Supply chain challenges risk derailing Christmas (and the Government)

By Aimee Howard

The UK’s economic recovery has stalled this month, blamed by the private sector on supply chain issues and employee absences. Indeed, a shortfall of some 90,000 HGV drivers was reported by the British Retail Consortium and the “pingdemic” – causing staff to self-isolate as a result of the NHS COVID 19 app – has led to High Street heavyweights such as Gregg’s and Costa’s serving a limited menu, and in the case of Nando’s, closing around 50 branches.

Although the pandemic can be heavily blamed for the calamity, we cannot ignore the effect of Brexit on both staff levels and the actual import of goods, with shipping costs intensifying and deficiencies of raw materials stimulating price pressures. Around 7% of UK businesses have affirmed they have found it difficult to source materials, services or products over the past week. For the construction industry, it increases to 15%.

Industry leaders have now warned that Christmas could be in jeopardy should staff shortages endure and have called on the Government to relax post-Brexit immigration rules, namely variations to the visa system to allow those who left the UK during the Brexit period to return. The Times reports Co-operative Group CEO Steve Murrels as saying that food shortages are “at a worse level than at any time I have seen,” telling the paper that the crisis was a result of “Brexit and issues caused by COVID”. The Chairman of Tesco, the UK’s largest supermarket group, has requested more drivers to meet an estimated 100,000 shortfall. “I think there may be some shortages at Christmas,” he warned in the Guardian. “At the moment we’re running very hard just to keep on top of the existing demand and there isn’t the capacity to build stocks that we’d like to see.”

Logistics UK, which represents freight firms, and the British Retail Consortium, contend “a temporary visa could lure back lorry drivers [who left the UK due to Brexit and COVID-19]”, according to the BBC.

The two groups have requested the Government grant temporary work visas to EU HGV drivers, offer funding to train new drivers, and enhance Covid testing facilities to allow daily testing for drivers.

However, ministers remain opposed to visa changes. Yesterday a Home Office Spokesperson declared: “The British people repeatedly voted to end free movement and take back control of our immigration system. Employers should invest in our domestic workforce instead of relying on labour from abroad.”

In return, the Government has publicised proposals to “streamline” lorry driving tests to address a purported backlog of some 45,000 tests suspended during the pandemic. It has also relaxed restrictions on drivers’ hours to allow longer journeys, but on safety conditions.

Many firms remain unimpressed believing that the Government is simply refusing to accept responsibility for the issue and is laying blame elsewhere. Rod McKenzie, of the Road Haulage Association, told the Guardian:It’s frustrating that the government is so inactive on this issue”.

It’s evident that short-term solutions are really what’s needed, and skills gaps can only be filled by addressing staff shortages created by Brexit. Undeniably, if the Government do not act soon and smooth tensions, Britain’s economic bounce back could be in significant trouble.