Managed Migration Customer Services Team

Managed Migration Customer Services Team

PO Box 3468

Sheffield S3 8WA

7 November 2005

‘Making Migration Work for Britain’ Consultation

Background

The Tourism Alliance was established in 2001 with the support of the Secretary of State for Culture, Media and Sport as the voice of the tourism industry and now comprises over 45 Tourism Industry Associations that together represent almost 200,000 business of all sizes throughout the UK (See Appendix 1 for a full list of member organisations). The Tourism Alliance’s mandate is to work with government on issues relevant to the growth and development of tourism and its contribution to the economy. It is, therefore, responding to this consultation in that capacity.

The tourism industry generates £74bn per annum for the UK economy and accounts for 4.5% of GDP. It is, therefore, a major economic driver for the British economy and is particularly important in creating jobs, generating wealth, developing regional economies and supporting services and facilities that local communities depend upon. Overall, the industry now provides 2.1m full-time equivalent (FTE) jobs (equivalent to 7.4% of the total workforce), compared to 0.5m people employed in Agriculture and Fisheries, 1.8m in Transport and Communications and 2.2m in Construction.

More importantly, ONS Labour Force Survey data shows that there are approximately186,000 vacancies in the Distribution, Hotel and Restaurant sector. This equates to 30% of total UK vacancies and supports the industry’s estimate that there is a ‘permanent’ shortfall of approximately 100,000 workers in this sector. The reason for this shortfall is that the tourism and hospitality industry is labour-intensive due to the requirement for high levels of personal service. So, while other industries have suffered falling employment through globalisation and increased mechanisation, employment in the visitor industry has increased by nearly 70% over the last 20 years. This is more than three times the average 20% rise in employment across all sectors of the economy during this period.

Further, the World Tourism Organisation (WTO) forecasts that global tourism will continue to grow at an average of 4.1% per annum over the next five years (twice the forecast rate of growth for the UK economy as a whole), creating the opportunity for Britain’s visitor industry to generate £100bn per annum by 2010. This growth is calculated to generate an estimated 300,000 FTE jobs over the next six years.

Therefore, it is critical to the development and growth of the industry, and the delivery of the associated economic benefits for Britain, that a migration system is developed that takes account of the current vacancy levels and the forecast growth in jobs within the sector.

Comments on Proposed Scheme

The Tourism Alliance is generally supportive of measures that will simplify and clarify the process by which people are able to migrate and work in the UK. A clear, transparent system will help the tourism and hospitality sector plan for the future and provide customers with high quality products and services. To this extent, the proposal to move to a single points-based system is welcomed.

However, the organisation does have a number of concerns regarding the impact that the proposed system will have on the tourism and hospitality sector if it is poorly implemented and administered without due consideration or understanding of the sector’s employment needs.

1. Raising Skills and Productivity within the Sector

It is noted that the main aim of the proposed scheme is to boost the UK’s competitiveness and productivity. This aim is particularly important to the tourism and hospitality sector following a 1999 National Institute of Economic and Social Research study found that the UK sector’s productivity was considerably less than the comparable sectors in France and the USA. This finding was supported by a 2003 study of the visitor industry’s productivity by HM Treasury, which found a clear correlation between skills gaps in the sector and value added per hour worked. While it acknowledged that non-labour factors have an impact on these figures (e.g. the relative age of the hotel industry’s capital stock), it concluded that skills gaps within the hospitality and tourism sector play a central role and that this needed to be addressed.

As a result, the tourism and hospitality industry is dedicated to improving its productivity to enable it to continue to compete effectively in the global tourism market. One of the main mechanisms to fill the skills gaps within the sector is by the industry being able to employ highly skilled workers to fill vacancies.

The large number of vacancies within the sector means that the industry must be free to recruit staff from around the world, and not just from within Europe, if it is to achieve this goal. While the accession states will provide some of the labour shortfall within the sector, the ONS figures clearly indicate that employees from these countries are not be able to provide all the customer service skills that the industry requires.

The industry’s main concern is, therefore, that if the new points-based scheme restricts the ability of employers to access skilled workers to fill the large number of permanent vacancies, this will lower productivity and create a demand for black market workers. This outcome is not in the best interests of the industry, customers or the country.

2.Setting the Tiers at the Right Points Levels

It is difficult to determine the impact of the proposed scheme on the tourism and hospitality sector without knowing exactly how points will be allocated and where the cut-off points will be between the different tiers.

However, there is an assumption in the proposal that those workers with university degrees and high salaries are considered “high skilled” while those without tertiary education and in low pay industries are considered “low skilled”. This approach treats the interpersonal and customer service skills that the tourism and hospitality industry depends upon as merely being ‘personal attributes’ and fails to place a value on them. As such, many workers in the industry, although being highly skilled in their profession, will probably be categorised as Tier 3 workers, making it considerable more difficult to fill the estimated 100,000 ‘permanent’ vacancies.

Unless the points-based system is able to take account of these skills, there is a risk that the proposed approach will be detrimental to the tourism industry. Therefore, the Tourism Alliance would like the Home Office to work with the industry in developing and testing the points system so that its implementation does not produce results that would be detrimental to the industry.

3.Need for the Skills Advisory Board to work closely with People 1st

The consultation document states that for workers to enter the UK from outside the EEA, a case will have to be made to the Skills Advisory Board to have the job category added to a ‘skills shortage list’ (for Tier 2 workers) or to have a quota scheme established (for Tier 3 workers). If the points allocation system is not adjusted to take account of customer service skills, it is certain that the industry will require the equivalent to the old Sector Based Scheme in order to fill vacancies within the industry.

To ensure that making a case for adding certain tourism and hospitality jobs to the skills shortage list or establishing a quota scheme is not onerous, the Tourism Alliance would like a formal linkage to be established between the Skills Advisory Board and the industry’s Sector Skills Council, People 1st. By establishing this link, the People 1st will be able to input professional advice on the tourism and hospitality sector to the Skills Advisory Board, thereby helping streamline the decision-making process so that it is responsive to the needs of the industry.

4.Cost to the Industry

We note that one of the underlying themes of this proposal and, indeed, the Home Office strategy as a whole, is to shift some of the responsibility for immigration control from the Government to businesses. This is being done on the basis that those who benefit from immigration should bare more of the responsibility and cost associated with ensuring that immigrants stay within the terms of their right to work in the country.

While it is accepted that businesses should be responsible to ensuring that their workers are legally entitled to work in the country, any tightening of the current requirements needs to be done in a way that does not add to the administrative burden faced by businesses. Indeed, the points-based immigration scheme needs to support Better Regulation Executive initiatives to reduce the administrative burden that businesses face rather than adding to the burden of complying with regulation.

It must be remembered that the tourism and hospitality sector is highlighted by its seasonality, with large numbers of temporary, transient workers. Indeed, there are some sectors of the industry that report turnover rates of greater than 100% per annum. Therefore, we would be concerned if the requirements placed on businesses were extended beyond the existing responsibility to inform the Home Office, within a suitable period, that a work permit holder has left their job. Certainly, the Tourism Alliance would be opposed to any move that would make businesses responsible for ensuring workers left the country once their employment period ended.

5.0The Need to Protect Workers

The Tourism Alliance is also opposed to the proposal for bonds to be sought from migrants who are not eligible to stay in the UK. Tier 3 workers who come to Britain will generally be doing so in the hope of being able to save money to send home. As such, they will not have the resources to be able to afford a bond, leaving them open to being loaned the funds at usury rates from disreputable people. This will make them vulnerable to being lured into the black market in order to pay-off their loan when they start work in the UK.

The option of withholding a percentage of their wages until they return home is considered a better option. However, it should be noted that many workers will not be paid much more than the minimum wage and that very little could be taken from their wages without them living in poverty and vulnerable to exploitation.

6.0Conclusion

The Tourism Alliance supports simplifying the current immigration system but is concerned that the proposed measures contained in the consultation document may exacerbate the shortfall of skilled workers within the sector rather than reduce the problem.

With vacancies within the sector comprising almost a third of all UK vacancies, it is important that the Home Office works closely with the industry in the development and implementation of the points-based system to ensure that it achieves its aim of improving productivity within the sector rather than exacerbating the black market economy.

Please do not hesitate to contact us if you have any queries or would like further information on any of the issues raised in this submission.

Brigid Simmonds

Chief Executive

President: Sir Digby Jones

Chairman: Brigid Simmonds

Policy Director: Kurt Janson,

Email:

Telephone: 020 7395 8246 Fax: 020 7395 8178 Mobile: 07964428123

Website:

Tourism Alliance: Centre Point, 103 New Oxford Street, London, WC1A 1DU

Appendix 1: Tourism Alliance Members

Full Members
Association for Tourism in Higher Education
Association of British Travel Agents
Association of Leading Visitor Attractions
Association of Licensed Multiple Retailers
BACTA
British Association of Leisure Parks, Piers & Attractions
British Beer & Pub Association
British Educational Travel Association
British Hospitality Association
British Holiday & Home Parks Association
British Institute of Innkeeping
British Resorts Association
Business In Sport and Leisure
Business Tourism Partnership
Confederation of British Industry
Confederation of Passenger Transport UK
Country Land and Business Association
Cumbria Tourist Board
East of England Tourist Board
East Midlands Tourism
English Historic Towns Forum
English UK
European Tour Operators Association
Heart of England Tourist Board
Historic Houses Association
Historic Royal Palaces
Holiday Centres Association
ILAM
National Caravan Council
National Trust
South West Tourism
The Caravan Club
The Tourism Society
Tourism for All
Tourism Management Institute
Tourism South East
UKinbound
Visit London
Visitor Attractions Forum
Yorkshire Tourist Board
Associate Members
Local Government Association
SouthWest RDA
VisitBritain