Brexit causes staff shortages and pay rises in UK hospitality

I was one of those accused of scaremongering for suggesting that restricting entry to the UK might create labour shortages, and let me say clearly that I take no pleasure in having been proven right.

In May, Reuters, amongst many others, reported that after months of lockdown, British pubs and restaurants faced “a potential staffing crunch”. Ralph Findlay, CEO of pub company Marston’s which runs 1,500 pubs and serves Pedigree, one of my favourite ales, has said:  “There is a labour shortage in the UK, but I don’t think people are worried about coming back because of the virus or because they feel the career is unstable, the issues are more about Brexit and the shortage of EU labour.”

Tim Martin campaigned for Brexit.

Hannah Boland, Consumer Goods and Pharma Correspondent at The Telegraph, wrote a piece in the paper on 1^st June headlined “Wetherspoons boss calls for more EU migration as bars and restaurants tackle staff shortage”. She reported that Tim Martin, the Brexit-backing boss of JD Wetherspoon, has urged Boris Johnson to introduce a visa scheme for EU workers as British pubs and restaurants struggle to recruit staff. Wetherspoon has denied experiencing staffing shortages.

The trade body UKHospitality has estimated that there is a shortfall of about 188,000 workers. Robert Cook, chief executive of TGI Fridays, has pointed to “a perfect storm. There’s the arduous process of hiring from the EU and the change of statuses around the new visa process, which is more cumbersome and less user friendly. Other people are not moving back here because of the situation with Covid.”

Last weekend, the Sunday Times ran a story on the business pages reporting that “Britain is desperately short of workers due to an exodus of European nationals and quirks of the furlough scheme.” Vacancies are outstripping supply nationally and in Faversham where I live. Jame Reed chair of recruitment firm Reed, is reported in the Sunday Times as having said that there had been an 18% increase in average salaries between April and June, 19% in retail and 4% across the UK economy. There are estimates that the number of EU workers who have gone home as high as 500,000. No wonder that retention bonuses are being paid.

Brexit has cast a dark shadow over the UK, but it is good to see the pay of staff in hospitality rising in the UK  – although that will have an inflationary consequence.