Brexit decisions are worsening Britain’s fuel and food shortages

Specifically, the form of Brexit pursued by the UK government – which introduced strict immigration policies and pushed the UK out of the EU market for goods and energy, making it much more difficult for UK companies to hire European workers and much more expensive for them to do business with make the country’s largest trading partner.

The UK government’s post-Brexit immigration system should reduce the number of unskilled workers entering the UK and reduce what the government describes as “the country’s dependence on cheap, low-skilled labor”. despite a domestic unemployment rate in the US quit area of ​​only 5%.

“Ultimately, the government made a policy choice to make immigration more difficult for low-skilled people,” said Joe Marshall, senior researcher at the Institute for Government, an independent think tank. “The labor shortage might have been less severe if the UK had maintained free movement after Brexit,” he added.

Britain had a record 1 million jobs between June and August, according to the Bureau of National Statistics. Restaurants, pubs and supermarkets, including Nando’s, had to temporarily close some locations last month due to staff shortages or because certain ingredients were not delivered due to fewer truck drivers.

According to Care England, which represents independent providers, the adult social care sector is also facing an “employment crisis” and is having to recruit foreign workers to fill tens of thousands of jobs.

The tightened supply chain constraints caused by Brexit mean UK consumers face rising food and energy bills while unwinding measures in support of the pandemic, including government support for wages and a weekly increase in Social Security payments of £ 20 (US $ 27).

Chronic labor shortage

This week, the UK government was forced to partially withdraw its strict post-Brexit immigration policy after thousands of gas stations dried up over the weekend and grocery retailers warned the country had only 10 days to “save Christmas”.

In an interview with broadcasters on Tuesday, Transport Secretary Grant Shapps admitted that Brexit “will undoubtedly have been a factor” in the fuel supply crisis.

To ease the pressure, the government will issue temporary visas to 10,500 foreign truck drivers and workers in the poultry industry. Industry groups say the measure won’t make much of a difference, however, in part because it is unclear whether EU workers want to return to a country that has become more hostile to their presence.

UK Chamber of Commerce President Ruby McGregor-Smith said that even if short-term visas hit the maximum number allowed, “it will not be enough to address the scale of the problem that is now developing in our supply chains”. She likened it to “throwing a thimble of water on a campfire.”

The British military is now on standby for fuel deliveries as the British Medical Association warned health care workers, including ambulance drivers, cannot do their jobs because the pumps are draining, despite the Petrol Retailers Association on Tuesday saying it ” Early signs that the pump crisis is coming to an end. “

Vehicles are seen outside a petrol station in London on September 27th.

The driver shortage was exacerbated by Brexit, which resulted in tens of thousands of EU citizens leaving truck and other jobs in the UK. Johnson’s decision to end free movement of workers after Brexit has also made it difficult for Europeans who returned to their homes during the pandemic to return.

While many have a right to stay in Britain, They felt “quite unwelcome” about Brexit, said L. Alan Winters, founding director of the UK Trade Policy Observatory at the University of Sussex.

“Covid was just the straw that broke the camel’s back, in the sense that it has just become less pleasant here [for EU workers],” he added.

The brain drain is a major problem for many sectors that have relied on steady labor flows over the four decades of EU membership.

“The supply of EU labor has ceased with no clear roadmap for how this transition would be accomplished without disrupting services and supply chains,” said McGregor-Smith. “A controlled transition with a plan agreed between government and business should have existed from the start.”

A recent report by Grant Thornton commissioned by the food and beverage industry estimates that there are more than 500,000 open positions across the industry.

Farms and food processors are forced to cut production or simply have crops destroyed because they do not have enough workers. This leads to reduced product ranges in supermarkets and sometimes empty shelves.

Empty shelves are seen in a supermarket in Manchester, UK on September 22nd.

“The labor crisis is a Brexit issue that has been widely reported across the food and beverage sector,” Richard Griffiths, chairman of the British Poultry Council, said in a statement last month.

According to Nick Allen, CEO of the British Meat Processors Association (BMPA), many farmers simply did not raise turkeys in the run-up to Christmas because the labor supply was so uncertain.

“There will be a shortage [of turkeys]”Allen told CNN Business, adding that other Christmas favorites like ham and pork in blankets (bacon-wrapped sausages) are also likely to be in short supply.”

Britain rescues an American company to prevent a food crisis

Data from Adimo, a shopping technology platform that tracks consumer interest in 300 brands, shows the percentage of products out of stock in UK supermarkets is hitting the March 2020 level when shoppers panicked buying when the coronavirus Cases increased.

The company predicts UK shoppers will experience worse food shortages by early December than they did at the height of the pandemic last year.

Alcohol, dairy, meat and frozen foods will be hardest hit, according to Richard Kelly, CEO of Adimo. “A lack of choice and rising supply chain costs will all affect the price customers pay for their weekly or Christmas store,” added Kelly.

Rising wages on farms and in food processing plants to attract more British workers will eventually lead to higher prices too, Allen said. “We all want a high-wage economy … but someone has to pay for it.”

Energy crisis

Rising food prices are one reason the UK is grappling with spikes in natural gas and electricity bills, driven in part by cold spring temperatures earlier this year, rising demand from China and lower supply from Russia.

Rising energy prices are also a problem in Europe. In the UK, however, the situation is particularly acute as the supply shortage is due to the lack of large Natural gas storage, delayed maintenance and a fire that paralyzed a power cable from France.

Earlier this month, skyrocketing gas prices caused a major US fertilizer maker to cease production in the UK, cutting off most of the country’s carbon supplies to the food and beverage industry. The gas is used to stun animals for slaughter and in packaging to extend the shelf life of fresh, refrigerated and baked goods and in the production of carbonated beverages.

Europe pays record prices for energy.  A winter crisis threatens

None of these problems can be blamed on Brexit, but the minimalist EU trade agreement that Johnson signed last December leaves Britain alone through the current crisis because it does not include an energy deal. This meant that the UK left the EU internal energy market on December 31, 2020.

“There is no such close cooperation [between the United Kingdom and European Union] on security of [energy] “said Lilah Howson-Smith, senior associate at Global Counsel, a policy advisory firm, adding less leverage to the UK government to address current challenges.

These include access to storage facilities and solidarity among EU member states that contribute to security of supply, according to a 2016 report commissioned by National Grid, a utility company, which found exiting the internal energy market was driving UK energy bills could skyrocket up to £ 500 million ($ 677.8 million) a year.

“Although uncertain, the effects of Brexit on the UK energy system are very likely to be negative,” the report said.

Economists are already warning that sustained inflation, driven by labor shortages, tight supply chains and rising energy costs, will weigh on UK growth and increase inflation, which has now reached its highest level in more than two decades.

The UK economy remains 2.1% smaller than it was before the pandemic, and Berenberg economists recently postponed their full recovery forecast to Q2 2022.

By comparison, S&P Global Ratings expects Europe to reach pre-crisis GDP levels this year, a quarter earlier than previously forecast, suggesting that the divergent developments in the UK and EU economies are already in growth and growth Investments have been visible since the Brexit referendum in 2016 and should continue.

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