Post-Brexit Britain faces a difficult winter
Empty shelves that usually stock bottled water at Sainsbury’s supermarket, Greenwich Peninsular, on September 19, 2021 in London, England.
Chris J Ratcliffe | Getty Images
The U.K. has emerged from the Covid-19 pandemic to find itself faced with an onslaught of new economic crises that have left the country in “a precarious position,” experts have warned.
A perfect storm of labor shortages, skyrocketing natural gas prices and global supply chain constraints have put the country in prime position for a difficult winter. Rising demand as economies reopen has created similar problems all over the world, but economists argue that Brexit has exacerbated these issues for Britain.
Labor shortages
A lack of workers is affecting a slew of industries across the country.
Britain has an estimated shortage of 100,000 truck drivers, which haulage organizations have largely attributed to a post-Brexit exodus of EU nationals. The lack of truck drivers has disrupted deliveries, leading to empty store shelves, backlogs at ports and dry gas stations, which sparked a panic buying frenzy in September that lasted weeks.
Other sectors have also warned of deepening labor shortages that are expected to damage the availability and price of goods in the runup to Christmas.
Britain’s National Pig Association has warned that up to 120,000 pigs face being culled within weeks because of a lack of butchers and abattoir workers.
In a statement on Friday, the vice president of the U.K.’s National Union of Farmers said labor shortages across the food supply chain remained acute, while the CEO of the U.K. Warehousing Association said in September that industries including warehousing, engineering and transport were all experiencing severe worker shortages.
At the end of September, the Confederation of British Industry — which represents 190,000 businesses — said its latest data showed 70% of companies were planning pay rises in a bid to tackle labor shortages.
The U.K. government has issued thousands of temporary visas for truck drivers, butchers and agricultural workers, but some critics have argued that this is insufficient to lure foreign workers.
Risk to future growth
Riccardo Crescenzi, a professor of economic geography at the London School of Economics, expressed some skepticism about the solutions being offered by the government.
“Offering three-month [visas] might not work while the rest of the EU is booming because of the injection of resources allowed for its recovery plan,” he told CNBC in a phone call. “And there is not really an unemployment problem in the U.K., so I struggle to see where drivers would come from in the domestic economy.”
Crescenzi said it was hard to know if the issues were temporary. “Some of these shortages could become structural, and this is a problem that can seriously constrain future growth.”
Sam Roscoe, senior associate professor in operations and supply chain management at the University of Sussex, warned that shortages would persist in the U.K….
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