Responses to the MAC consultation on the impact on the UK labour market of the UK's exit from the European Union. Other manufacturing (SIC 12-33) ...
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Responses to the MAC consultation on the impact on the UK labour market of the UK’s exit from the European Union. Other manufacturing (SIC 12-33) March 2018
Contents Responses available via the MAC website 3 British Fashion Council 4 British Generic Manufacturers Association 14 Cambridge Insitu Limited 17 Polypipe 18 Rolls-Royce 21 The Society of Motor Manufacturers and Traders 43 UK Fashion & Textile Association 51
Responses available via the MAC website 1. British Furniture Federation 2. Caterpillar 3. EEF 4. Johnson & Johnson 5. Mitsubishi Heavy Industries Group 6. Textile Services Association 7. Toyota Motor Manufacturing
British Fashion Council
INTRODUCTION
0.1 The British Fashion Council welcomes the opportunity to provide evidence to the
Migration Advisory Committee (MAC), who have been commissioned by the
Government to advise on the economic and social impacts of the UK’s exit from the
European Union and also how the UK’s immigration system should be aligned with a
modern industrial strategy in relation to all migration both EU/EEA and the rest of the
world.
0.2 The BFC is submitting evidence on behalf of the designer fashion industry, based on
evidence that we hold from research and consultation across the whole industry, from
fashion design houses, through to creatives such as photographers, model agents, and
retailers. This response is linked to the issues raised in the BFC’s broader response to
the Government’s Industrial Strategy Green Paper in April 2017.
0.3 The British Fashion Council (BFC) is a not-for-profit organisation that was established
by the industry to promote the British fashion industry and its designer businesses by
harnessing and sharing collective knowledge, experience and resources of the sector.
Based in London and formed in 1983, the BFC is funded by industry patrons,
commercial sponsors and the Government including the Department for International
Trade, Mayor of London and the European Regional Development Fund.
0.4 As part of the Creative Industries, the fashion industry plays a pivotal role in the UK’s
economy, with the industry as a whole contributing £28bn and 880,000 jobs to the UK,
with its GVA contribution at 4.7% in 2015 compared to the economy’s 2.2%. (Value of
Fashion, Oxford Economics 2015).
0.5 London leads the fashion world, with London Fashion Week considered on a par with
its counterparts in New York, Paris and Milan, positioned as one of the four global
fashion capitals based on Fashion Weeks being the marketplaces for leading designer
fashion businesses. These weeks not only position the UK and London as leaders in
the global fashion economy, they generate millions of pounds of business and media
coverage. An innovative leader, this is a platform to show designer fashion that also
directly influences high street fashion, whose reach and influence spreads to regional
cities throughout the UK. Globally our industry drives tourism (culture and creative
industries, it is the reason 4 out of 5 visitors choose to visit London – GLA economics).
0.6 The nature of a designer fashion business makes it imperative to be global from the
day that it begins trading. British based designer businesses cannot scale on the sales
made in the UK, and therefore export almost immediately. These sales are achieved
all around the world, not just Europe, with markets such as the USA being key. It is
therefore not surprising that a designer fashion business reflects this global outlook
across all areas of the business. Driven by the need to achieve high artistry and
creative pieces, a designer will act global in all elements of the business, from sourcing
the perfect fabric, through to finding the best pattern cutter in the world to work with that
fabric. In developing the look of a collection, or the brand, creativity drives a global
outlook. It is therefore vital that the industry can recruit from a global talent pool.
0.7 The industry is heavily reliant on international trade, especially with Europe. Most of our
exports to non-EU markets, especially USA, Japan and China, are commissioned as a
result of attendance at key international trade shows and fashion weeks around theworld. All aspects of the supply chain depend on ease of trade and people, from the
sourcing of materials and recruiting of highly specialised technicians, to placing orders
with brands and large retailers, through to taking collections and samples to key
international markets. At present, the EU is the UK’s largest export market for textiles
and apparel and is a key source of business talent and production skills for many
fashion businesses, which understandably raises the need to address the opportunities
and challenges of Brexit within the industry’s response to the Industrial Strategy. The
BFC prioritises its international outreach and promotion strategy based on feedback
through its annual Designer Business Survey.
0.8 The UK is a hub for creative talent operating in a global market and on an international
stage, this is especially true in the fashion industry. Talent is key in fashion, not just
the central design talent but also interns, skilled workers and business leaders. In the
2017 BFC Designer Survey, when questioned on the issues arising from Brexit issues,
access to global talent was ranked as the main issue, with 80% designer businesses
concerned about the impact that Brexit will have on this.
0.9 The BFC is making this submission alongside that of UK Fashion & Textiles, the two
organisations work closely together to ensure clear communication and common
purposes as both organisations represent different elements of the fashion industry.
The BFC has also provided information to other responses including that of the
Creative Industries Federation.
0.10 Whilst we recognise the need to collect detail and evidence to ensure that decisions
and new systems meet the UK’s needs, the BFC asks that Government continue to
communicate clearly and regularly with industry to allow businesses to plan:
uncertainty is the biggest constraint to growth. We are already seeing evidence of the
impact that it is having on business.
RESPONSE TO CALL FOR EVIDENCE
EEA Migration Trends
1. Please provide evidence on the characteristics (e.g. types of jobs migrants perform;
skills levels, etc) of EEA migrants in your particular sector/local area/region. How
do these differ from UK workers? And from non-EEA workers?
1.1 There are three areas in which non-UK nationals are important to the industry:
1. Fashion Design Talent: The UK’s reputation in fashion is built upon the
excellence that graduates from our world-renowned fashion colleges, with
graduates of all nationalities going on to either establish their own
businesses in the UK or be employed at the helm of some of the most
prestigious brands in the UK. Similarly, we have a roster of British talent at
the helm of international brands: John Galliano at Maison Margiela, Jonathan
Saunders at Diane von Furstenberg, Stuart Vevers at Coach and JW
Anderson at Loewe, Kim Jones at Louis Vuitton Men’s, to name but a few.
2. Global Creatives: Our ecosystem as a sector is built on the movement of
people e.g. models, photographers, hair stylists, make-up artists, set
designers and production managers, that travel all around the world to dojobs. Jobs are booked at short notice, but more importantly people come to
the UK without a job being booked but need to be in the country to do
castings/interview to get work. For example in modelling where models take
part in castings (interviews) just days before the start of LFW, and so it is
impossible to enter under current rest of the world visa arrangements. The
scale of this problem is sizeable as similar problems arise across the industry
where creatives from outside the EU are being sought for jobs such as
photoshoots, but due to visa regulations and speed in some countries, jobs
are being moved out of the UK, for example photoshoots will now be held in
other countries rather than in the UK.
3. Highly skilled workers: The creation of high-end fashion requires very
specialist skills in manufacturing areas such as seamstresses, pattern-
cutters and areas such as embroidery. Fashion designers will go to great
lengths to find the best talent and highest craftsmanship. Evidence shows
that EEA migrants are key to the fashion manufacturing sector, with workers
more highly skilled than their UK colleagues, but more often filling roles that
UK workers are not qualified to fill. With the growth in “made in Britain” and
the growing need from fashion designers to sample and manufacture locally,
it is estimated that an additional 20,000 jobs could be created ("Repatriation
of UK textiles manufacture", The Alliance Project Team). Without access to
the highly skilled workers from the EEA, it will not be possible for the UK to
fully exploit this opportunity.
1.2 From the BFC Designer Survey 2017:
“Fashion is a global business, it’s not British, or French, or German. And the
talent is Global, and we need to access that talent. The diversity and
international nature of the talent pool is essential to the success of the
industry. In my headquarters here, we have 52 nationalities.”
“Fashion is an international business, my work room looks like the United
Nations, it is extremely important, and we take talent from all over the world.
So the fact that immigration policy works is extremely important to us.”
1.3 The table below, taken from the BFC Designer Survey 2017, shows the
percentage of employees are from the EU:1.4 Ahead of submitting this response the BFC did a short survey on the
Employment of EU nationals and Brexit and found that 87.5% of respondents
employed EEA nationals, with 70% of respondents having between 1% and
50% of their workforce EEA nationals.
1.5 The BFC High-end & Designer Manufacturing report (March 2015) found that:
Labour Force: UK has a specific set of challenges based around skills and
retention of talent. Manufacturers consistently stressed the lack of skilled labour
within the UK and their reliance upon a first generation immigrant workforce that
was mainly drawn from Easter Europe and India.
“In a couple of years three to four of our workforce will be retiring – that’s around
25%”
The report estimates that growth in manufacturing could result in 1,700
additional jobs. However, with an ageing workforce, and issues with
international workers, there is considerable concern that there won’t be enough
skilled workers to fill this opportunity.
2. To what extent are EEA migrants seasonal; part-time; agency-workers; temporary;
short-term assignments; intra-company transfers; self-employed? What information
do you have on their skill levels? To what extent do these differ from UK workers
and non-EEA workers?
2.1 The fashion industry, like other creative industries, has a high number of
freelancers, with an estimated 18% of the workforce self-employed (Creative
Skillset Figures based on ONS Labour Force Survey Apr 2012 - Mar 2013). We
have no evidence to show that EEA migrants represent more of the freelancers
than UK nationals.
2.2 Within the “global creatives” there are particularly high rates of freelance. Here
it is worth highlighting the issues being faced by models and their agents around
immigration. Models are all self-employed and using the 4 largest UK model
agents as a proxy to gauge the international profile of the models represented,
40% are British, 30% EEA and 30% non-EEA. The model industry uses the Tier
5 system to enter the UK. But it is fundamentally different to other sectors which
use Tier 5 as most sports people, dancers, musicians enter the UK with a
specific invitation to work from a company. Models however arrive speculativelyand need to attend castings before clients decide who they will use in shows. A
model may attend as many 60 casting in the days leading up to London Fashion
Week, which may only yield 1 or 2 jobs. No job will have been pre-committed
until the model is seen. Therefore the current Tier 5 system does not work for
the modelling industry. And if this is then extended to EEA nationals then there
would be severe implications for the model industry and the broader fashion
industry and on the UK’s global competitive position attracting leading talent in
this field.
2.3 The BFC Survey on the Employment of EU nationals and Brexit (2017) shows
that more than half of the businesses surveyed said that the EU nationals that
they employed were staff and not freelance.
2.4 The fashion industry has two “main seasons” per year, driven by the circuit of
international shows. Within fashion houses employment, particularly of
freelancers, spikes in the weeks leading up to show season, February and
September for womenswear, and January and June for menswear.
3. Are there any relevant sources of evidence, beyond the usual range of official
statistics, that would allow the MAC to get a more detailed view of the current
patterns of EEA migration, especially over the last year?
4. Have the patterns of EEA migration changed over time? What evidence do you
have showing your employment of EEA migrants since 2000? And after the Brexit
referendum? Are these trends different for UK workers and non-EEA workers?
4.1 Anecdotally we believe that he number of EEA migrants being used across the
entire fashion industry has risen since 2000, particularly in manufacturing, as an
aging workforce and lack of skills means that roles are not being filled. There
are difficulties in evidencing specifically how this relations to EEA workers as we
would not have separated EEA worker data from UK worker data.
4.2 According to evidence collected in the BFC Survey on the Employment of EU
nationals and Brexit (2017) only 18.4% of respondents have said that there has
been an impact on employment since Brexit, citing return to home country due
to uncertainty around Brexit as the reasons. However, nearly all stated a
concern that there’s been a shift in sentiment and therefore they are expecting
large numbers to leave if the uncertainty around EEA nationals rights is not
changed.
5. Have you conducted any analysis on the future trends of EEA migration, in
particular in the absence of immigration controls?
6. Have you made any assessment of the impact of a possible reduction in the
availability of EEA migrants (whether occurring naturally or though policy) as part of
your workforce? What impact would a reduction in EEA migration have on your
sector/local area/region? How will your business/sector/area/region cope? Would
the impacts be different if reductions in migration took place amongst non-EEA
migrants? Have you made any contingency plans?
6.1 As demonstrated in our response in Section 1.1, significant numbers on non-UK
nationals are used in the fashion industry and the resulting impact would be
devastating for the UK fashion industry. Access to, and the use of, both a UK
based and an international labour force is absolutely fundamental to the success
of the designer fashion industry.6.2 Delays in giving EEA nationals assurances over their right to work and right to
stay is destabilising businesses and results in losing key talent (notably
international fashion design graduates) to competitors in the EU and other
markets.
6.3 Because fashion is international in areas such as design talent and creatives the
impacts would be the same if reductions took place amongst non-EEA migrants.
However in areas where EEA migrants represent a high proportion of the
workforce, such as manufacturing, the impact would be severe. The restriction
to the free movement of creatives would pose a serious risk to events such as
London Fashion Week.
6.4 Skills gaps have been identified in the fashion industry in the following areas:
supervisors and production management; technicians and fabric technologists;
and in apparel and sewn products including pattern cutters, graders, knitwear
linkers, hand-tailors, sewers and weavers (Sector Skills Assessment for the
Fashion and Textiles Sector in the UK, Creative Skillset, 2011). While the latest
data is from 2011, we know from our work in high-end manufacturing
anecdotally that this problem is growing. The problem is on a growth trajectory,
with 60% of workers in the fashion sector over the age of 40 and potential to be
exacerbated further with issues from Brexit.
6.5 The BFC Designer Survey 2017 found that the hardest positions to recruit for in
order of mentions:
• Sales and commercial staff
• Skilled workers (e.g. pattern cutters)
• Digital and technical positions and finance and operations
6.6 More broadly, there are also specific skills shortages in the UK, around
manufacturing. The UK Employer Skills Survey 2011 showed that Fashion and
Textiles employers have reported skills gaps in their workforce, which is having
a major impact on their businesses performance, including increased world for
other staff, increase in operating costs, difficulties introducing new working
practices and losing business or orders to competitors/overseas. The BFC
Survey on the Employment of EU nationals and Brexit (2017) showed that
production area was the biggest area of concern. Production roles and
technical workers were cited as the hardest to replace.
6.7 With the growth in “made in Britain” and the growing need from fashion
designers to sample and manufacture locally (improve productivity by being part
of the process, overseeing quality etc), there is huge potential to “reshore”
manufacturing and create jobs, an estimated 20,000 jobs could be created
according to "Repatriation of UK textiles manufacture", The Alliance Project
Team. The High-end & Designer Manufacturing Report (Oxford Economics &
Glasgow Caledonian University 2015) suggests a 65% increase in demand for
UK made high-end product over the next five years, which would add an
additional turnover of £400million and support an additional 1,700 jobs across
the UK. Without access to the highly skilled workers from the EEA, it will not be
possible for the UK to fully exploit this opportunity.
6.8 However high end requires high skills, and the industry currently has an ageing
workforce, 48% of the Fashion and Textiles workforce is over 45 years of age
(Creative Skillset Figures based on ONS Labour Force Survey Apr 2012 - Mar
2013, also highlighted in “Repatriation of UK textiles manufacture", The Alliance
Project Team). The industry is struggling to attract a younger workforce into
these roles. It should be noted that attracting a global workforce into these roles
not only will enable the industry to exploit these opportunities, but will also
enable the training of the next generation.6.9 Business skills that are specialist to fashion are also a gap, in particular around
sales and merchandising. In the BFC Survey on the Employment of EU
nationals and Brexit (2017) respondents cited multilinguals, customer service,
business development roles (understanding market and cultural differences),
merchandising, and visual merchandising as key areas of concern. As
businesses move to digital business models there are also shortages in coders
and data analysts; these skills aren’t readily available in the volume required in
the UK.
6.10 In the BFC Survey on the Employment of EU nationals and Brexit (2017)
there was a specific continued concern around models, both EEA and
international.
6.11 The BFC Survey on the Employment of EU nationals and Brexit (2017)
highlighted impacts that there would be if our industry could not access EU
workers including loss of talent and finding the best for the job, language skills
and cultural knowledge, the lack of UK workers attracted to work in areas of the
industry that have skills gaps (e.g. production), loss of business knowledge that
would take time to re-place/re-train, reduction in talent pool available, impact on
quality of production and concern that salary costs will go up. Contingencies
that are being considered include outsourcing to EU agencies (resulting in
higher costs), relocation of company or parts of operations to other countries,
several mentioned that the company would close.
6.12 The Government needs to urgently remove the uncertainty around the status
of those EU nationals that currently live and work in the UK. The uncertainty is
already impacting the workforce, as evidenced in the BFC Survey on the
Employment of EU Nationals and Brexit (2017), it also impacts the ability to
create strong contingency plans.
Recruitment Practices, Training & Skills
7. Please provide evidence on the methods of recruitment used to employ EEA
migrants. Do these methods differ from those used to employ UK and non-EEA
workers? What impact does this have on UK workers? Have these methods
changed following the Brexit referendum?
7.1 Recruitment in the industry is based around talent, no matter what the role
designers seek out “the best”. There are no differences in the methods used to
recruit UK, EEA or non-EEA workers. BFC Survey on the Employment of EU
Nationals and Brexit (2017) found that there was no evidence of a difference in
recruitment methods.
8. Do recruitment practices differ by skill-type and occupation?
9. What are the advantages and disadvantages of employing EEA workers? Have
these changed following the Brexit referendum result?
10. To what extent has EEA and non-EEA migration affected the skills and training of
the UK workers?
10.1 EEA and non-EEA migration has not affected the skills and training of UK
workers. Firstly it should be highlighted that the issues relating to the shortage
of skills are much more systemic and start from primary education. Skillseducation in terms of craft and making has gone from the education system.
Anecdotal evidence from the teachers that we work with, at primary level,
suggests that even the most basic of craft skills using fine motor skills (such as
using scissors) is not developed at younger ages. The re-introduction of basic
craft skills in the curriculum would assist careers pathways into skilled
employment and is a key part of addressing the skills shortage that the fashion
industry is facing. There is also still a large skills gap in the sector, even with
the roles being filled by EEA workers.
10.2 BFC Survey on the Employment of EU nationals and Brexit (2017) found that
almost universally respondents felt that the use of EEA workers has either no
impact or a positive impact on the UK workers, stating that it has helped the
workplace become more varied, creates new creative skills, helps to train junior
staff as well as develop the wider team to bring staff up to standard and helped
the team understand the culture of customers in EEA markets.
10.3 The BFC High-end Manufacturing report found that some of the
manufacturers interviewed invested in skills and training, others had tried the
existing apprenticeship framework, but found it challenging with no guarantee
the training would result in a worker staying within the factory. An ageing
workforce and the inability to attract domestic talent into jobs were cited as key
problems.
11. How involved are the universities and training providers in ensuring that the UK
workforce has the skills needed to fill key roles/roles in high demand in your sector?
Do you have plans to increase this involvement in the future?
11.1 Since Government’s withdrawal of funding for the Sector Skills Councils, the
BFC has worked with UK Fashion & Textiles, who have played a pivotal role in
supporting the co-ordination of skills activities across our industries. Such co-
ordinated action is vital in an industry that predominantly comprises of SMEs to
ensure that educators are looking to fill key roles. We would ask that
Government continue to help with collecting further data on the skills issues and
shortages blocking the growth of our industry.
11.2 The BFC has a Colleges Council, which is a network of the 33 top fashion
design courses across the UK, with whom we liaise regularly to discuss widely
the issues facing education and skills for the sector.
11.3 Action is needed to improve technical education and to address the
shortages that are likely to impede the growth of our industry, and become
particularly acute in light of Brexit. The BFC welcomes the fact that Government
has recognised that these need to be employer led so that they best meet the
needs of industry. The fashion industry would benefit not only from broader
pathways into the industry, but also communicating the broader range of job
roles that the industry has beyond designers, such as technical and business
roles.
11.4 Feedback from the employers in our industry have highlighted that often
universities and training providers focus too much on courses that will yield high
numbers of students (namely fashion design), at the expense of offering courses
that fill key roles. In addition, our employers have concerns that the courses
offered often lack quality and are not up to date with industry/global
developments.
11.5 The BFC has acted as secretariat to support an employer group with the
development of a new apprenticeship standard, Fashion Studio Assistant. We
welcome Government’s continued work on apprenticeships as an alternative
pathway into our industries, however would ask that recognition is given to thoseindustries that are dominated by micro and SME businesses that there are
challenges in not only developing new apprenticeship standards, but also in
these companies having the capacity to take on apprentices and embrace them
fully into their businesses. Support not only through financial incentives (that
currently exist) but advice, perhaps through the Institute of Apprenticeships,
would enable the industry to increase the uptake.
12. How well aware are you of current UK migration policies for non-EEA migrants? If
new immigration policies restrict the numbers of low-skilled migrants who can come
to work in the UK, which forms of migration into low-skilled work should be
prioritised? For example, the current shortage occupation list applies to high skilled
occupations; do you think this should be expanded to cover lower skill levels?
12.1 The BFC, representing the industry, is broadly very aware of the current UK
migration policies for non-EEA migrants. The challenges come for the wider
industry, which is made up of many small sized businesses, who simply do not
have the resources to familiarise themselves with these policies and the
practicalities necessary to adhere to them.
12.2 The BFC Survey on the Employment of EU Nationals and Brexit (2017)
found a broad range of understanding of the UK migration policies, with an even
distribution of knowledge from none to fully aware. Those that were aware of
the systems were very critical, citing the UK immigration system as “shambolic”,
and that the Home Office can be damaging to business and its staff as it is
“overstretched, underfunded and not fit for purpose”.
12.3 Companies find it hard hiring employees outside the EU, as paperwork is
complicated and costly and the minimum salary required, e.g. in China – takes 6
months plus, lawyer fees, therefore pay over the odds of person’s worth.
12.4 The current shortage occupation list method assesses the level of skill in a
role to academic achievement and/or salary. The issue that the fashion industry
has is that the skills gaps described in section 6 of this response are roles that
do not require formal academic achievement and aren’t highly paid. Therefore,
the Government is asked to consider new roles for the Shortage Occupation
List, e.g. pattern cutters, embroiderers or high-end machinists. Consider the
introduction of the Tier 3 visa to cover “low skilled migrants” despite the skills
being unavailable or in short supply in the UK.
12.5 Whilst designers have degrees, the roles around the designer that are critical
to the business, particularly in creating the garments, are formed from
experience garnered on the job (26% of Fashion & Textile workers are qualified
to NQF level 4 or above, compared to a national percentage of 37%, based on
ONS Labour Force Survey, March 2013). We would therefore ask that “industry
experience” be reflected as a factor. Like so many of the other creative and
cultural industries, these roles also have a reliance on “innate talent”, that
special something that cannot be taught, that is part of the creative process
between a designer and their team.
12.6 A point must also be made about using salaries as one of the selection
criteria. As described above, the majority of the posts that would be affected by
these changes are not at degree level, and therefore do not command high
salaries. The salary threshold proposed would be too high, the net result would
be that production would remain “off-shore”, having a negative effect on the
balance of trade, and a resulting impact on the industry.
12.7 Finally, in an industry dominated by SMEs, and where many employees are
freelancers (with 18% of the workforce self-employed Creative Skillset Figures
based on ONS Labour Force Survey Apr 2012 - Mar 2013), implementation of
more complex visa rules will negatively impact the growth of the industry.12.8 The BFC would therefore welcome a review of the current shortage
occupation list to cover “lower” skills levels, through looking at other criteria as
discussed above.
Economic, Social and Fiscal Impacts
13. What are the economic, social and fiscal costs and benefits of EEA migration to the
UK economy? What are the impacts of EEA migrants on the labour market, prices,
public services, net fiscal impacts (e.g. taxes paid by migrants; benefits they
receive), productivity, investment, innovation and general competitiveness of UK
industry
14. Do these differ from the impact of non-EEA migrants?
15. Do these impacts differ at national, regional or local level?
16. Do these impacts vary by sector and occupation?
17. Do these impacts vary by skill level (high-skilled, medium skilled, and low-skilled
workers?)British Generic Manufacturers Association
The British Generic Manufacturers Association (BGMA) represents the interests of UK-
based manufacturers and suppliers of generic and biosimilar medicines and promotes the
development and understanding of the generic and biosimilar medicines industry in the
UK. Our 30 members account for around 90% of the UK generic medicines market by
volume. Generic medicines are launched when the patent on a medicine produced by a
research-based pharmaceutical (or originator) company expires. When a patent expires,
generic manufacturers can produce equivalent versions that contain the same active
ingredient. Generic medicines are tested by the medicines regulator (MHRA) to the same
standards of safety and efficacy as the originator product. The high number of generic
manufacturers helps ensure that generic medicine prices are much less than that of the
originator version under patent protection. Based on NHS Digital data, competition from
generic medicines saved the NHS in England over £13.5 billion in primary care in 2016
(with a similar figure saved in 2015). The average reimbursement cost to the NHS of a
generic medicine was £4.17, whilst the average cost of a branded medicine was £20.63.
Had all scrips been reimbursed at the latter price, the drugs bill would have been £13.5bn
higher. The average generic price of £4.17 not only covers the cost of the medicine, but
also the payment to pharmacy for dispensing the drug.
Competition from generic medicines also stimulates the research-based pharmaceutical
industry to develop new medicines (as generic medicines capture the bulk of the market
after patent expiry). Furthermore, in keeping medicines affordable for the Department of
Health, this allows further investment in other healthcare priorities, and promotes
innovation in the development of new medicines.
Summary
The BGMA, representing manufacturers and suppliers of generic medicines in the UK,
welcomes the Migration Advisory Committee’s (MAC) preliminary analysis of the UK
labour market, and call for evidence to support the Committee’s advise to Government on
the economic and social impacts of the UK’s exit from the European Union.
Following a survey of 27 BGMA members – including a representative range of large
multinational manufacturers, national retailers, and small/medium suppliers based
throughout the UK – it is apparent that the UK generics industry primarily employs UK
citizens, but must occasionally recruit long term employees with specialised skills and
qualifications from outside of the UK – particularly medical researchers, pharmacovigilance
and qualified persons. For recruiting the from the EEA, the small number of expert staff
necessary to the UK generics industry, members believe that the current Visa system of
Tier 2 company transfers and Exceptional Talent schemes works effectively.
While the majority of member companies have not experienced a change in recruitment
levels from the EEA since the UK voted to Exit the European Union in June 2016, severalvoiced concerns that the continuing lack of clarity on the future rights of EU citizens in the UK will increase challenges of filling these roles. First-movers within the industry are already introducing measures to plug anticipated gaps in specialised recruitment, including internal training programmes to upskill current employees, enhanced specialised graduate recruitment, and new apprenticeship schemes. Ultimately, if unable to fulfil a function with UK candidates, a majority of the industry would consider outsourcing or relocating a function outside of the UK. EEA Migration Trends According to our Survey of BGMA members, an average of 12% of UK Generics industry employees are from non-UK EEA origins. Of this small percentage, EEA recruits are typically highly skilled, plugging particular specialist skills gaps in the UK generics industry recruitment. Six surveyed companies noted that they have recruited EEA workers to providing specialised graduate-level skills in medical research, pharmacovigilance and qualified persons’ roles. One member company required EEA workers in sales development roles. The specialised, skilled nature of roles suggests EEA recruits are employed on long term, permanent contracts within the UK generics industry, rather than short-term migrant workers. 66% (12) of respondents surveyed were satisfied with the current EEA recruitment mechanisms, with the majority of respondents – 66% (12) – utilising Tier 2 VISA system or company transfer schemes to recruit EEA employees. There is evidence of UK generics industry recruitment trends shifting. 72% (13) of surveyed companies have recruited non-UK EEA and non-EU employees in the past 2 years, while a further 11% (2) organisations had recruited non-UK EEA employees. However, while 54% (7) of respondents have not noticed a change in the ease of attracting non-UK EEA talent since June 2016, 31% (4) had noticed increased difficulty recruiting since the UK’s referendum upon membership of the EU. Recruitment Practices, Training and Skills As the roles currently fulfilled by EEA workers within the UK generics industry are typically highly specialised and a large minority of the industry are already anticipating a reduction in EEA recruitment, some BGMA members are already taking action to plug the perceived upcoming skills gap. All members who responded to the survey noted that they intend to maintain their international staff rotation practices, continuing to benefit from the skills of their international networks. Additionally, some first movers within the industry are adopting additional measures to reinforce their UK skills base and recruitment pipeline. 53% (8) respondents were enhancing their internal skills development programmes; 20% (3) are developing specialised internship and graduate recruitment programmes; while 20% (3) were exploring options for dedicated apprenticeship schemes.
However, 33% (5) respondents were not planning any action or asserted that they did not
perceive any future recruitment challenges.
Ultimately, if unable to fulfil a role, skillset or capacity with UK workers, 46% (7) of
respondents would consider outsourcing or relocating the function outside of the UK.
Economic, Social and Fiscal Impacts
While the number of EEA workers in the UK generics industry is small, due to their
specialised roles, they typically make a substantial contribution to the UK industry. EEA
workers provide specialised medical and pharmacy knowledge, supporting research and
quality control of medications in the UK market. While first movers within the UK generics
industry are already taking action to plug any anticipated skills shortages, we recognise that
these specialised workers will not be easily replaced.
Additionally, EEA workers’ contribution should be considered as part of the larger social and
economic contribution made by the UK generic industry, supporting the vital work of the
NHS.
Simply put; while the UK generics industry would not currently operate without specialist
EEA workers, the NHS would not function economically without the affordable medicines
provided by the UK generics industry. Therefore the NHS would not function without
specialist EEA workers in UK generics.
Friday, 27 October 2017Cambridge Insitu Limited We are an international company trading all over the world and have been doing so since 1971. We make and also use as a service, pressuremeters. These are cylindrical instruments which are put down boreholes in the ground. They measure various properties of the ground considered as an engineering material on which or in which to put structures. Typical projects with which we have been concerned are CrossRail, the new Queensferry Bridge and its approach roads, the second road crossing of the river Severn and many others in all parts of the world, for example Bangladesh, Australia, Tanzania, Malaysia, China, Brunei and so on. We are a high-tech company in that it is essential that people who work for us understand about pressuremeters not only to be able to use them but also to be able to explain their benefits to observers. Our employees have, mostly, to be degree-level qualified. We have been much involved with several universities, most notably Cambridge, Imperial and Bristol. Their PhD students come from all over the world and have been much supported by us over the years. Typical will be those from Malaysia, from China, from Ireland, from Trinidad and so on. Understandably, the principal qualification of them all has been intelligence. Several of these students have been seriously considered as our employees. We would not wish any change to the relationship between UK and EU to upset or make such arrangements more difficult.
Polypipe
Polypipe is one of Europe's largest manufacturers of piping systems, water management
solutions and energy-efficient ventilation systems, delivering engineered solutions that
respond to a rapidly changing environment.
Polypipe has an established market position, spanning the residential, commercial, civils
and infrastructure, and public non-housing sectors in the UK and selected markets across
the globe. Through constant innovation and focused research and development, Polypipe
is uniquely positioned to offer solutions that help deal with the pressures placed on urban
environments and natural resources and both labour availability and the breadth of skills
remain a crucial element to maintaining our strategic focus.
Fig 1. Post Brexit Review
(Polypipe UK) Heads EU % Current EU Migrant Landscape in
Terrain – Kent 291 20 6.9 Polypipe
Ulster – Northern Ireland 109 4 3.7
Domus - Doncaster 43 1 2.3 EU Migrant numbers remain steady
Surestop - Birmingham 19 5 26.3 within Polypipe with no evidence of an
Robimatic - Doncaster 58 5 8.6 exodus of workers leaving the country
Building Products - either immediately post referendum or
Doncaster 972 181 18.6 within the interim period.
Civils –
Loughbrough/Horncastle 413 41 9.9
Nuaire – Wales, EU Migrant numbers can swell due to
Caerphilly 521 15 2.9 seasonal variation by circa 100
individuals when agency worker
Total 2426 272 11.2 numbers are added to the employed
numbers stated in (Fig 1). It is therefore
common for Polypipe to be providing work to circa 400 EU migrant workers at any one time.
Agency workers are largely considered unskilled roles.
85% of Polypipe EU migrant workers are considered unskilled and largely work within
manufacturing undertaking basic operative/assembly type roles. The remaining 15% are
considered skilled, sitting in either development/technical/clerical/supervisory type roles.
Around 6% of this number have been promoted to more senior positions or supervisory/team
leader type roles.
All roles have had some form of training and/or development and therefore investment has
been placed in all our workers, no matter what nationality.
Polypipe Challenges
The number of EU Migrant workers currently available and/or employed in Polypipe is critical
to the ongoing production/assembly capabilities of the manufacturing sites. It is evidentwhen considering today’s unemployment rate (the lowest since comparable records began
in 1971) that the number of individuals available to work, who evidence either the willingness
or the appropriate work ethic/capabilities, is greatly limited at this time, therefore the number
of EU Migrants available is crucial in fulfilling a UK productivity labour gap.
It is therefore imperative for the government to ensure regulations and agreements are
passed for workers who are currently available in the UK, to remain available in the UK.
On this basis it is crucial for Polypipe and its workers to understand the exact position when
it comes to ‘settled status’, and more so, as to how much this registration process is going
to cost each individual.
From our experience most of our EU workers are already settled with families local to our
businesses, so registration would need to remain affordable to a family of e.g. 4 individuals,
who are largely living on the national living wage rate.
The period of time our EU Migrants have been settled in the UK covers a broad width of
timeframes.
With reference to some anecdotal feedback, it is evident that those who have already
achieved 5 years of settlement in the UK (but not applied for registration) feel very confident
about their long term future, however the opposite is said of those with only 1 – 3 years of
employment in the UK. It is for these individuals we would like to receive some form of
assurances as soon as possible.
• Government to finalise settled status decisions, at the lowest registration cost
possible, without delay.
When considering Polypipe and its medium to long term future, the company realises it has
a responsibility to take a longer term approach when considering the available labour pool,
as well as considering the annual labour cost increases being applied to all businesses
through mandatory pay scales and the knock on effect this is having on our level of
competitiveness within global markets.
Having considered Polypipe’s production initiatives and future skills needs, the company
has taken the view that investment into automation and robotics is of paramount importance
and a number of projects are already underway, with considerable investment earmarked
for these initiatives.
To remain competitive in the UK industry it is essential for Polypipe to work towards
production processes at less cost with better quality whilst at the same time tackling the long
term labour challenge by reducing its future needs on unskilled labour.Our investments aims over the long term will create a need for Polypipe to upskill its current
workforce, which in turn supports the apprentice levy system recently introduced, driving
development towards more skilled engineers in the UK, which we are fully supporting.
However, our long term labour needs cannot be fully managed by skilled workers alone. We
would foresee a need to retain the ability to employ a pool of unskilled workers, therefore
whilst the government is considering the future migration system we would like to see a
process which continues to allow unskilled workers, alongside the current Tier 2 system for
skilled workers, access to UK work. Our preference would be a migration system that
focuses on the entire spectrum of skills, not just higher skilled.
Polypipe has not experienced the need to sponsor graduate level roles from the global
labour market, however we are sympathetic towards the industries that do extensively
require this.
From our experience the UK is quite capable of developing students to the levels that we
need within our sector, and in addition to this, Polypipe is also inclined to support the ongoing
development of our own individuals with employer sponsored qualifications to graduate
level. We therefore do not foresee this changing in the future as it works well at Polypipe
presently. However, it remains of paramount importance to achieve a system that fulfils the
needs of all employers across the breadth of skills/labour needs in the long term.
• Government to agree a system that supports the provision of ongoing unskilled labour
availability with an appropriate work ethic, either by instilling a work ethic in the 2.4
million currently unemployed in the UK, e.g. some form of pastoral support provision
along with benefit system changes, or ensuring the availability of unskilled migrant
workers in the future within a planned migrant system.
If UK employer initiatives and investments are driving projects that upskill its current and
future workforce, and the UK educational system is appropriately preparing students for
future UK skills needs, there must remain an opportunity or a system that allows the country
to maintain an effective unskilled labour pool, as there will always be a need within the likes
of manufacturing, retail and food industries. These industries also require a seasonal flex.
From Polypipe’s perspective maintaining a decent pool of unskilled labour is our long term
challenge following the referendum decision.Rolls-Royce Summary Introduction Rolls-Royce is a preeminent engineering Group operating globally in over 50 countries and focussed on the design, manufacture and servicing of world-class power and propulsion systems. Our headquarters have been in the UK for over a century and most of our research and development work is carried out here, as well our main graduate and apprentice programmes. Our products and services are hugely technical and complex which requires a high proportion of our workforce to be highly educated and skilled, particularly in STEM areas of expertise. Supplementing our resident UK workforce is a small but vital population of highly skilled EU nationals to deliver specialist engineering and manufacturing skills in the UK due to such skills shortages in the UK domestic market. It is critical that we can continue to source highly skilled talent from the EU and equally from non-EU markets with agility and efficiency for both short and long term work, on the job training and specialist knowledge transfer. Two thirds of our revenue and three quarters of our order book are generated outside of the EU and the anticipated growth we see in the years ahead will be predominantly from the Middle East and Asia. That said we have a significant geographical footprint (infra- structure and workforce) across the EU. Rolls-Royce’s commitment and investment in the UK remains high but UK immigration policy must serve as a key enabler for organisational development within the UK. It must enable us to deploy highly skilled people strategically and intelligently when needed. Should it become a real challenge to engage our skilled talent in the UK – whether for short or long term needs – the natural progression will be to look for and invest in locations that are more accommodating and facilitating. Rolls-Royce Response 1. Please provide evidence on the characteristics (e.g. types of jobs migrants perform; skill levels etc.) of EEA migrants in your particular sector / local area / region. How do these differ from UK workers? And from non-EEA workers? Over 95% of Rolls-Royce’s 25,000 strong workforce are British citizens. Two-thirds of the balancing population (c850 EEs) comprise of EU citizens (predominantly locally hired, but with small numbers of international assignees) and the remaining balance non-EEA nationals (again predominantly locally hired). Whilst the percentage (c5%) is relatively modest, these employees are vital to the continued success of our business. They perform key engineering roles on our flagship
engine programmes; others delivering vital manufacturing skills in our complex assembly processes. Some hold key executive roles, others operate in managerial level roles, the greater numbers support our manufacturing engineering workforce. Many of these individuals are highly educated (to Bachelors’ degree level or higher) and are paid significantly higher wages than UK national average rates. Others have been through our world-class apprenticeship training schemes. The average annual wage for UK hired EU citizens is in excess of £43K per annum. We have employee representation from virtually all EEA member-states on our UK headcount – the top 7 citizenship locations comprise Italy, Spain, France, Poland, Ireland, Germany and Greece. STEM skilled talent remains at critical shortage levels across the Aerospace industry and beyond. For many years Rolls-Royce has invested in the education, development and attraction of individuals into Engineering through a very comprehensive and broad-ranging outreach programme (see attached appendix 1) but skilled and available talent remains in very short supply in the UK, Hence we must recruit on a global basis (both EU and non- EEA citizens) to ensure we meet our existing business commitments and to deliver on long-term research and development programmes to remain competitive and relevant in future markets. In summary, there are no distinguishable differentiators between the non-EU versus EEA nationals whom we have working for Rolls-Royce in the UK. They are highly educated and highly skilled employees – the majority possess STEM skills that are absolutely vital to the current and future success of our business. 2. To what extent are EEA migrants seasonal; part-time; agency-workers; temporary; short-term assignments; intra-company transfers; self-employed? What information do you have on their skill levels? To what extent do these differ from UK workers and non-EEA workers? We have no requirement for seasonal migrants. There are occasions when we need to deploy skilled workers (both from inside and outside of the EU) to the UK for extended training on new products or systems, or more over to support peaks in our operational manufacturing cycles. These employees will typically travel to the UK under the provisions of an extended business trip. Limited numbers may be deployed on longer term projects to the UK under International Assignment terms due to their engineering skills and specialisms. Today we have 9 EU citizens on assignment in the UK, with slightly higher volumes of UK hosted assignments from non-EU home locations. The vast majority of the non-UK citizen element of our workforce comprises of permanent EU contracted citizens.
3. Are there any relevant sources of evidence, beyond the usual range of official statistics, that would allow the MAC to get a more detailed view of the current patterns of EEA migration, especially over the last year? There has been no significant noticeable change in the patterns of EEA migration over the past year (attrition or job applicants). During 2017 the Civil Aerospace division of our business has needed to recruit approximately 160 new hires with specialist engineering and manufacturing qualifications and skills – and while we are able to source the majority of recruits from the resident UK workforce, it has also been necessary to supplement a similar ratio of approximately 5% of the new hires from EU and non-EU nationalities. In the process of attracting EU nationals to the UK it has been noted that the younger, more junior candidates typically seem less concerned about the impact of Brexit whereas the more senior applicants have raised more questions around the transfer of pensions, social care impacts on immediate family and freedom of movement. This may have reduced the overall number of EU applicants we might otherwise have received for this recruitment campaign but is hard to objectively conclude. 4. Have the patterns of EEA migration changed over time? What evidence do you have showing your employment of EEA migrants since 2000? And after the Brexit referendum? Are these trends different for UK workers and non-EEA workers? The number of EEA migrants employed in our UK business continues to grow year on year. The same can be said of non-EU migrants. But expressed as a percentage of our overall UK workforce, the number remains relatively constant and very modest at less than 5%. We continue to source the brightest and best engineers, wherever they may be. Likewise for Graduates to develop and take up key roles in engineering and central functions. The same with skilled manufacturing workers. Rolls-Royce has expanded its global footprint significantly since the millennium – with a mix of both organic growth and acquisition. Over 9,000 German based employees joined our business when we fully acquired the former Tognum business to form our Rolls-Royce Power Systems business which is headquartered in Friedrichshafen, Germany. This has naturally led to the cross-transfer of skills and talent leading to increased business travel, assignment and permanent transfer relocations between the UK-Germany, and beyond. Our demand has not reduced since the UK referendum, but there is a level of evidence and experience that EU citizens are being more cautious, in some instances more reluctant to consider taking up UK permanent roles in these times of uncertainty of rights to work/settle. 5. Have you conducted any analysis on the future trends of EEA migration, in particular in the absence of immigration controls? Please see response to Q4.
6. Have you made any assessment of the impact of a possible reduction in the availability of EEA migrants (whether occurring naturally or through policy) as part of your workforce? What impact would a reduction in EEA migration have on your sector / local area / region? How will your business / sector / area / region cope? Would the impacts be different if reductions in migration took place amongst non EEA migrants? Have you made any contingency plans? The closure of the Skills Transfer and Short Term ICT visa categories for non-EEA nationals has already created significant challenges to our business. Should similar restrictions apply to EEA nationals post Brexit, this will exacerbate such challenges with a detrimental impact on business operations and ultimately adversely impact the UK economy. For example, the business sometimes needs non-UK employees from other our Rolls- Royce locations to complete short temporary work assignments at critical stages of a major project or to complete crucial on the job training in the UK. Due to the size, complexity and high value of our equipment and products at established world class UK manufacturing sites it isn’t realistic to physically move activity temporarily outside of the UK. For employees with less than the required employment service and salary base to meet the minimum requirements for Tier 2 Intra Company Long Terms Staff visas, we have not been able to proceed as planned. An example of this is Bangalore where we have a recently established design and manufacturing facility to aid our customer commitments in region. The above Tier 2 visa route closures have already forced changes in the way our business thinks and structures certain operations (such as for knowledge transfer, on the job training and managing temporary workload peaks). Our concern is that overly restrictive immigration policies will slowly drive the expansion of our activities outside of the UK to locations where the immigration environment recognises business needs and operates immigration policies that can accommodate. Should sponsorship of visas for EEA nationals become part of the post Brexit UK immigration policy, then any increased burden of cost on employers will be of further detriment at a time when reducing operating costs is essential to remain globally competitive. For example, in the last 12 months RR has recruited 145 permanent EU national new starters in the UK. If this volume is replicated post Brexit and assumes the need for 3 year sponsored visas at a similar cost to Tier 2 General visas - including legal representative fees and an average family size of 2 - this equates to an additional annual burden of cost to the Company of nearly £1 million. Add in the cost of visas for skilled temporary workers at current volumes, our annual additional costs will exceed £1mil p/a. Recruitment Practices, Training & Skills
7. Please provide evidence on the methods of recruitment used to employ EEA migrants. Do these methods differ from those used to employ UK and non-EEA workers? What impact does this have on UK workers? Have these methods changed following the Brexit referendum? The methods we use to attract and select our most highly skilled and talented workers has not changed following the Brexit referendum and there is little difference in the methods used to recruit EEA and non-EEA migrants. Our internal and external recruitment campaigns aim simply to find the best and most talented candidates subject to having the Right to Work in the UK, with the only constraints being in giving preference to any current Rolls-Royce employee whose role is at risk of redundancy. . Internal roles are advertised globally on the Company’s internal website while external campaigns are run on websites such as www.linkedin.com and www.indeed.com as well as www.rolls-royce.com for generic roles and websites such as www.theengineer.com which by their nature are globally accessible for targeted high skill level roles. Our Sourcing team will proactively approach candidates for specific skilled roles if deemed necessary. While an impact is that UK workers are competing in a wider talent pool for UK jobs and currently have a higher chance of being displaced by an EEA-national, a positive impact is UK nationals recognise the need to raise their own standards to ensure they are well equipped to compete with the brightest and best. 8. Do recruitment practices differ by skill-type and occupation? The only difference is that for the more highly skilled roles there can be a more proactive sourcing and approach for candidates with a specific skill set, experience and / or qualification. The sourcing team is educated in immigration legislation requirements and able to ensure that when speaking to applicants they can answer any questions around Right to Work in the UK. For certain roles, for example where the role is covered by SOL, the sourcing strategy can be far more wide reaching to include both EU and non-EU nationals whereas normally the approaches are limited to UK and EU national candidates. 9. What are the advantages and disadvantages of employing EEA workers? Have these changed following the Brexit referendum result? As per our prior commentary, our intent is to recruit / deploy highly skilled talent with the appropriate STEM skills to meet our business commitments today and develop products and solutions for tomorrow. So we make no conscious decision to recruit EU/EEA nationals over and above other non-EU citizens. The focus is purely on ‘talent’. There is of course a secondary benefit to hiring an EU/EEA national relating to their current Freedom of Movement with the UK. Business across the EU accounts for c25% of our revenues and c33% of our infrastructure. So mobility for talent and manufacture is
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