HGV driver crisis ‘not visibly getting better at this stage’ industry bosses warn
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”.
He forecasted that the problems being experienced could last a year.
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.
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.
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.
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.”
Business
Donald Trump tells UK to ‘get rid of windmills’ and says raising windfall tax on North Sea oil is ‘big mistake’
Donald Trump has said the UK is making “a very big mistake” in its fossil fuel policy – and should “get rid of windmills”.
In a post on Friday on his social media platform, Truth Social, Mr Trump shared news from November of a US oil producer pulling out of the North Sea, a major oil-producing region off the Scottish coast.
“The UK is making a very big mistake. Open up the North Sea. Get rid of windmills!”, the US president-elect wrote.
The Texan oil producer Apache said at the time it was withdrawing from the North Sea by 2029 in part due to the increase in windfall tax on fossil fuel producers.
North Sea oil rig. Pic: Reuters
The head of Apache’s parent company APA Corporation said in early November it had concluded the investment required to comply with UK regulations, “coupled with the onerous financial impact of the energy profits levy [windfall tax] makes production of hydrocarbons beyond the year 2029 uneconomic”.
Chief executive John Christmann added that “substantial investment” will be necessary to comply with regulatory requirements.
Mr Trump used a three-word campaign pledge “drill, baby, drill” during his successful election campaign, claiming he will increase oil and gas production during his second administration.
In the October budget announcement, UK Chancellor Rachel Reeves raised the windfall tax levied on profits of energy producers to 38%.
Called the energy price levy, it is a rise from the 25% introduced by Rishi Sunak in 2022 as energy prices soared following Russia’s invasion of Ukraine.
Many oil and gas businesses reported record profits in the wake of the price hike.
The tax was intended to support households struggling with high gas and electricity bills amid a broader cost of living crisis.
Apache is just one of a glut of firms that made decisions to alter their North Sea extraction due to the Labour policy.
Read more
Business, the economy and the pound in your pocket – what to expect from 2025
Energy bills become more expensive
Even before the new government was elected, three companies, Jersey Oil and Gas, Serica Energy and Neo Energy – announced they were delaying, by a year, the planned start of production at the Buchan oilfield 120 miles to the north-east of Aberdeen.
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