Panic buying of fuel – business news 27 September 2021
James Salmon, Operations Director.
Over 10,000 temporary visas offered to hauliers and poultry workers amid panic buying of fuel. Insolvency specialist expects business to boom. Seven in 10 workers are back in the office. Growth expected to be lower than predicted. And more business news.
Over 10,000 temporary visas offered to hauliers and poultry workers amid panic buying of fuel.
The Government has confirmed that 10,500 temporary UK visas will be offered to foreign workers in an attempt to alleviate Britain’s lorry driver shortage. Transport Secretary Grant Shapps said 5,000 fuel tanker and food lorry drivers will be eligible to work in the UK for three months, until Christmas Eve, with the scheme also extended to 5,500 poultry workers. Additionally, ministers are to write to almost a million drivers who hold an HGV licence, encouraging them back into the industry. The letter will set out the steps the haulage sector is taking to improve industry conditions, including increased wages, flexible working and fixed hours, according to the Department for Transport. Mr Shapps said: “We are acting now, but the industries must also play their part with working conditions continuing to improve and the deserved salary increases continuing to be maintained in order for companies to retain new drivers.”
A decision by BP to begin rationing fuel to its forecourts due to lorry driver shortages sent drivers into a panic on Friday, with petrol stations running out amid panic buying of fuel, while the British Retail Consortium cautioned that, if the crisis was not addressed in the next 10 days, there would be “significant disruption” at Christmas
The BBC has been accused by Tory MP Iain Duncan Smith of skewing its reporting to blame the HGV driver shortage on Brexit. He said: “The BBC insists on making this about Brexit and pretending that this is a problem confined to the UK.” He continued: “This is a Covid issue affecting not just the whole of Europe but the world.” The Sunday Times notes also that the extension in April of IR35, tax rules on freelance workers who are contracted through a limited company to private sector firms, is also thought to have contributed to the shortage of lorry drivers. That has driven up the cost of employing drivers and reduced margins for hauliers and freelances.
On Monday morning it was reported that Boris Johnson was considering calling in the Army to help distribute petrol supplies to stations. The government will also temporarily drop competition rules and allow haulers, producers, suppliers and retailers to work together.
CBI chief: Practical approach to worker shortages needed
Tony Danker, the director general of the Confederation of British Industry (CBI), has urged ministers to take a “practical” approach to addressing labour shortages and plugging gaps in the workforce. He told BBC Breakfast: “Everybody accepts that what we need to do is change our skill system and think about the structure of the workforce … and start to build a pipeline of workers at good wages over time”. He warned: “But you can’t turn round when there are shortages, fold your arms as some Government ministers have done, and say: ‘Well, just put up wages and it will sort it’,” adding: “It won’t sort it, you can’t turn baggage handlers into butchers overnight or shopkeepers into chefs”. Mr Danker also called for a “temporary and managed” system to bring in foreign labour.
Starmer calls for visas for 100k foreign lorry drivers
Sir Keir Starmer has called for 100,000 foreign lorry drivers to be granted visas to come to the UK, with this coming amid reports that the shortfall of drivers exceeds 90,000. While ministers have announced a temporary visa scheme that will see 5,000 HGV drivers allowed to take up employment in the UK until Christmas Eve, Labour leader Sir Keir said: “’We are going to have to bring in more drivers and more visas”. Arguing that the Government was guilty of a “complete lack of planning”, Sir Keir said that “for a long time we have known there is a problem”.
Insolvency specialist expects business to boom
Insolvency and restructuring group Begbies Traynor expects business to boom over the next three months as more companies face going bust after pandemic support measures are withdrawn. October will see furlough and business rates relief end while other measures such as protection from creditors seeking winding up orders will be scaled back before coming to an end on March 31, 2022. Executive chairman Ric Traynor said: “The insolvency market has been suppressed over the past 18 months due to Government support measures. However, since May the Insolvency Service has reported month-on-month increases in insolvency appointments nationally. We expect this trajectory will continue as the support measures are progressively removed.”
Seven in 10 workers are back in the office
Research from the Office for National Statistics (ONS) shows 70.1% of UK workers are back in the office as the surge back to pre-pandemic working practices accelerates. The figures come as the Government introduced new legislation giving employees the right to request flexible working from the first day of employment. This, says City investor Andrew Monk, is an error as he believes people are less productive when they work from home.
Growth expected to be lower than predicted
Economists have downgraded expectations of UK GDP growth as the country grapples with staff shortages, flagging demand, and rising costs. Martin Beck, senior economic adviser to the EY ITEM Club, said: “We were bullish in our last forecast in July, we had full-year growth at 7.6%, but that will probably be knocked back down. Hopefully that will be offset by stronger growth next year. But that said, we’ll still see a strong recovery this year because the hole we were in last year was so deep.” Elsewhere, IHS Markit chief business economist Chris Williamson said the risks are tilting in the direction of lower-than-expected growth. “Most people have downgraded their fourth quarter forecasts because of the loss of economic momentum. Supply constraints could subdue growth for some time,” he added.
Technology and fast broadband vital for small companies
A report from Mastercard reveals that small businesses in the South West suffer the poorest broadband performance in England. The East Midlands, West Midlands and the South East of England achieved the highest scores. The survey by the credit card company also identified how technology was used effectively in different areas of a business, with 70% saying their use of technology in finance and accounting was ”good” or “very good”. Over 40% of small businesses said they would not have stayed afloat during the pandemic without digital tools. A further 47% think technology will become more important to their company’s success over the next five years, while 45% said it had already helped them bolster their customer base. A third said technology had helped them increase their profits.
Chilled food distributor collapses
Private equity-backed haulage firm EVCL Chill, which specialises in chilled food deliveries to Asda and Sainsbury’s, has filed for administration. EVCL Chill, a subsidiary of EV Cargo, was responsible for delivering 10,000 pallets of food and drink a day into the two retailers, who according to The Grocer have been in talks with administrator PwC for several weeks in a bid to safeguard a significant proportion of their chilled operations.
PwC has said the collapse of chilled food distributor EVCL Chill had been hastened by the shortage of HGV drivers and the loss of a number of key customers over the past year. Some 658 workers have been transferred to customers along with a number of services, leaving 434 jobs at risk across its warehouses and depots. Eddie Williams, joint administrator, said: “This has been a very difficult situation and involved intense discussions with key stakeholders on an accelerated basis to get to this position. As businesses move from survival mode to recovery, the financial climate is still very volatile.”
FSB in enterprise allowance warning
The Federation of Small Businesses (FSB) has urged policymakers to rethink plans to scrap a scheme that helps people on benefits to start businesses. With the New Enterprise Allowance set to be closed down, the FSB said that with the furlough scheme coming to an end, “this is the moment to revamp and relaunch the allowance with additional funding, not shelve it”. Mike Cherry, national chairman of the FSB, said: “Many will be heading to job centres over the autumn and this could have been the moment to ignite a new generation of entrepreneurs”. He added: “Small business owners are doing all they can to recover, but they risk being derailed by unwelcome and unexpected announcements.” The allowance, which was launched in 2011, has led to 146,000 businesses being created but Work and Pensions Secretary Thérèse Coffey has recommended that it be scrapped as part of her spending submission to the Treasury.
House price rises to ease in coming years
Research by estate agency Hamptons suggests house price growth will slow over the next four years but average prices will still be 13.5% higher by the end of 2024. Aneisha Beveridge, head of research at the firm, believes a second wave of lockdown-fuelled demand will keep price growth above pre-pandemic levels over the next two years but by 2024 the average growth rate will dip to 2.5%. Hamptons believes a new “house price cycle” will start after that, saying that while historically, “the beginning of a new cycle has been synonymous with a sharp price correction”, in this instance “we’re more likely to see a continuation of modest price growth . . . rather than a boom followed by a bust.” The report also suggest UK house prices will be 4.5% higher at the end of 2021 than at the start of the year, with a rise of 3.5% forecast for 2022.
Household budgets face ‘triple-whammy’
The Resolution Foundation has warned that economic pressures could squeeze household budgets over the next six months, with the think-tank pointing to a “triple-whammy” of inflation, rising energy bills and the health and social care tax. The think-tank said low income families may be left more than £1,000 a year worse off despite an increase in the national living wage from next April. The analysis took into account the consumer prices index hitting 4%; increased energy bills with a 12% increase in the energy price cap due next month and a further projected 19% rise in six months; October’s Universal Credit (UC) cut; and the 1.25% Health and Social Care Levy that comes into force in April. Karl Handscomb, a senior economist at the Resolution Foundation, said upholding the £20 a week UC bonus would “go a long way towards easing the coming cost-of-living squeeze”.
BoE warned over ‘Pandora’s Box of inflation’
Ruth Sunderland in the Daily Mail reflects on “rampant” inflation, saying that while in the UK it has become “little more than a bad memory from the 1970s”, there is a danger that “since the volcano has been dormant for so long, the rumblings are not taken seriously enough now that it is threatening to erupt.” She says that while the Bank of England has “waved away” the threat of a return to inflation by suggesting increases are transitory effects stemming from the pandemic, it now admits the pressures are likely to be persistent. Ms Sunderland says that while the Bank’s forecast of 4% is far below highs seen in 1974, “complacency would be a grave mistake”. She notes that the policy response is higher interest rates, warning that this could be “ruinous” for some homebuyers while over-indebted companies would collapse and the Government’s borrowing would become even more expensive to service. Ms Sunderland, who notes the Bank’s mission to maintain monetary and financial stability, says the UK “cannot afford to open the Pandora’s Box of inflation.”
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