THERESE RAPHAEL: Boris Johnson in biggest make-or-break crisis since Brexit
Conservative government will be better off facing the elephant in the room than downplaying fuel shortages and blaming consumers
It’s not a good sign when government ministers shout on Twitter, “THERE IS NO FUEL SHORTAGE.” That’s like telling people, “Do not imagine an elephant.”
In this case, not much is left to the imagination. The UK is panicking about fuel. Up to 90% of pumps in major British cities have reportedly run dry, and the British army is on standby to drive trucks to transport fuel. The country’s competition law (which protects consumers from predatory high prices) has been suspended so that deliveries can be co-ordinated to meet demand, and the government is in talks to keep the country’s second-biggest oil refinery from collapse.
Prime Minister Boris Johnson is facing his biggest competence test since Brexit and Covid-19. Passing it will require more than the short-term fixes being mooted so far.
The fuel shortage is being driven largely by a shortage of large-vehicle drivers. That and high fuel prices are worsening other supply chain problems and provoking nervous buying by consumers. This is already leading to higher food prices, a trend that is likely to continue in the run-up to Christmas. People are wondering when essentials will be in short supply. Cue a mini-run on bottled water and other items.
Some public officials have blamed panicky consumers and industry associations for catastrophising what they say is a temporary issue. But it is never a good idea to blame the voter. Consumers are just being rational and businesses have been talking about labour shortages in the sector for some time.
Critics of the government have been quick to blame Brexit. That includes the man likely to replace Angela Merkel as the leader of Europe’s largest economy. “The free movement of labour is part of the EU,” Olaf Scholz, the Social Democratic Party leader, said on Monday. “We worked very hard to convince the British not to leave the union. Now they decided different and I hope they will manage the problems coming from that.”
Schadenfreude aside, Scholz exaggerates the Brexit effect in this case. Yes, splitting from the EU amplified supply chain problems. Delays at UK ports caused by Covid-19 and Brexit regulations have reduced the number of drivers willing to come into the country. A week ago the UK government agreed to provide support for a private US fertiliser company that is the largest supplier of carbon dioxide, to address a CO2 shortage. Northern Ireland, which is part of the EU’s single market for goods, is able to import CO2 from the EU more easily.
But skills shortages in transport have been a problem for a while. And although undeniably one culprit has been the declining net EU migration levels (and many drivers left the UK during the pandemic), there are other big issues. Those include an ageing workforce, low unemployment and difficulties attracting new candidates to a profession where the work is arduous and sometimes dangerous. The average age of a heavy goods vehicle driver is 55, with fewer than 1% under 25, says the main industry body.
Europe is facing its own driver shortages. Data from 2020 showed that Germany is short 45,000 to 65,000 drivers and Poland is short 124,000 drivers. (The key difference with the UK, though, is this has not led to gas stations running out of fuel; Europe’s labour market mobility does help there.)
So far, the British government’s response to fuel shortages has consisted of denials and shortsighted fixes, and celebrating the wage hikes in the sector as a Brexit dividend. Wage increases may be welcome, but they are unlikely to be enough to replenish the supply of drivers. Plans to issue three-month visas for up to 5,000 EU drivers assumes people will actually want to return to poorer driving conditions for a short duration. That is far from certain.
Other suggestions — such as relaxing test rules for drivers and extending driver hours — may replace one problem with another. Britain has among the toughest testing rules anywhere and that pays off in better road safety. Allowing drivers behind the wheel for 11 hours a day also sounds unsafe (a view insurers may take too). Though the ministry of defence is apparently helping to train more drivers, it will take some time to start filling the gap.
There are no easy fixes, but the government needs to look at longer-term solutions. There have been calls in the past to expand training programmes to include large-vehicle drivers. The logistics industry has asked to expand the National Skills Fund, an initiative to help adults retrain for new careers, to include heavy goods vehicle driver qualifications.
On top of these, the government could also, for a limited period, provide loans for driver training, which costs at least £4,000, that are repayable out of income following employment.
There is certainly a need to make driving a more attractive career by improving facilities (as Europe has) and conditions for drivers. Wage increases may not be enough. The government could also relax cabotage restrictions to increase efficiency and fuel savings. Of course, some of the raised costs for haulage companies will inevitably be passed on to consumers.
So far, the energy price surge and fuel crunch has not seemed to affect the polls. With the Labour Party busy debating internal party rule changes, parsing leader Keir Starmer’s 12,000-word mission statement and arguing over the deputy leader’s colourful language in describing the government, Johnson ill not be too worried yet.
But things could change fast. It was during the fuel shortages in 2000 that Tony Blair’s Labour government watched its popularity dip below the Conservatives’.
That crisis passed quickly. If this one drags out, the danger is not just that public opinion will sour. It could also undermine Johnson’s plans for rebalancing the economy and pushing for decarbonisation — both of which will require more from taxpayers. Rather than downplaying the problem and blaming consumers, far better to face the elephant in the room.
Bloomberg Opinion. More stories like this are available on bloomberg.com/opinion
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