The UK hospitality industry could be “pushed to the cliff edge” by Brexit unless more is done to safeguard the future of the workforce that keeps it running.
That was the stark warning from British Hospitality Association (BHA) chief executive Ufi Ibrahim earlier this week.
Ibrahim made the comments as part of a panel discussion the Global Restaurant Investment Forum (GRIF) London briefing, which also involved Adrian Cummins, chief executive of the Restaurants Association of Ireland, and Babette Marzheuser-Wood, partner of law firm Dentons. The discussion was chaired by Mark Lewis, publisher of The Caterer.
Ibrahim pulled few punches when asked about the effects of Brexit on the hospitality sector, which according to BHA estimates contains 700,000 workers from the EU, making up around 15% of the total workforce nationwide, with a higher proportion than that in the major cities, in particular in London.
She said: “When you asked the average Brexit voter why they voted Brexit, it was mostly about immigration and there is a fundamental conflict at the moment between politics and economics. If you listen to the rhetoric of the politicians, all the signs point to curbs on what they call unskilled immigration.
“I really cannot underline the severity of the potential implication of that as of 1 January 2019 [the date on which the UK would leave the European Union if Article 50 is invoked on 1 January 2017], the government will stop access to an EU migrant workforce. It will have a devastating effect on our industry. It is serious initially and within two years we think that it will be quite catastrophic.”
Ibrahim indicated that the BHA has already been in conversation with MPs and the government on the issue. When asked what politicians could do to lessen the blow, she called on the government to work with the BHA on a 10-year business plan aimed at making the hospitality sector a more attractive place to work for British nationals, who she suggested were either not trained in sufficient numbers to work in hotels, restaurants and other tourism businesses, or were not inclined to do so because of negative perceptions about working in the industry.
She added: “The government could send out a message right now that the 700,000 EU workers in our industry can stay – that would be a huge help. And they could certainly go so far as to give us a competitive advantage of the sort that Ireland has by cutting VAT. There are so many things that they could do.”
Cummins said that from an Irish perspective, the impact of Brexit could also be far-reaching.
He said: “We were shocked at the result back in Ireland. Just to put it into context the UK is our biggest trading partner in Ireland. 41% of all tourists going to Ireland come from the UK and 41% of all exports of Irish food go to the UK from Ireland.
“In Ireland we have a huge shortage of skilled labour so we are now looking at how we attract that skilled labour from the UK into Ireland. You might not want to hear that but that is what we are doing.
“We saw the drop in Sterling and that is the first obvious effect of Brexit and I think there are difficult times ahead for hospitality in the UK.”
Meanwhile, Babette Marzheuser-Wood warned that companies would have to start preparing for what Brexit would bring but to be careful in doing so. “There is a two-year horizon from where the government triggers Article 50 but in the meantime I think you should not be discriminating against staff from different countries. You cannot just start making them redundant because they are foreign. One has to plan carefully with an eye on countries like Poland where it has been hinted that there could be some sort of bilateral treaty.”
And she indicated that there could potentially be ways in which companies could find a way around the new limitations on immigration that Brexit could entail.
She said: “Franchising might be a way forward for some more on the fast food side of things if you were to make the employee an owner so they would no longer be just serving. You could make your restaurant manager an owner.
“Look at what Domino’s Pizza have done very successfully. Some pizza delivery drivers have become franchisees so thinking a little bit laterally with a different type of staff participation models that might generate some interest.”
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