New immigration system a 'hammer blow' for fleets

The commercial fleet industry is warning that a new points-based immigration system could bring the supply chain to a grinding halt.

Faced with a 60,000 shortfall in drivers under the current rules, and EU workers accounting for 13% of all people working in the logistics sector, both the Freight Transport Association (FTA) and the Road Haulage Association (RHA) have urged the Government to think again.

After the policy announcement last month (February), Sally Gilson, head of skills policy at the FTA, told Commercial Fleet she was “appalled” that the Home Secretary, Priti Patel, had categorised professional drivers as “low-skilled”, effectively ruling out the industry’s ability to recruit foreign workers.

Gilson explained that the sector is already facing a severe labour shortage, with 64% of transport and storage businesses now struggling to fill vacancies.

“The logistics sector is the lifeblood of the nation’s economy, ensuring shops, hospitals, restaurants and schools etc. all receive the goods they need to operate,” she said.

This has increased in importance due to the coronavirus, with the like of Morrisons looking to create 3,500 new jobs and expand its home delivery operation.

FTA is urging the Government to give special dispensation to EU logistics workers and the RHA is calling for the same.

Richard Burnett, chief executive of the trade body, said: “Many UK operators are totally reliant on European drivers.

“Putting a stop to the immigrant workforce will have a massive impact on the supply chain, and the next-day deliveries we have all come to expect will be a thing of the past.”

Burnett highlights how 95% of all goods in the UK have made the journey to their ultimate destination on the back of a truck. “It cannot be allowed to grind to a halt as a result of Government short-sightedness,” he said.

NEW RULES

The new system, which takes effect from January 1, 2021, will award points for specific skills, professions, salaries or qualifications/attributes and visas will be awarded to those who gain sufficient points.

The Government says it has listened to the “clear message” from the 2016 referendum and the 2019 general election and will “end the reliance on cheap, low-skilled labour coming into the country”.

It will treat EU and non-EU citizens equally. Skilled workers will need to meet a number of relevant criteria, including specific skills and the ability to speak English, to be able to work in the UK.

All applicants will be required to have a job offer and, in line with the recommendations of the Migration Advisory Committee (MAC), the minimum salary threshold will be set at £25,600.

Patel said: “We’re ending free movement, taking back control of our borders and delivering on the people’s priorities by introducing a new UK points-based immigration system, which will bring overall migration numbers down.”

The new rules say there will be no specific route for low-skilled workers. It is estimated 70% of the existing EU workforce would not meet the requirements of the skilled worker route.

It has, however, announced that a pilot scheme for seasonal workers in agriculture will be quadrupled to 10,000 places.

The Government says UK businesses, including commercial fleets, will need to “adapt and adjust” to the end of free movement.

It urges employers to “move away” from a “reliance on immigration” as an “alternative to investment in staff retention, productivity, and wider investment in technology”.

Brexit has already had an impact on the current driver shortage. According to the FTA’s Logistics Skills Report 2019, declining EU net migration has contributed to a 43% rise in job vacancies in the transport and storage industry over the past couple of years.

An ageing driver population and significant training costs have also exacerbated the problem. The average age of an HGV driver is 55, less than 1% are aged under 25 and the cost of training is approximately £5,000.

Gilson said: “It is obvious how detrimental this policy will be on the very businesses charged with keeping the UK trading.

“If the Government insists on withdrawing access to EU workers, it will have to adapt and adjust its allowances for training; the burden should not solely lie on UK businesses.”

TRAINING LEVY

The industry argues that changes to the apprenticeship levy could help deliver a boost in driver numbers (commercialfleet.org, October 16, 2019).

Employers, with an annual salary bill of more than £3 million must pay the levy, which in the current tax year is set at 0.5% of their total pay.

However, the training tax has been criticised for failing to deliver, including for the commercial fleet industry.

A recent report from the Public Accounts Committee, which highlighted the scheme’s failings, blamed the Government’s focus on higher-level apprenticeships. It wants the scheme overhauled so more benefit.

Burnett said: “Since its inception in 2017, hauliers have invested £320m into the apprenticeship levy, yet only £20m has been withdrawn. It’s just not working. It’s a tax on our industry.”

Commercial fleet operators are only claiming back a small proportion of the money they contribute under the levy, because the apprenticeships are not suited to their training needs.

“It’s a triple whammy,” continued Burnett. “We’re not getting the money to train new drivers, the driver shortage isn’t recognised and now we’re being told that operators can’t employ immigrants to fill staff rotas.”

He explained that profit margins are so low, between 1-2%, that employers simply cannot afford to train new drivers. “They need to employ those that are already qualified, but with a 60,000 shortfall this is impossible,” he said.

There has been a recent injection of Government cash to help tackle the driver shortage.

It announced a grant of £1m to support Road to Logistics – a not-for-profit scheme, founded by the RHA in association with telematics company Microlise.

The Road to Logistics programme aims to support those who may find it difficult to get permanent jobs, such as services veterans, ex-offenders and the long-term unemployed, by putting them on a path to a career in transport.

The investment, from the Department for Transport (DfT), is enabling logistics companies to run essential skills training for these groups, including within the prison system.

At the time, transport secretary Grant Shapps said that, considering the role the transport sector plays in transporting more than 1.4 billion tonnes of goods across the country every year, Government needed to ensure it was “fit for the future”.

Following a successful trial with HM Prison Sudbury and other jails across the UK, Road to Logistics aims to train up to 300 drivers in its first year.

The scheme will link potential drivers with employers, mentor them and put them through the necessary training, including taking their HGV driving test.

Gilson concluded: “The sector is already suffering from a severe labour shortage and the loss of these (EU) workers could cause business to come grinding to a halt. The UK economy simply cannot operate without the logistics workforce.”