The last two years have seen many countries deal with supply shortages in supermarkets with citizens panic-buying essentials such as toilet paper and pasta during the COVID-19 crisis. For the most part, global supply chains have recovered and few countries continue to face significant shortages. The United Kingdom, however, despite her economic prowess and global influence continues to be plagued by shortages.  The UK is currently facing a major disruption to its energy supply which has led Britons to panic buy fuel at gas stations. The government has blamed the pandemic and staggered global recovery for supply shortages and is now confronting the aftermath and long-term implications of its initial response.

Policy Responses

         The UK government was quick to react by granting emergency visas for Heavy Goods Vehicle drivers and poultry workers to tackle shortages due to supply chain failures. In addition, a 10 million GBP effort has begun to increase testing capacity and efficiency so that new HGV drivers will be on the road to further bolster ranks being filled out by foreign drivers arriving under the visa programs. In addition, 1 million letters will be sent to Britons who hold an HGV driver license to “encourage them back in the industry.” 

Aftermath of Brexit?

         At the moment, the UK government sees this as a pandemic and recovery issue in which there is a short-term issue where demand exceeds supply. However, many industry specialists view these shortages as a symptom of another problem: Brexit. One of the goals of Brexit was to prioritize jobs within the British borders to British nationals. Following the 30th of December 2020, limitations were placed on the UK employer’s ability to recruit cheap European labour, significantly disrupting the existing demographics of  the UK labour force. The supply chain disruption due to COVID-19 amplified the crisis surrounding the supply shortages. Political leaders such as Keir Starmer, leader of the opposition, criticized the policy responses for a lack of planning given that such problems were evident once the UK had left the European Union. David Henig, an expert on British trade policy for the European Center for International Political Economy expressed similar concerns to Starmer “We had a high-flow labor economy, and we are changing to a static one.”. With a reported 20,000 HGV drivers having left the UK following the Brexit vote, the UK's urgent need for truck drivers predates the pandemic.  Business leaders who have been significantly hit by the supply crisis have nearly universally emphasized the urgency of addressing these issues and declared that emergency visas to foreign lorry drivers and food industry workers to tackle shortages “barely scratches the surface” of Britain’s supply chain crisis.

Path out of the crisis

         The current UK government argues that the long-term solution to the driver shortages lies in training more UK nationals to respect the Brexit promise of prioritizing jobs for British nationals. As stated above, there are more than a million licensed truck drivers in the country, but very few are willing to go back to working as HGV drivers. Given this lack of interest, the question British politicians most confront is: how to motivate young British citizens to enter the industry?. This position is contrary to that of private interests such as those of existing HGV drivers and business leaders who argue that worsening conditions due to Brexit, not lack of training, are to blame for the lack of drivers.

Lack of enthusiasm from British and European workers

         Interviews with former drivers such as David Carden attest to the fact that the working conditions for truckers have deteriorated  in the past several decades. Lower pay, deteriorating truck stop facilities (which often leads to drivers sleeping in their trucks), lack of rest stops, and longer hours make the job unattractive to prospective workers. After decades of neglect by the government and business leaders, HGV drivers are now being called upon to “help Britain” during the country’s time of desperate need. This call, however, comes without major improvements within the industry and thus it is unlikely to see a rise in HGV drivers within British borders.

         Clearly this feeling is shared across borders, as the emergency visa scheme has received an abysmal reception from HGV drivers all over Europe. Polish truck driver Jakub Pajka, who used to work in Britain prior to Brexit, said that a three-month visa is not good enough of a deal to persuade him to return to Britain for work. Poor additional benefits simply do not justify the challenges of moving to a different country for just 3 months, facing migrants in Calais, dangerous working conditions, and low wages.

A rise in the minimum wage to persuade workers to join the industry

         In response, Boris Johnson has announced a significant minimum wage hike (5.7% increase for over-23 years old) to try and put an end to the low wage, low growth model. This timing coincides well with the shortages the UK is currently experiencing. Johnson said that he will "not to use immigration as an excuse for failure to invest in people, in skills and in the equipment or machinery they need to do their jobs.” British nationals are clearly put at the forefront of this policy as he expressly stated that opportunities will be everywhere. By raising the minimum wage, the government hopes to motivate qualified workers to find jobs and fill the labour shortages.

The threat of expected inflation

         While Brexit promised to drastically reduce immigration and give jobs back to British nationals, the supply shortages led the UK government to grant emergency short-term visas to European truck drivers (ironically encouraging short-term immigration to the UK). The UK must adjust to its new status as independent from the European Union as it cannot rely on cheap labour from abroad anymore. While improvements to working conditions in the trucking industry and the announced minimum wage hike may help fill shortages, higher wages may also lead to inflation which wipes out the gains for workers. Only time will tell the efficacy of the government’s response as confronting these systemic economic issues involves a delicate balancing act of monetary policy. Potential trade-offs include: avoiding high inflation by keeping wages low and re-open borders to cheap labour or accepting some inflation with a raise in wages, while fighting inflation with increased interest rates which may slow down the economy. At the moment, the UK government under Johnson seems to have chosen the latter by prioritizing jobs for British citizens and continuing to restrict immigration. Emergency visas have acted as a temporary band-aid for the short-term goals of eliminating the supply shortages before Christmas time, while increased wages aim to fix supply shortages for the foreseeable future.