• Home
  • Opinion
  • EU workers key to auto industry, but door is in danger of closing

Government policy

EU workers key to auto industry, but door is in danger of closing

Olivia BridgeAccording to the Department for Transport’s official statistics, more goods were imported by road into the UK than exported last year, with 10,000 lorries making their way through Dover Strait per day alone. Up to 86% of cargo exported from the UK went to the Irish Republic (23%), France (22%), Belgium (19%), the Netherlands (12%) and Germany (10%), accounting for 88% of the UK’s imported goods.

UK businesses rely on a smooth supply chain. However, with Brexit just under six months away, concerns are growing as industry experts brace themselves for the worst.

The UK government released its much-awaited White Paper in July. The draft proposed the UK-EU relationship include a free trade area for goods, despite the UK’s decision to back out of the Single Market and Customs Union. It also laid out plans for a “common rulebook for goods” in a bid to inspire “frictionless trade” at the border through a Facilitated Customs Arrangement, seeking to eliminate fears of gridlocked highways and standstill queues.

However, as a no-deal is becoming more likely, the logistics, haulage and automotive industry has deeper concerns than a trade arrangement.

The first pitfall of a no-deal or even bad deal Brexit is a limited pool of talented staff. The Confederation of British Industry (CBI) released its report in August to alleviate recruiters’ anxiety.

One of the CBI’s key industries is the logistics, haulage and warehousing sector. According to the report, EU citizens play a key role in operating in the UK: 14% of LGV drivers (43,000), 22% of forklift truck drivers (19,000) and 25% of warehouse workers (113,000) are all European nationals. The sector is the UK’s fifth largest employer and is worth near £124 billion GVA to the overall economy. For the automotive sector, manufacturers rely on EU citizens in their production lines as they make up 11% of the total workforce. Teams often visit company sites in the EU to launch new cars or share best practice and workers involved in the construction and design of car models take them across the Channel. Clearly, the mobility of staff for the sector is integral to its survival.

Although the UK government has promised to protect current EU nationals in the UK by granting them “Settled Status”, hiring in the future will be a very different story. Recruiters have been struggling to fill their vacancies since the referendum and the sector already faces a shortage of 52,000 LGV drivers. This will only be exacerbated by the emerging demographic challenge in which 63% of HGV drivers are aged 45 or over with 14% of LGV drivers are due to retire in the next five years. An ageing workforce combined with a limited pool of workers post-Brexit will only aggravate the shortages over time, opening up a skills shortage and severe staffing crisis.

Scrap the cap
In the absence of a plan, experts suspect the current immigration system will be used for EU migrants in March 2019. Unsurprisingly, the UK government appeared to have affirmed this view. Theresa May announced just days ago that the UK will not grant ‘preferential treatment’ to Europeans in visa terms. However, this would be a disaster for the UK as the Tier 2 work visa would see many workers completely ineligible. One of the Tier 2 requirements dictates that visa applicants must earn at least £30,000 a year to even be considered. To add fuel to the fire, the UK government has since suggested that this bar will rise to £50,000 – £60,000, severing access to the hard working so-called “lower skilled” migrant pool entirely – many of which are the backbone to the UK’s economic growth and success.

What’s worse is that Tier 2 work visas are capped at 20,700 per year. Migrants from every profession and industry across the UK will then have to compete for a visa before this cap is reached.

After Brexit, migrants won’t splurge on extortionate, non-refundable visa fees (as well as an Immigration Health Surcharge) by staying put in the EU, which, by comparison, is completely free of charge and hassle. Navigating through the immigration visa process  is enough to deter anyone; the rules and regulations constantly change, causing more and more people and businesses to seek professional and legal advice. According to the CBI, many employers are already reluctant to apply for a Sponsor Licence. Although a licence would allow employers to recruit from abroad, smaller and independent businesses rule this out completely since the administrative and financial burden outweighs the benefits. Many simply can’t afford it.

EU workers are critical for the endurance of the logistics and haulage industry all year round, often filling seasonal peaks and troughs. However, time is running out. The UK and EU need to reach an agreement about what its future relationship will really look like in terms of trade, manufacturing and transportation. Businesses are already losing vital workforces. The CBI highlighted each sector that has been snubbed by poor planning in the White Paper, but the government’s post-Brexit immigration plan is the worst scenario of them all.

Tier 2 work visas must allow EU labourers into the UK. The cap must be scrapped. Yet the Home Office has decided to prioritise higher earners over hard-working labourers, manufactures, engineers, drivers, warehouse workers and logistics personnel. Without a complete overhaul of this immigration system, the post-Brexit Britain is looking very bleak indeed.

Olivia Bridge is a specialist content writer and political correspondent for the Immigration Advice Service.