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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.

Chef Alberto Gargiulo prepares food for customers at new restaurant Pasta Evangelists
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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.

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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.

A lorry driver checks his paperwork after being processed at a customs facility in Ashford, Kent, as Channel traffic builds up following a quiet start to the year and the end of the transition period with the European Union on December 31
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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.”

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Car manufacturers fined £461m for collusion

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Car manufacturers fined £461m for collusion

Major car manufacturers and two trade bodies are to pay a total of £461m for “colluding to restrict competition” over vehicle recycling, UK and European regulators have announced.

The UK’s Competition and Markets Authority (CMA) said they illegally agreed not to compete against one another when advertising what percentage of their cars can be recycled.

They also colluded to avoid paying third parties to recycle their customers’ scrap cars, the watchdog said.

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It explained that those involved were BMW, Ford, Jaguar Land Rover, Peugeot Citroen, Mitsubishi, Nissan, Renault, Toyota, Vauxhall and Volkswagen.

Mercedes-Benz, was also party to the agreements, the CMA said, but it escaped a financial penalty because the German company alerted it to its participation.

The European Automobile Manufacturers’ Association (Acea) and the Society of Motor Manufacturers & Traders (SMMT) were also involved in the illegal agreements.

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The CMA imposed a combined penalty of almost £78m while the European Commission handed out fines totalling €458m (£382.7m).

The penalties were announced at a time of wider turmoil for Europe’s car industry.

Manufacturers across the continent are bracing for the threatened impact of tariffs on all their exports to the United States as part of Donald Trump’s trade war.

Within the combined fine settlements of £77.7m issued by the CMA, Ford was to pay £18.5m, VW £14.8m, BMW £11.1m and Jaguar Land Rover £4.6m.

Lucilia Falsarella Pereira, senior director of competition enforcement at the CMA, said: “Agreeing with competitors the prices you’ll pay for a service or colluding to restrict competition is illegal and this can extend to how you advertise your products.

“This kind of collusion can limit consumers’ ability to make informed choices and lower the incentive for companies to invest in new initiatives.

“We recognise that competing businesses may want to work together to help the environment, in those cases our door is open to help them do so.”

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Customers ‘protected’ as household energy supplier exits market

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Customers 'protected' as household energy supplier exits market

A household energy supplier has failed, weeks after it attracted attention from regulators.

Rebel Energy, which has around 80,000 domestic customers and 10,000 others, had been the subject of a provisional order last month related to compliance with rules around renewable energy obligations.

The company’s website said it was “ceasing to trade” but gave no reason.

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Industry watchdog Ofgem said on Tuesday that those affected by Rebel’s demise did not need to take any action and would be “protected”.

Customers, Ofgem said, would soon be appointed a new provider under its supplier of last resort (SoLR) mechanism.

This was deployed widely in 2021 when dozens of energy suppliers collapsed while failing to get to grips with a spike in wholesale energy costs.

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The last supplier to go under was in July 2022.

Ofgem said new rules governing supplier business practices since then had bolstered resilience.

These include minimum capital requirements and the ringfencing of customer credit balances.

The exit from the market by Bedford-based Rebel was announced on the same day that the energy price cap rose again to take account of soaring wholesale costs between December and January.

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Tim Jarvis, director general for markets at Ofgem, said: “Rebel Energy customers do not need to worry, and I want to reassure them that they will not see any disruption to their energy supply, and any credit they may have on their accounts remains protected under Ofgem’s rules.

“We are working quickly to appoint new suppliers for all impacted customers. We’d advise customers not to try to switch supplier in the meantime, and a new supplier will be in touch in the coming weeks with further information.

“We have worked hard to improve the financial resilience of suppliers in recent years, implementing a series of rules to make sure they can weather unexpected shocks. But like any competitive market, some companies will still fail from time to time, and our priority is making sure consumers are protected if that happens.”

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Harrods challenges survivors’ law firm’s compensation cut

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Harrods challenges survivors' law firm's compensation cut

Harrods is urging lawyers acting for the largest group of survivors of abuse perpetrated by its former owner to reconsider plans to swallow a significant chunk of claimants’ compensation payouts in fees.

Sky News has learnt that KP Law, which is acting for hundreds of potential clients under the banner Justice for Harrods, is proposing to take up to 25% of compensation awards in exchange for handling their cases.

In many cases, that is likely to mean survivors foregoing sums worth of tens of thousands of pounds to KP Law, which says it is working for hundreds of people who suffered abuse committed by Mohamed al Fayed.

Mohamed al Fayed. File pic: PA
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Mohamed al Fayed. File pic: PA

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Under a redress scheme outlined by the London-based department store on Monday, which confirmed earlier reports by Sky News, claimants will be eligible for general damages awards of up to £200,000, depending upon whether they agree to a psychiatric assessment arranged by Harrods.

In addition, other payments could take the maximum award to an individual under the scheme to £385,000.

A document published online names several law firms which have agreed to represent Mr al Fayed’s victims without absorbing any of their compensation payments.

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KP Law is not among those firms.

Theoretically, if Justice for Harrods members are awarded compensation in excess of the sums proposed by the company, KP Law could stand to earn many millions of pounds from its share of the payouts.

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‘Many more’ likely abused by Fayed

A Harrods spokesperson told Sky News on Tuesday: “The purpose of the Harrods Redress Scheme is to offer financial and psychological support to those who choose to enter the scheme, rather than as a route to criminal justice.

“With a survivor-first approach, it has been designed by personal injury experts with the input of several legal firms currently representing survivors.

“Although Harrods tabled the scheme, control of the claim is in the hands of the survivors who can determine at any point to continue, challenge, opt out or seek alternative routes such as mediation or litigation.

“Our hope is that everyone receives 100% of the compensation awarded to them but we understand there is one exception among these law firms currently representing survivors who is proposing to take up to 25% of survivors’ compensation.

“We hope they will reconsider given we have already committed to paying reasonable legal costs.”

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Further claims against al Fayed

Responding to the publication of the scheme on Monday, KP Law criticised it as inadequate, saying it “does not go far enough to deliver the justice and accountability demanded by our clients”.

“This is not solely a question of compensation but about justice and exposing the systematic abuse and the many people who helped to operate it for the benefit of Mohamed al Fayed and others.”

Seeking to rebut the questions raised by Harrods about its fee structure, KP Law told Sky News: “KP Law is committed to supporting our clients through the litigation process to obtain justice first and foremost as well as recovering the maximum possible damages for them.

“This will cover all potential outcomes for the case.

“Despite the Harrods scheme seeking to narrow the potential issues, we believe that there are numerous potential defendants in a number of jurisdictions that are liable for what our clients went through, and we are committed to securing justice for our client group.

“KP Law is confident that it will recover more for its clients than what could be achieved through the redress scheme established by Harrods, which in our view is inadequate and does not go far enough to compensate victims of Mr al Fayed.”

The verbal battle between Harrods and KP Law underlines the fact that the battle for compensation and wider justice for survivors of Mr al Fayed remains far from complete.

The billionaire, who died in 2023, is thought to have sexually abused hundreds of women during a 25-year reign of terror at Harrods.

He also owned Fulham Football Club and Paris’s Ritz Hotel.

Harrods is now owned by a Qatari sovereign wealth fund controlled by the Gulf state’s ruling family.

The redress scheme commissioned by the department store is being coordinated by MPL Legal, an Essex-based law firm.

Last October, lawyers acting for victims of Mr al Fayed said they had received more than 420 enquiries about potential claims, although it is unclear how many more have come forward in the six months since.

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