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Price hike warning if Brexit fuels workforce shortages

By Mark Hayhurst 10 Oct 2017

Without swift action to provide certainty for people from EU working in the UK and a new immigration system fit for the future, consumers could pay the price, according to a new report 'The People Roadmap' published by the British Retail Consortium (BRC).

170,000 people from the EU work directly in retail, which accounts for six per cent of the industry’s UK workforce. In some regions of the country and different parts of the industry this is much higher – over a quarter in warehousing and distribution, for example.

The latest report in the BRC’s A Fair Brexit for Consumers series, illustrates how the lack of certainty about the future status of EU colleagues and the UK’s future relationship with the EU, is driving workforce changes that have the potential to impact consumer choice and experience. The new data reveals:

56 per cent of retailers revealed that their EU colleagues are concerned about their right to remain in the UK.

22 per cent reported that people from the EU have already left their UK workforce.

The retail industry is undergoing a transformation, driven by technology and the changing needs of consumers. This is increasing the need for new and different skills. Therefore, for retailers to continue delivering for consumers now, the Government must recognise the spectrum of skills and experiences that currently contribute to the success of the industry.

The BRC warns that the knock-on impact of a potential reduction in availability of skills and workers, and higher costs of employment could hit consumers. From the service delivered in a store to next day delivery of an online order, from the latest developments for your mobile phone to the prices of what you buy, it is clear that people from the EU play an important and hugely valuable role.

Helen Dickinson OBE, Chief Executive of the BRC said: “The UK’s decision to leave the EU has created uncertainty, not only for business, but for the people from the EU they employ. These are real people with families, livelihoods and homes in this country. It is not right that 16 months after the referendum these people still don’t have the security they need to continue their lives. And from our data it is clear that unless we have the right structures in place to support retailers attract, recruit and retain workers, consumers will soon start to see and feel an impact as they shop.

“First and foremost, the Government must provide certainty for the people from the EU who are already living and working here. The offer of settled status is positive but colleagues need to know the practicalities of acquiring this: how you apply, what it costs and when the cut-off date is.

“Secondly, we recognise that free movement from the EU is coming to an end, and that this is a reset moment. So, at a time when the retail industry is in the midst of a transformation that is changing the very nature of retail jobs, we need a demand-led and simple alternative. Simple for employees and employers alike and based on consumer need not political rhetoric.

“And thirdly, looking at our domestic workforce; the government should work with our industry to invest in the skills and talent for the future. In particular, for the Apprenticeship system to be part of that investment, retailers need additional flexibility to target Levy funds into ongoing high levels of customer service, rather than it being written off as just another tax.”

John Hannett, General Secretary from the Union of Shop, Distributive and Allied Workers (USDAW) said: “Usdaw welcomes the publication of the A Fair Brexit For Consumers report. With this report, the BRC is moving the debate on to try to tackle the real issues behind the headlines. The research in the report illustrates how important the EU migrant workforce is to retail, especially the distribution and logistics that supports the sector.

“I am pleased that the report is recommending that EU migrant workers already working in the retail and distribution sectors should be guaranteed their rights to continue to work and live in the UK. Many of these workers, who are members of Usdaw and other trade unions, have settled and made their homes here and must be allowed to stay and carry on working in the UK.

“The retail and distribution sector is a big employer of labour. We agree with the BRC that there needs to be a focus on developing the skills of the UK workforce to meet the challenges ahead. But, going forward, the sector will continue to need EU workers to come and work in retail, distribution and food manufacturing. We need a debate, based on facts and evidence, as to what that post-Brexit retail sector will look like. I welcome the BRC report as a very positive contribution to that debate.”

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