London, UK: It has never been clear to what extent the availability of cheap labour drawn from the poorer parts of the EU has had on wages in the UK.
It has been argued that Brexit would have little effect on wages rates in the UK or on labour availability. But that was before coronavirus arrived along with lockdowns and travel restrictions.
The effect of both has been compounded by the government’s drastic immigration policies aimed at reducing immigration. The result is a sudden and dire shortage of people willing to carry out low paid work typically with extremely poor working conditions and contracts, usually zero-hour contracts that provide little or no security of employment.
There has long been a truck driver shortage in the UK – indeed it is a European-wide problem – but it is now at crisis point exacerbated by Brexit, Covid, and unusually high summer demand with the end of lockdown and opening of hospitality businesses.
Shane Brennan, chief executive, Cold Chain Federation has issued a stark warning: “The real crisis for food supplies starts now… This does feel very different to the past crises we’ve been through – the lockdown and Brexit preparations. This time we’re trying to do the job without labour and that is a very different challenge.”
And it is not just drivers that are in short supply: food processors, packing plants and warehouses are all struggling with labour shortages. All were hugely dependent on low-wage foreign workers. Many have returned home during the pandemic and Britain’s exit from the EU has discouraged new arrivals.
The British Meat Processors Association warned his week of labour shortages with production capacity down 10% because people and skills were unavailable in the UK. Nick Allen, chief executive, British Meat Processors Association , said: “Our problems started with Brexit and Covid has made them worse. And the pubs and hotels opening up has increased the demand on labour. The whole food industry is really struggling at the moment.”
The British Poultry Council said throughput in the industry which usually processes some 20m birds each week had fallen by 10 per cent since Easter.
The British Retail Consortium dismisses fears of product shortages claiming there was “minor disruption” to some supply chains. Tamara Hill, an employment policy adviser at the BRC, said: “Currently, there is very high demand for staff in warehousing and logistics, particularly HGV drivers and food processing centres, which has led to some shortages in these areas.”
A meeting with logistics firms and transport ministers was held on Wednesday to discuss the driver shortage. The Road Haulage Association said it had “provided overwhelming evidence that the shortage is getting worse. The situation must be addressed right now.”
Logistics UK said that almost 30% of its member firms were hunting in vain for drivers. Alex Veitch, general manager, public policy, said at at least 30,000 driving tests were postponed due to the pandemic and should be fast-tracked now. “This has left thousands of potential HGV drivers waiting in the wings when the UK needs them most.”
Tesco warned that a shortage of truck drivers is forcing it to waste some 50 tonnes of food a week. Like all businesses, Tesco is battling against an estimated shortfall of some 65,000 drivers. Duncan Buchanan, policy director, RHA, said the vacancy rate now stands at around 12%. He said: “Member after member has said they’ve never seen it at this level ever before. This problem we’ve got now is not just a couple of weeks. It’s going to be like this until the end of the year if we don’t start addressing it.
Ken Murphy, chief executive, Tesco, said that if the crisis worsens then the retailer might have to pay more to attract drivers. It is estimated the shortage has sent truckers’ wages up by a fifth. “Once there is an understanding that there is availability of work [at Tesco among drivers] and rates are potentially more attractive, they will fill very quickly.”
A spokesman for the Department of Transport said: “Most of the solutions are likely to be commercial and from within industry, with progress already being made in key areas such as testing and hiring, and a big focus towards improving pay, working conditions and diversity.
“Our new points-based immigration system makes clear employers should focus on investing in our domestic workforce, especially those needing to find new employment, rather than relying on labour from abroad.”
Recruitment firm, Reed recruitment added 275,000 roles in May alone — a 26% month-on-month increase and a 237% year-on-year increase. While vacancies increased across all regions, London saw an 18% rise in job numbers in May compared to April and had the largest volume of postings across all regions, with 57,100 jobs added.
According to a KPMG survey and online job placement agency Adzuna, the number of workers available to fill job vacancies declined at the quickest pace since 2017.
Staff shortages worsened for the third month in a row, with recruiters citing pandemic uncertainty and the furlough scheme weighing on the availability of permanent candidates.
The jobs market “seems to be firing on all cylinders” KPMG partner Claire Warnes said. “But the deterioration in staff supply intensified this month, this is a worrying trend.”
