Why Home Office’s visa plans are a ‘nail on the coffin’ to UK hospitality

What is the name of an Italian restaurant which does not serve pizza?

The jokes at the Edinburgh Fringe Festival in 2022 were based on the restaurant Gusto’s.

The Italian restaurant did not serve pizza because there was no one to handle the pala (the long-handled tray that is used to transport the dough into and out of the oven ).

Matt Snell, Gusto’s Chief Executive, says: “The fringe month is our busiest in Edinburgh. But we had to shut down two days per week and could not sell pizza.” “Pizza Chef is a skilled position and we couldn’t find one.” Our sales were only a third of their normal level.

The business lost £750,000  in a year due to closures caused by staff shortages.

Snell’s “game changer” came when he realized that the 14 restaurant chain could take advantage of the government’s visa program for skilled workers. Gusto, provided it could prove that hiring domestically was not possible, could pay the government £3,000 per time to get a license for chefs from abroad on a temporary Visa.

Bravissimo: Staff shortage is solved.

Snell says, “We have hired 30 chefs in the last 18-months and spent more than £200,000 on this project.” It has made the difference between restaurants staying open or closing.

This lifeline, and the pizza it provides, is under threat now from a Conservative Government policy. Many in the hospitality industry feel that this policy puts political calculations above economic realism.

‘s plans to reduce migration by 300,000. per year will see the salary requirement for skilled workers visas increase from £26.200 to £38.700 in April. This salary threshold will also apply to British citizens who want to bring their family to the UK. However, this has been delayed until 2025 due to widespread dismay.

Businesses fear that these policy changes may have a chilling impact on an industry still wracked by Covid, inflation rampant and the cost of living crisis. According to UK Hospitality, the government took its decision without consulting the industry.

The organisation, representing 100,000 hospitality venues, wrote to Home Office and expressed some of its concerns. The new thresholds would make 95% of 8,500 migrant workers recruited in the past year ineligible to receive a visa.

The sector has a high vacancy rate of 8%, which is about 120,000 unfilled roles. Shutting them out would only increase the frenzy to find workers. Job vacancies in the industry are already high, at about 120,000 unfilled positions. The shortfall can reach as high as 10% for the head chef and as high as 21% for the production chefs.

The shortage is even worse in areas like Cumbria which are sparsely populous but have a large tourist population. According to Gillian Haigh of Cumbria Tourism, businesses in the Lake District have become “angry and frustrated” by the government’s plan.

She says, “It is a complete surprise that people would think raising the salary threshold can do anything but exacerbate the severe labour shortage.” What are businesses supposed to do? “Some people say that they will not be able run certain parts of their businesses, or even run the business at all.”

Kate Nicholls from UK Hospitality warns about the risk of losing staff in the hospitality industry to other sectors.There’s a shortage of workers across the economy. “They [migrant workers] fill a critical and important gap.”

Theoretically, this could lead to a situation whereby hospitality businesses would be encouraged to pay higher salaries, which in turn would be earned by employees who are domestically sourced. In reality, even when wages increase, there is a shortage of qualified staff.

Nicholls notes a “demographic timebomb” which exploded in 2020 when the slower birth rate from the period around the millennium caused a decline in the number 18-24-year-olds entering the workforce.

Covid closed catering colleges and made staff look for jobs outside of bars, restaurants, and hotels when they closed.
Snell says that Amazon warehouses were responsible for a large number of the staff lost during the lockdown. They could just walk in and get paid the same. “People didn’t return to the industry.”

The recruitment process was so painful that, after he had advertised for a Birmingham head chef at a highly competitive rate of £37,000 the following morning, he found rival restaurants bidders outbidding his £37,000 for the same person.

Snell says that the economics of the industry were not logical. “There is a point at which you can’t make any money. You have to raise prices, and this leads to inflation. This goes against what the government claims to be trying to achieve.”

Snell doesn’t think he can find skilled workers even if he pays more.

He says the new government migration policy will only worsen the problem. This will lead to a rise in restaurant closures, and a drop in the VAT collected by the exchequer.

He says that the Tories are so caught up in the’stop the boat’ issue, and that immigration is the most important thing, they have decided to tighten the screws without understanding the impact it will have on various industries. “This is another nail in coffin for the hospitality industry.”

Not only businesses, but also people and those who love them could be affected.

Maria and Nasir (whose names are changed to protect their identities) secured their first spouse Visa last year at a cost close to £5,000. This does not include English tests or document translation.

We have both found jobs and settled into a rented apartment. Maria says, “We have never taken money out of the UK. It is a shock to learn that combining our income may only be enough to meet the new requirement.

The ruling prevents us from having a family. If I was to become pregnant and take time off from work, my husband and I would be kicked out of the house.

“I’d have to decide between leaving my husband and everything I worked for to go to another country or living as a sole parent in the UK.”