Yes, Brexit is partly to blame for Britain’s supply chain crisis, says Ros Taylor. But ending free movement has exposed deeper problems within the labour market.
One day in late August, Tom Reddy got into work to find he had been given a 40 per cent pay rise. His shift work driving lorries now paid £17.50 per hour. “There are no drivers, things are about to get a bit tasty,” he tweeted.
This proved an understatement. British shoppers, accustomed to a wide range of goods thanks to just-in-time logistics, now find empty shelves. Staff shrug and explain that deliveries never arrived or were missing many items. Prices are going up. Last year, many Britons were forced to cancel family Christmas celebrations after a last-minute ban on gatherings of more than one household; this year, Marks and Spencer felt it had to reassure customers that it was ‘confident’ of a full supply of turkeys, after the government bailed out two carbon dioxide firms.
The problems go beyond turkeys and carbon dioxide. Farmers cannot transport their pigs to market. McDonald’s ran out of milkshakes. Nando’s could not source enough chicken. The vets working in abattoirs are in short supply.
Is Brexit to blame?
Like the gas price crisis – which temporarily drove the supply chain issue off the public’s radar - the turmoil has several causes, including the pandemic. But Brexit has played a major role. This is why, although other European countries are also short of heavy goods vehicle (HGV) drivers, Britain is suffering more acutely.
The average age of a UK lorry driver is 55. Reddy – who, despite the boost to his wages, is still leaving international haulage – is 36 and already worn out by the job. “Everything’s aching. You have to give up too much of your personal life,” he told me on the Bunker podcast. Shifts last 12 hours, with a rest period of only nine. “It’s not a job people want to do any more… UK drivers do work really, really hard. But you can ask an Eastern European to do something, which they would take in their stride, where a UK driver might push back... Eastern Europeans will work as many hours as you can throw at them.”
Although HGV drivers tend to lack the skills to move into other sectors, some have been able to take advantage of the boom in UK home deliveries that took off during the pandemic. Those jobs are not well paid either, but they do offer more control over working hours than hauliers have.
Unfortunately for haulage firms, the supply of migrants to fill the vacancies left by retired UK drivers is dwindling. In the mid-2000s, workers from Central and Eastern Europe plugged the gap. Around 12,000 have left since 2017. The number of UK drivers has fallen by 36,000 in the same period. Now EU nationals cannot come to work here unless they meet the requirements of a points-based immigration system that favours shortage occupations.
After hauliers warned of fuel shortages and long queues began to form at petrol stations in late September, the government said it would issue temporary visas for foreign HGV drivers in an effort to fulfil pre-Christmas deliveries. Even this short-term concession was resisted by the more enthusiastic Brexiters, who wanted the industry to raise wages further to tempt drivers out of retirement and encourage more people to train with the aim of joining the industry for the first time. The market, in other words, would fix the problems precipitated by Britain’s exit from the Single Market.
But neither this three-month fix nor recruiting more UK drivers will address the tax changes that recently made the job less lucrative, nor the poor facilities available to drivers in the UK. Brexit has also made hauliers’ paperwork more complex, and anything that lengthens a trip is unpopular with drivers. The test requirements for HGV drivers were slightly eased this autumn to address a backlog that had built up during the pandemic - but those changes will take months to have an impact.
Not just HGV drivers
Nor are lorry drivers the only occupation suffering from labour shortages in the UK. Poultry workers are also eligible for the temporary visa, principally because a shortage of turkeys at Christmas would agitate the press. These types of labour shortages, which lead to the lack of something a customer wants or needs urgently, get attention – far more, for example, than the hundreds of thousands of job vacancies in hotels and catering and the care sector. In London’s Covent Garden district, on a weekend in September, queues formed outside restaurant chains, including Wagamama. Inside, half the tables were empty because, the maître explained, the restaurant could not hire enough staff. After 18 months of on-off lockdowns, Britons want to go out again, but there are not enough people to serve them.
Many of these kinds of jobs do not qualify for a Skilled Worker visa because they do not pay enough. For example, a senior care worker can apply for a visa if they are offered a job that pays 80 per cent of the going rate, or £6.67 per hour. The government’s own estimation of the going rate for this work is therefore £8.34; the King’s Fund puts the average wage at £8.50. Yet no one under 20 should be paid less than the minimum wage of £8.36 per hour. Over-23s ought to get £8.91. Junior care workers, one assumes, are paid even less. Unsurprisingly, many skilled staff move to the NHS, which is also understaffed but pays better.
Despite the 7.2% vacancy rate for care workers – which is likely to rise now that care home workers have to be vaccinated against COVID-19 – no one is pretending that market pressure can force up wages. The sector is underfunded. The social care reforms announced earlier this autumn will not address this problem: their purpose was to ensure people do not need to sell their homes to pay for care, not to increase the overall funding of this sector. Just £500m will be available to ‘professionalise’ the social care workforce and ‘improve recruitment’.
Britain’s supply chain crisis is the newly visible side of a far bigger problem – the failure to pay people in Britain enough money to do arduous jobs. By cutting off the flow of migrants who were willing to do them, Brexit has simply made this problem more visible. Some sectors may be able to attract more staff by raising wages, as Reddy’s boss did. One way or another, the UK can expect inflation to carry on rising – with all the problems that this will bring.