29th October, 2021- by Olivia Gomez
Olivia Gomez takes an in depth look at how Brexit, the pandemic, labour issues, aging populations and more have contributed to Britain’s supply chain crisis.
The global supply chain has always been fragile, but recent world events have made painfully clear just how precarious it is. Brexit and COVID-19 have significantly worsened staffing issues within the supply chain, and as a result several industries have been hit. Over the past few months, shops and supermarkets across the UK have been experiencing product shortages, and with winter coming the fear is that shortages will have a significant impact on Christmas celebrations. One particularly big issue affecting industries across the board is the lack of qualified HGV lorry drivers. According to the Road Haulage Association (RHA), the UK is currently lacking 100,000 drivers needed to keep up with demand, and HGV drivers have been in short supply even before Covid, where there was an estimated shortage of 60,000 drivers.
Still, the Brexit-Covid combo certainly did not help matters. When the economy briefly shut down at the beginning of the pandemic, a lot of drivers found themselves without much work. As the average age of drivers in the RHA is 55, the lack of work prompted a lot of them to retire: official numbers say that around 2,000 workers left the industry every week, with only 1,000 new recruits joining. Furthermore, training to become an HGV driver can be expensive, with costs running up to £7,000- this makes it even harder for young recruits to join the industry, as they might not have the resources to pay for the necessary training. Even if they can pay, they might not be able to take their test anytime soon as social distancing and isolation has caused a backlog in driver testing, with the RHA reporting a significant drop of candidates passing their tests in 2020 compared to 2019. According to them, in 2020 there were 25,000 fewer candidates performing and passing their tests and up to 40,000 such tests were cancelled due to COVID measures, which has led to renewed efforts to recruit newer and younger drivers.
The Brexit-COVID combo certainly did not help matters “
Additionally, new tax policy reforms have contributed to drivers leaving the industry. New reforms to the IR35 now prevent drivers from setting up limited companies to pay less taxes while working as employees, with the change in status from self-employed to just employed causing a significant drop in drivers’ earnings. The issue of an ageing driver population has been present for years, but previously was largely accounted for by a steady supply of new recruits from EU countries. However, now that the UK has removed itself from the EU single market, new immigration rules have made it difficult for EU drivers to enter and find work in the UK, causing a drop of approximately 20,000 drivers in the workforce. In addition, working conditions and worker rights in the EU are on the whole much better than in the UK, making working in the UK a mostly unattractive prospect for EU workers.
This lack of HGV drivers has caused delays in deliveries, most notably of petrol, which resulted in panic-buying and a consequent fuel shortage- however, authorities say availability has improved in areas that were hit the hardest by the delays. Another sector disrupted by the lack of drivers is that of dairy and confectionery: giant suppliers such as Nestle and Arla have been forced to cut back on deliveries to shops and supermarkets, as there is no one to actually deliver their products. According to the BBC, one dairy farmer was even told to dump his milk because it couldn’t be collected. The Brexit-induced labour shortage has also taken a toll on industries like meat and poultry. The British Poultry Council reported approximately 7,000 vacancies across the sector resulting from the new Brexit immigration rules, and pig farmers are worried they won’t be able to sell their animals due to being short-staffed because European workers went home.
Drivers, farmers and other qualified skilled workers… are imperative for our system to function properly “
Ultimately, both product and labour shortages stem from the same root cause. Some sectors, like the freight sector, had been warning the government for years about potential shortage issues before Brexit came around, whilst others have only been directly impacted since leaving the EU. Still, actions have been taken to improve the situation- the UK has been trying to make it easier for foreign workers to come back by allowing for temporary visas, although there are concerns that this measure has come a little late to stop shortages during Christmas time. Other measures include providing free training bootcamps for 5,000 HGV driver candidates and training an extra 1,000 with help from the adult education fund. Rules around driving tests have also been relaxed in order to expedite recruitment, and increased wages have been introduced in hopes of attracting more employees to short-staffed industries.
These are all great first steps towards repairing the loss of labour experienced in the past years. Nevertheless, it will be years before enough people to satisfy demand are trained and hired. This means the UK could be experiencing shortages and delays for even longer, with some experts estimating one to two more years of issues in the supply chain. However, the hope is that the situation will gradually improve as the UK fully adjusts to the changes brought about by Brexit and the Covid pandemic slows down.
One thing has been made certain. In a world that increasingly relies on technology, the supply chain disruption we are currently experiencing has highlighted who the real key players are in our economy. Drivers, farmers, and other qualified skilled workers, although often invisible, are imperative for our system to function properly. It is only right to compensate them accordingly and to ensure they enjoy safe and supportive working conditions.