer unusual to have 10% vacancies in sites with 150 to 300 employees.

3.4   This situation would only intensify if restrictions were placed on freedom of movement through a net migration target, with the following significant consequences:
Restrictions on freedom of movement would lead to shortages of labour for our members, leading to wage increases across the board as we compete for employees with other sectors, the outcome of which is significant price inflation.

If TSA members are unable to access migrant labour to fill vacancies, costs for customers will inevitably increase and supply is likely to be constrained. This could lead to increasing costs for all five of the sectors included in the scope of this inquiry; to whom we provide essential protective workwear. In order to compete with other employers especially in the hospitality sector, wages will have to increase leading to increased prices for our members’ services to both businesses and public services such as healthcare.

3.5   It is therefore crucial that our growing sector has access to the required labour and a net migration target does not hamper this ability. We would advise the Government to exclude our sector from net migration targets due to the essential nature of work for services such as the NHS.
How should the UK address skills shortages which are currently met by EU migration?

      3.1   The TSA is committed to improving training in the sector and we have recently received approval for our Textile Care Services Apprenticeship scheme from the Institute of                           Apprenticeships, which already exists as a qualification in Scotland. We are determined to ensure young people know they can have a meaningful and fulfilling career in our sector               and are keen we develop the skills requirements of the economy in local communities across the UK.

3.2   However, this along with increasing automation, is insufficient to meet demand and many of our employers report that new recruits who are UK citizens often turn up for interview but are not seen again despite being offered jobs and some attend for only a few days before not returning. Low local unemployment rates, competition for labour and poor attitudes to work increase the problems of seeking local employees.

3.3   It is also worth noting that many of those from non-UK European countries are diligent and stay for a number of years, with many progressing beyond operator level to become              team leaders, shift and production managers and some have become General (Plant) Managers.

3.4   The TSA is looking at how we can better communicate career opportunities  in textile services. We would urge the Government to consider how they can help us work with schools and colleges to advertise the broad range of opportunities to students across the UK. The accompanying Employment Trends Survey (from July 2017 and January 2018) indicates the continued problems our members have in recruitment at all levels of their business.

3.5   We suggest that from March 2019, if unable to recruit from within the UK over a set period, businesses should be able to seek employees from elsewhere through approved                    agencies and issue work permits similar to the current Tier 2 visa, but at Tier 1 level. Workers from the EU should be allowed to work in the UK on a specific visa for 2 years and, if  supported and endorsed by a registered business after the two years is complete, can remain for a further 3 years. But if they leave the sponsoring company they must return to             their country of origin. After extensive discussions with members, it is clear this would be the most favourable model for businesses in our sector, assuming the bureaucracy wasn’t         onerous.

      3.6   After 5 years workers from the European Union should be considered for residency with the support of the registered company. Amongst our membership, we have seen a large number of European migrants stay with their employers for a number of years and, as already indicated, progress to management level, adding significant value. We would therefore firmly support a system which allowed European migrants to continue to be able to progress within our members’ businesses, through being able to be considered for permanent residency after 5 years.

What steps should the UK take to encourage UK businesses to employ workers already resident in the UK?

      4.1   Recruiting locally is highly unlikely to plug the gap in skills if the supply of non-UK European workers ceases, as members report low local unemployment rates, significant local competition for those available and, more worryingly poor attitudes to work from UK citizens, as described above. The Government should encourage businesses to employ workers  resident in the UK. However, ministers must realise that in many cases there is little more than can done, with low levels of unemployment, access to overseas based workers is critical.

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