Haulage industry bosses have told MPs that the shortage of lorry drivers and resulting crisis in the supply chain is not improving despite measures introduced by the government to try and alleviate the problems.
Duncan Buchanan, director of policy at the Road Haulage Association, also strongly criticised the recently-announced 5,000 three-month visas for foreign drivers saying “if you were designing a visa system to fail, you would design it something like this”.
Image: Hospitality firms were said to be experiencing inflation of 14-18%
His warning came alongside others from recruitment and food services industry bosses appearing before the business, energy and industrial strategy select committee.
All three pointed to structural problems in the labour market which have contributed to the crisis.
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The Office for National Statistics published figures on Tuesday which show that HGV driver numbers have fallen by 53,000 over the past four years.
Nearly 50% of importing businesses have experienced changes in transportation costs as a result.
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Mr Buchanan told the select committee that “things are very challenged at the moment”.
“Things are not visibly getting better at this stage, and I know there are a number of measures that have been put in place, stepping up training, stepping tests, but on the ground that isn’t having much of an effect,” he added.
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Labour shortage squeezes food supply chain
The government has introduced a variety of measures to try and alleviate the problem including 5,000 three-month visas for non-UK drivers and training for 4,000 more British workers to become HGV drivers.
Mr Buchanan was particularly critical of the visa proposal saying a year would be more attractive to foreign workers.
“People aren’t sitting around doing nothing, waiting for visas to come up to go to a different country, work for three months, disrupt their lives, get stuck in the UK over Christmas,” he said.
Last week, plans were announced for a change to cabotage rules which govern how many deliveries foreign drivers can make in the UK within one trip.
It will mean they are allowed to make unlimited journeys within two weeks of arriving.
Mr Buchanan said this would have “zero impact” on alleviating the crisis and would serve to undermine the improving wages and conditions of British drivers.
He added however that people should not panic as most of these pressures were being felt by businesses and not being passed on to consumers.
These sentiments were echoed by the head of the Food and Drink Federation.
Image: An industry boss said changing cabotage rules would have zero impact on alleviating the crisis
Ian Wright said that while there is no shortage of food there have been problems with getting some products to the shelves.
He also warned that fixing these issues could take time.
“If I said it was going to go on forever, that would be ridiculous, but these issues are structural,” he said, adding that “if it is structural it will go on for quite a long time”.
He also said that he was particularly concerned with inflation and the fact that labour shortages could continue to push prices up.
“In hospitality, inflation is running between 14% and 18%, which is terrifying,” Mr Wright said.
Neil Carberry, chief executive of the Recruitment and Employment Confederation added that labour shortages in the UK are “uniquely sharp” compared with other countries and suggested that “snobbery” in policy-making has contributed.
He suggested that visa policy should be more focused on the workers that are needed, such as in haulage.
Downing Street said the supply chain crisis was discussed in Cabinet on Tuesday morning.
The prime minister reiterated that supply chain pressures are being experienced globally as the world emerges from the pandemic and that the UK is transitioning to a high wage, high productivity economy.
A government spokesperson said: “We have already taken immediate action to increase the supply of HGV drivers, streamline the testing process and improve working conditions.
“We will continue to work with the sector to alleviate the challenges facing the industry.”
Donald Trump has announced a 10% trade tariff on all imports from the UK – as he unleashed sweeping tariffs across the globe.
Speaking at a White House event entitled “Make America Wealthy Again”, the president held up a chart detailing the worst offenders – which also showed the new tariffs the US would be imposing.
“This is Liberation Day,” he told a cheering audience of supporters, while hitting out at foreign “cheaters”.
He claimed “trillions” of dollars from the “reciprocal” levies he was imposing on others’ trade barriers would provide relief for the US taxpayer and restore US jobs and factories.
Mr Trump said the US has been “looted, pillaged, raped, plundered” by other nations.
Image: Pic: AP
His first tariff announcement was a 25% duty on all car imports from midnight – 5am on Thursday, UK time.
Mr Trump confirmed the European Union would face a 20% reciprocal tariff on all other imports. China’s rate was set at 34%.
The UK’s rate of 10% was perhaps a shot across the bows over the country’s 20% VAT rate, though the president’s board suggested a 10% tariff imbalance between the two nations.
It was also confirmed that further US tariffs were planned on some individual sectors including semiconductors, pharmaceuticals and critical mineral imports.
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Trump’s tariffs explained
The ramping up of duties promises to be painful for the global economy. Tariffs on steel and aluminium are already in effect.
The UK government signalled there would be no immediate retaliation.
Business and Trade Secretary Jonathan Reynolds said: “We will always act in the best interests of UK businesses and consumers. That’s why, throughout the last few weeks, the government has been fully focused on negotiating an economic deal with the United States that strengthens our existing fair and balanced trading relationship.
“The US is our closest ally, so our approach is to remain calm and committed to doing this deal, which we hope will mitigate the impact of what has been announced today.
“We have a range of tools at our disposal and we will not hesitate to act. We will continue to engage with UK businesses including on their assessment of the impact of any further steps we take.
“Nobody wants a trade war and our intention remains to secure a deal. But nothing is off the table and the government will do everything necessary to defend the UK’s national interest.”
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Who showed up for Trump’s tariff address?
The EU has pledged to retaliate, which is a problem for Northern Ireland.
Should that scenario play out, the region faces the prospect of rising prices because all its imports are tied to EU rules under post-Brexit trading arrangements.
It means US goods shipped to Northern Ireland would be subject to the EU’s reprisals.
The impact of a trade war would be expected to be widely negative, with tit-for-tat tariffs risking job losses, a ramping up of prices and cooling of global trade.
Research for the Institute for Public Policy Research has suggested more than 25,000 direct jobs in the UK car manufacturing industry alone could be at risk from the tariffs on car exports to the US.
The Society of Motor Manufacturers and Traders (SMMT) had said the tariff costs could not be absorbed by manufacturers and may lead to a review of output.
The tariffs now on UK exports pose a big risk to growth and the so-called headroom Chancellor Rachel Reeves was forced to restore to the public finances at the spring statement, risking further spending cuts or tax rises ahead to meet her fiscal rules.
A member of the Office for Budget Responsibility (OBR), David Miles, told MPs on Tuesday that US tariffs at 20% or 25% maintained on the UK for five years would “knock out all the headroom the government currently has”.
But he added that a “very limited tariff war” that the UK stays out of could be “mildly positive”.
He said: “There’s a bit of trade that will get diverted to the UK, and some of the exports from China, for example, that would have gone to the US, they’ll be looking for a home for them in the rest of the world.
“And stuff would be available in the UK a bit cheaper than otherwise would have been. So there is one, not central scenario at all, which is very, very mildly potentially positive to the UK. All the other ones which involve the UK facing tariffs are negative, and they’re negative to very different extents.”
Mature, developed economies like the UK and US became ever more reliant on cheap imports from China and, in the process, saw their manufacturing sectors shrink.
Large swathes of the rust belt in the US – and much of the Midlands and North of England – were hollowed out.
And to some extent that’s where the story of Donald Trump’s “Liberation Day” really began – with the notion that free trade and globalisation had a darker side, a side he wants to remedy via tariffs.
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He imposed a set of tariffs in his first term, some on China, some on specific materials like steel and aluminium. But the height and the breadth of those tariffs were as nothing compared with the ones we have just heard about.
Not since the 1930s has the US so radically increased the level of tariffs on all nations across the world. Back then, those tariffs exacerbated the Great Depression.
It’s anyone’s guess as to what the consequences of these ones will be. But there will be consequences.
Consequences for the nature of globalisation, consequences for the US economy (tariffs are exceptionally inflationary), consequences for geopolitics.
Image: Imports from the UK will face a 10% tariff, while EU goods will see 20% rates. Pic: Reuters
And to some extent, merely knowing that little bit more about the White House’s plans will deliver a bit of relief to financial markets, which have fretted for months about the imposition of tariffs. That uncertainty recently reached unprecedented levels.
But don’t for a moment assume that this saga is over. Nothing of the sort. In the coming days, we will learn more – more about the nuts and bolts of these policies, more about the retaliatory measures coming from other countries.
We will, possibly, get more of a sense about whether some countries – including the UK – will enjoy reprieves from the tariffs.
To paraphrase Churchill, this isn’t the end of the trade war, or even the beginning of the end – perhaps just the end of the beginning.
Heathrow bosses were warned its power supply was vulnerable less than a week before a major outage, and a terminal could have got some flights moving by mid-morning rather than being shut for a day, a committee of MPs has heard.
The chief executive of Heathrow Airline Operators’ Committee Nigel Wicking told MPs of the Transport Committee he raised issues about resilience on 15 March after cable and wiring theft took out lights on a runway.
Mr Wicking said he believed Heathrow’s Terminal 5 could have been ready to receive repatriation flights by “late morning” on the day of the closure, as “there was opportunity also to get flights out”.
A fire at an electricity substation in west London meant the power supply was disrupted to Europe’s largest airport for a day – causing travel chaos for nearly 300,000 passengers, the committee heard.
“I’d actually warned Heathrow of concerns that we had with regard to the substations and my concern was resilience”, said Mr Wicking, the head of a body representing more than 90 airlines using Heathrow Airport.
“So the first occasion was to team Heathrow director on the 15th of the month of March. And then I also spoke to the chief operating officer and chief customer officer two days before regarding this concern.
“And it was following a number of, a couple of incidents of, unfortunately, theft, of wire and cable around some of the power supply that on one of those occasions, took out the lights on the runway for a period of time. That obviously made me concerned.”
Other problems
The biggest challenge was getting information, Mr Wicking said.
The desire for information on the outage and closure was so large that a Teams call on the day of the closure was “maxed out” with “a thousand participants”, he added.
However, Heathrow chief executive Thomas Woldbye said keeping the airport open during last month’s power outage would have been “disastrous”.
There was a risk of having “literally tens of thousands of people stranded in the airport, where we have nowhere to put them”, Mr Woldbye told MPs.
Fire surveillance and CCTV systems were down as a result of having limited electricity, he added, meaning it would not have been safe to reopen.
‘The most expensive airport in the world’
Heathrow should have top quality infrastructure and service, Mr Wicking said.
“It is the most expensive airport in the world with regard to passenger challenges. So from our perspective, that means we should actually have the best service. We should have the best infrastructure,” he added.
Image: Aerials show burned substation which shut Heathrow Airport
A review on resilience at Heathrow was done in 2018, he told MPs, but was told it was “not for sharing” with airlines.
“I think it is for sharing now because frankly, we’re paying enough”, Mr Wickling said he told Mr Woldbye.
“I don’t feel that we should be paying more attention for further resilience. The resilience should have been there in the first place.”