TV Features

The Chinese and Bengali communities have both said it could fundamentally undermine the economic well being of the catering businesses they have built up over the past four decades. Kurt Barling reports

There’s nothing like a crisis to get people working out how they are going to survive. 

The introduction of new immigration rules has prompted the first ever national survey of the Chinese catering industry.   A set of businesses which new analysis claims makes a £4.9 billion contribution to the national economy.

A lobbying body, the Chinese Immigration Concern Committee, has conducted the research in order to provide the government with evidence that the Chinese catering industry needs to recruit migrant workers to service their restaurants and takeaways.

The report based on this research was given to the Migration Advisory Committee (MAC) at the end of April.  The MAC is currently using this called-for evidence to help draw up the first Shortage Occupation List (SOL) which is due to be published in a few weeks' time at the beginning of June.

In the absence of replacement staff 80 per cent of takeaways for example said that family members have found themselves increasingly called on to help the business stay afloat.

The report claims there is some evidence that there is unwillingness by non-Chinese to take the kind of work being offered in this sector.   In London’s Chinatown nearly half the restaurants registered their vacancies with the local Job Centre Plus (JCP), for a period of six weeks in February this year.  Only one out of 110 vacancies were said to be filled by referrals from the JCP.

This labour and skills problem presents the owners of these establishments with a fundamental question.  Is the business model on which they’ve depended sustainable?

The Shortage Occupation List is, for the foreseeable future, the way in which new immigration is going to be regulated. It would seem unlikely that a government will allow unskilled labour into the country just because the work has not be traditionally done by anyone else other than Chinese workers.

The prevailing business model is overwhelmingly dependent on family members being supplemented by a few other workers.  Seven out of 10 takeaways for example employ less than five people and are classed as micro businesses.

Chinese food stall in Chinatown

Seventy-seven per cent of all Chinese restaurants and takeaways have a weekly turnover of less than £8,000. 

In practice this means that profit margins are very tight and recruitment of affordable workers is crucial to their survival.

As you would expect in this type of labour market a shortage of supply has driven up wages for skilled labour.  It is claimed that restaurants are poaching chefs and other skilled staff.   And with no replacements in the offing it is leading to a contraction in the sector.  

The CICC has provided anecdotal evidence that the shortage of workers over the last year has meant more smaller businesses are finding it difficult to match the combination of labour shortages and the associated rising costs.   They are going under.  

Traditional employment practices have also meant new liabilities for restaurant owners.  From their research, CICC estimates nearly nine out of 10 businesses, outside London in this sector, provide food and accommodation tied to the employment. 

If restaurateurs are found to be employing illegal migrants, they are now held responsible for continuing to pay the costs of food and accommodation for the workers.   This has already triggered bankruptcies and has meant many businesses voluntarily letting workers go.

Chinese food stall in Camden

If the business model in Chinese catering proves unsustainable because it is too dependent on migrant labour then the prediction by some of a 25 per cent fall in the number of restaurants and takeaways looks likely. 

For generations Chinese catering has been a source of not just survival but wealth creation in that community.  Perhaps it was inevitable as businesses became less dependent on the working contribution of family members; the clash with immigration priorities was going to cause tension.  

A greater emphasis on taking Chinese restaurants upmarket and formalising the training of chefs will take time as will changing the main working language in this sector from Chinese.

The Shortage Occupation List cannot be seen to be stifling the legitimate needs of existing migrant communities. 

It simply illustrates the difficult balancing act that the MAC has to strike in regulating the numbers coming into the country.