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Ministers reject business leaders plea to hire more EU workers

Hire British-based workers to solve lorry driver shortage: Ministers tell businesses to prioritise UK rather than relying on EU workers to plug shortfall of drivers

  • Industry leaders say driver shortage is largely result of Brexit and pandemic 
  • This has led to thousands of European drivers going back to home countries
  • Kwasi Kwarteng told business leaders EU labour is only a ‘temporary solution’ 

Ministers have rejected business leaders’ plea to be allowed to hire more EU workers to solve problems with HGV driver shortages.

Businesses called for temporary visas to let European workers fill some of the half a million vacancies caused by the Covid pandemic and Brexit.

But the Government wants employers to invest in UK-based workers rather than relying on labour from abroad.

Supermarkets and suppliers are struggling to meet demand following an exodus of drivers from EU countries, who returned to the continent during the pandemic and remained there.

This is coupled with the health crisis bringing DVLA testing centres to a standstill, creating a huge backlog of drivers taking their HGV test.

A review of the Shortage Occupations list, which sets out jobs where overseas workers can apply for visas, is not due until next year.

Proposals had been floated for the Government to bring forward the review so HGV drivers could be included to ease the problems facing the supply chain.

Business Secretary Kwasi Kwarteng (pictured) has rejected business leaders’ plea to be allowed to hire more EU workers to solve problems with HGV driver shortages

But according to the Financial Times, Business Secretary Kwasi Kwarteng wrote to business leaders on Friday saying foreign labour only offered ‘a short-term, temporary solution’.

Driver shortage could push food prices higher

Supermarkets and hauliers have warned that shoppers could face long-term higher prices for food as result of systemic changes to the supply chain.

The Road Haulage Association said the ‘substantial’ pay rises offered by firms in need of new drivers could force supermarket bosses to pass the costs on to customers. 

Rod McKenzie, managing director of policy and public affairs at the RHA, said that the shortage of drivers needs urgent Government action and firms have offered better incentives and pay deals to secure potential recruits.

‘Certainly drivers’ pay is increasing, often by quite substantial amounts,’ he said. ‘This in turn is a cost that will need to be passed on, and given the tight profit margins of most haulage operators that means their rates to customers will have to go up.

‘In turn, this may mean more of us paying higher prices for goods, services and shopping – including food prices – going forward.’

One supermarket boss also said that increasing wages for drivers will result in inflationary pressure for retailers.

‘Paying drivers more, in itself isn’t the solution as it is resulting in them making choices about the level of working hours and balancing reduced hours along with weekend working,’ they said. ‘It will also create more inflationary pressure in the sector, which no one clearly wants.

‘To ease the pressure we need the Government to quickly allow us to access the EU labour market, whilst the industry must also play its part in increasing the driver pool through fast-track driver programmes and apprenticeships.’

The food retailer also warned that the food supply issues facing the UK are now embedded and won’t improve unless direct action in the short, medium and longer term is taken.

Mr Kwarteng urged employers to help the ‘many UK-based workers [who] now face an uncertain future and need to find new employment opportunities’.

His letter comes ahead of the UK’s furlough scheme ending on September 30.

According to the FT, Mr Kwarteng said in his letter to the British Retail Consortium and Logistics UK: ‘I am sure you would agree on the importance of utilising the strength of our domestic workforce and how our migration policies need to be considered alongside our strategies to ensure UK-based workers are better able to secure decent employment opportunities.’

A Government spokeswoman said: ‘We have a highly resilient food supply chain and well-established ways of working with the food sector to address food supply chain disruptions.

‘We recently announced a package of measures to help tackle the HGV driver shortage, including plans to streamline the process for new drivers to gain their HGV licence and to increase the number of driving tests able to be conducted.

‘However, most of the solutions are likely to be driven by industry, with progress already being made in testing and hiring, and a big push towards improving pay, working conditions and diversity.

‘We want to see employers make long-term investments in the UK domestic workforce instead of relying on labour from abroad and our Plan for Jobs is helping people across the country retrain, build new skills and get back into work.’

Several Government departments are liaising over the supply chain issues, including the Business, Energy and Industrial Strategy department, the Home Office, the Department for Transport, the Department for Education, the Department for Environment, Food and Rural Affairs, and the Department for Work and Pensions.

Home Office officials are said to be blocking the review being brought forward, amid concerns it could lead to other sectors demanding inclusion.

A source said: ‘It has been floated and seems like the obvious solution but there’s been a lot of pushback from the Home Office.’

HGV drivers are currently not included on the list but there is pressure from supermarkets to include them to help ease the shortfall while more UK drivers are trained.

The current average age of a UK HGV driver is 55 and ministers are concerned an ageing workforce needs replacing.

Government officials are working closely with the DVLA to increase the number of tests taking place and have vowed to streamline the process.

The pandemic has brought DVLA testing centres to a standstill, creating a huge backlog of drivers taking their HGV test

They have also increased funding for apprentices to get more workers into the industry but want to ensure the UK is less reliant on overseas drivers.

The shortages have hit several retailers and restaurant chains.

Nando’s saw a shortage of chickens due to a combination of not enough drivers and fewer staff working in meat factories.

Other delays have also impacted McDonald’s, which said this week it had run out of milkshakes and bottled drinks as it prioritised deliveries of other products in the interim.

Organisations from the food and drink industry have recommended a 12-month Covid recovery visa to help firms recruit staff such as HGV drivers, and an expanded seasonal worker scheme for the horticulture sector.

This graph from the Department for Transport shows how the number of goods moved and lifted and distance travelled by vehicles has varied, compared to a baseline of 2004 Q4

National Farmers Union vice president Tom Bradshaw said it was ‘simplistic’ to argue that the end of the Government’s furlough scheme will lead to an increase in workers to fill the current high number of vacancies.

It comes as stores are struggling to replenish shelves with bread and other essentials amid the escalating delivery driver shortage that threatens Christmas.

Bosses at Iceland and the Co-op say cancelled deliveries are causing the worst gaps on shelves they have ever seen.

Separately, the chairman of Tesco warned of some festive product shortages at Christmas, which could include gammons and pigs in blankets.

On Wednesday it emerged that Greggs has been unable to restock popular products. It is the latest national chain, joining McDonald’s, Nando’s, KFC, Beefeater and Subway, to warn customers about shortages of key ingredients and products.

The supply of popular Christmas products is likely to be hit by labour and shipping problems

Deliveries of bread, milk and fresh produce to supermarkets and convenience stores have been disrupted, while supplies of canned and bottled drinks are rationed in some areas.

Quarter of food and hospitality firms are hit by low stock levels 

More than a quarter of food and hospitality firms have been hit by low stock levels in recent weeks as Britain’s mounting supply chain crisis takes it toll, according to new figures.

The Office for National Statistics (ONS) said its recent business survey found that 27 per cent of food and accommodation firms have reported lower than normal stock levels – the worst-hit of all the sectors.

Low stock levels were also reported by 23 per cent of manufacturers and 25 per cent of firms in the wholesale and retail trade, repair of motor vehicles and motorcycles industry. 

The latest ONS fortnightly business poll revealed that firms across the UK have been struggling to get hold of materials, goods and services.

More than one in seven construction firms – 15.4 per cent – said they have not been able to get the materials they need in recent weeks, while 9 per cent of hospitality firms also reported the same issue.

Nearly one in five manufacturing firms – 18.4 per cent – have had to change suppliers or find alternative ways to get materials, goods or services, with 16.5 per cent of construction firms and 11.4 per cent of food and hospitality companies reporting the same, according to the ONS.

It found less than half of builders and hospitality firms said they had been able to source all the materials, goods and services they needed without issues – at 42.1 per cent and 46.2 per cent respectively.

Just over half of manufacturers – 51.4 per cent – said they were able to get hold of the materials and goods they needed in the survey between July 26 and August 8.

Haulage and retail industry leaders had called on the Government to take urgent action amid fears that crucial Christmas deliveries will be disrupted.

They argue that HGV drivers should be added to a list of essential and skilled workers so people from the EU can be given visas and allowed into the country to keep food on plates.

The managing director of Iceland, Richard Walker, said it is ‘criminal’ that drivers are not eligible for these visas, yet they are available to visiting ballerinas and concert pianists.

He warned the delivery disruption is ‘impacting the food supply chain on a daily basis’.

He said: ‘Things like bread and other fast moving lines are being cancelled in about 100 stores per day, soft drinks are 50 per cent less in terms of volume. So it is having an effect at shelf.’ Mr Walker admitted that some stores are selling out of bread and then struggling to replenish the shelves.

‘We have a lot of goods to transport between now and Christmas and a strong supply chain is vital for everyone,’ he said.

‘The reason for sounding the alarm now is that we have already had one Christmas cancelled at the last minute, and I would hate this one to be problematic as well.’

Mr Walker told the BBC’s Today programme: ‘It is a self-inflicted wound caused by the Government’s failure to appreciate the importance of HGV drivers as skilled workers.

‘On the skilled worker list are ballerinas and concert orchestra musicians, but not HGV lorry drivers — so let’s add them. It’s criminal that they are not on the list.’

Tesco chairman John Allan backed the idea of giving EU drivers visas to help keep Britain moving. ‘The best and most straightforward solution would be for the industry to bring in skilled drivers from elsewhere,’ he said.

Looking ahead to Christmas, he said: ‘We are running very hard just to keep on top of existing demand and there isn’t the capacity to build the stocks we would like to see.

‘So in that sense I think there may be some shortages at Christmas. But again I wouldn’t want to over-dramatise the extent to which that would be the case.’

Steve Murrells, chief executive of the Co-operative Group, said the ongoing food shortages ‘are at a worse level than at any time I have seen’.

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