The cost of using non-UK labour under changes to the Skilled Worker Visa (SWV) process, introduced last year by the previous UK government, is expected to hit the seafood sector hard, according to a Seafish analysis. For some fleet sectors, quayside prices would have to rise substantially to offset the increased cost of non-UK labour.
The then Prime Minister and Home Secretary announced plans in December 2023 to reduce net migration and resolve abuses of the UK immigration system. These include substantial increases to the salary threshold for a skilled overseas worker, from £26,200 to £38,700. The UK Government had already announced that the Immigration Health Surcharge (IHS) would also increase by 66% to £1024 per annum, and this change took effect on 6th February 2024. This directly increased the cost of the visa application process.
According to an Economic Impact Assessment carried out by Seafish in response to changes relating to the Skilled Worker Visa process, the over-12m nephrops fleet, demersal/beam trawl and static gear catching sectors are identified as most affected in being highly reliant on non-UK labour and with current crew earnings falling short of the required thresholds.
The Seafish study identifed 82% of the over-12m nephrops fleet as currently relying on non-UK crew, and the average salary is £19,222.
52% of the demersal/beam trawl sector relies on non-UK crew, and average annual earnings are £34,266. For the over-12m static gear fleet, there’s a 75% reliance on non-UK crew and average earnings are £28,297.
‘This analysis is underpinned by direct industry feedback collected by Seafish during late December 2023. The seafood sector is heavily reliant on non-UK labour across both catching and processing sectors,’ Seafish states.
‘Any changes to the cost and complexity of accessing non-UK labour will have an impact on operating costs, and on business profitability and viability. There will also be knock-on impacts to consumer prices, to the competitiveness of our export trade, and to businesses that support the seafood sector.’
According to Seafish’s analysis, the nephrops fleet could be most seriously affected by these policy changes, and this fleet sector could experience annual operating losses of between £41.5k and £83.5k per vessel, on average.
‘Unless these losses are offset by increased prices, the changes could lead to vessel tie-ups and business closures, with a knock-on impact on scampi supply in the UK,’ Seafish states.
The assessment finds that to offset the effects of these policy changes and to meet the new £38,700 salary threshold, the per kg price paid by processors/wholesalers to vessel operators would need to increase by 33%.
Consequently, processors would have to charge retailers 14.5% more, and processors would have to charge food service sector buyers 15.6% more.
