This morning I visited the Grange on Grange Park to hear all about their latest work. Whilst there I popped in to their farm shop for some fresh vegetable grown on their farm. Well worth a visit to see what seasonal veg they have on offer.
You will be familiar with what is now a cliché that somewhere a butterfly flaps its wings in a rainforest and an iceberg collapses as a consequence. That would seem to be the case with a relatively small news story that supplies to a small number of BP garages might be delayed a few days as BP restructured its tanker crew.
Before long, queues for petrol here on the Fylde grew and grew. Whilst slowly returning to normal (I passed seven functioning petrol stations between home and Preston this morning), these events are a good opportunity to reflect on some of the challenges we currently face – some global, some domestic.
Finger pointing and blaming the public, the Government, Brexit or the Chinese doesn’t really get us far. Queues at petrol stations are caused by different factors to rising gas prices, just as what trimmings will go with your turkey depends on a different set of requirements to your lengthy wait for the builder to fit you in. Indeed, as the industry points out, there will be pigs-in-blankets for Christmas, but maybe only 2 or 3 choices rather than 5 luxury ones. A lack of CO2 because of global gas prices and too few meat processors has meant a focus on the basic cuts of meat, not the complex high-end product.
Understanding the causes is more useful than just observing and deploring the symptoms we see on the media. Take fuel. We don’t have a fuel shortage, and a few companies had insufficient drivers for their just-in-time supply chain. But with two weeks demand compressed into one weekend, it is no wonder queues formed.
More widely, our pool of HGV drivers has been shrinking for too long, like the rest of the EU. It is a 99% male workforce, with an average age over 50. It takes sacrifices to do it – being away from home and family, putting up with second class services, and treated like second class citizens at motorway service areas. I often pass a HGV parked up at laybys on the A585 and Norcross Lane – evidence of inadequate provision by the sector in the wellbeing of drivers. Government and industry need to work together to improve conditions so that more will want to stay in the sector. Its no wonder half of those with a current HGV license are not working in the sector.
Consider also what the surge towards online shopping has meant for the logistics sector. All those extra supermarket and Amazon delivery vans have needed to recruit drivers who might otherwise have been driving lorries for those sectors only just restarting.
We are seeing what you might call ‘the great adjustment’. Some if it a consequence of Brexit, some of it covid. But it is all mixed in together, and different people will allocate the blame to one or the other depending on their point of view, and it will be hard to prove either wrong.
One adjustment directly attributable to Brexit is that we are moving away from a low-wage economy where free movement within the EU acted as a pressure valve for labour shortages. As East European wages caught up with British wages, this was already a diminishing phenomenon before Brexit, since Poles could earn more in Poland now than they could here.
Not every industry has prepared for this, hence the standard complaint we hear that such-and-such an occupation should be added to the shortage list allowing for increased immigration to meet those needs. As a short-term sticking plaster, we may still have too. But we need to work with these sectors to determine how those trained here in the UK can take up these roles before we look abroad. It can be done – as Rail Minister I sought to transform driver training by setting up a pipeline to deliver new drivers for the years to come, improved state-of-the-art training facilities with top of the range simulators, and addressed the gender balance so that women form over a third of the train driver workforce compared with just 1% of HGV drivers.
This is the point the Prime Minister has been making all week at party conference. You might argue that industries had six years to prepare for this by restructuring their recruitment. But whether that is the case or not, we’re trying to do it at shorter notice in a post-pandemic world – and that is much harder. Higher wages don’t necessarily lead to higher economic growth either – they can also lead to inflation which fuels higher wages still, but where the economy doesn’t grow. WE also need productivity growth, which means firms investing in new technology. The Chancellor has spent the week making announcements on this which are probably the most important (but least reported) news coming out of the conference.
So we need to be careful. As someone who believes in free trade, I don’t want a situation where the ‘cheap food’ that the global market has given us for several centuries breaks down, and we have to rely solely on what we produce here. And cheap never did, nor need it, mean less nutritious.
One thing which is clear is that the world is having a stop-start recovery from covid. Differing parts of the world saw their economies restart (and stop again) at different times. Global supply chains sputtered. Our Government can no more dictate which Chinese province with port facilities has a temporary Covid lockdown than it can determine the weather.
But locking down one Chinese province might cause a microchip shortage as the rare earths required for their manufacture can’t be mined, which means that car makers can’t make new cars, and so second-hand cars become more costly. Another coastal province might have a lockdown which shuts down a mega-port, and if that happens at the same time as the Suez Canal gets blocked, then container ships containing goods we take for granted can be neither unloaded nor loaded as the global shipping network grinds to a halt. The costs of shipping a container of manufactured goods from China to Europe has gone up fivefold. More container ships are circulating in the South China Sea waiting to unload than currently at sea.
Each time we start or stop, we have costs and delays. Think of local pubs stocking and restocking without much certainty each time we went in and out of lockdown. It took time and it cost them money they had to recoup.
And yes – we could make more of what we need here in the UK. As ‘just in time’ supply chains become ‘just in case’, we will see more reshoring of capacity. But given low wages and low manufacturing costs elsewhere, much that we take for granted will still come from elsewhere. We won’t be growing oranges here in the UK any time soon, for example.
We have always been a trading nation. Its why ‘commerce’ took off here in Europe first, why we were at the forefront of the Industrial Revolution and the motor that drove the growth of Empire. Global Britain is always going to be trading Britain, importing as well as exporting.
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