Soaring gas prices and enormous labour shortages are recent challenges in the United Kingdom which have already had a huge impact on the food supply chain. Today’s empty shelves in supermarkets are the result of energy and labour deficiencies, indicating a tougher winter with increased risks of food supply disruptions.
Many UK Industries Hit by Gas Prices
The UK economy has been suffering from several factors, including labour shortages and the impact of pandemic rules; increasing energy costs have also played a disruptive role since the beginning of the year, when the UK withdrawal from the EU was completed. Based on data by the Oil & Gas UK trade body, gas prices have increased by 250% since January 2021, and this has affected many industries in the country.
A shortage of HGV drivers has added to the energy costs issue and the subsequent rising cost of food products. A shortage of workers and supplies has impacted the food supply chain, with consumers soon facing a shortage of many fresh foods such as turkey, beef, pork, chicken, and bakery products. Fresh foods, dairy products, beverages, and pet foods have been affected by the increasing gas prices, as well as a shortage of labour in the food and transport industries. Solid post-Brexit regulations on importing goods and non-issuance of visas for non-British workers have led to the vicious circle of dependence on more local productions while there are fewer workers.
The UK Government Has Not Managed the Energy Sector Properly
Several energy firms have collapsed due to soaring gas prices. Millions of customers have been hit, with some having to switch to different firms which could be more expensive. Although the UK government has talked about loans backed by the government for big energy firms, this has been overlooked so far. People must be protected from the skyrocketing prices, but some ministers claim this is temporary.
The government is divided over what to do next to fix the problem. The ruling Conservative Party fears public panic in the coming winter, which could put the government under strain. Amid all these energy shortages, the government keeps saying that the country benefits from various sources of gas suppliers, including domestic sources. Although, the problem is not only the physical supply of gas, but the rising price that London must pay to other countries to maintain gas supplies. There is a need for a coherent strategy and the Conservative government should stop pursuing its confusing policies to be able to manage the gas industry effectively.
Food Producers Cut Working Hours to Afford Gas Bills
There are fears of food shortages as gas prices keep rising. This will come as a huge shock to customers as many food producers will be hit by higher fertiliser prices as a result of higher gas prices. Furthermore, many food producers will have to cut working hours to be able to pay their gas bills, creating even more concerns over food supplies in the country. The supply of fresh foods is closely entangled with the price of gas and the government must act in time to make sure the food supply chain is not disrupted across the country. In addition to problems caused by the soaring gas prices, labour shortages have also impacted the food supply chain. There are fewer workers to help with production and picking at the farms, as well as fewer HGV drivers to transport the goods from the farms to supermarkets.
Brexit Has Had a Major Impact on the Supply of Labour in the UK
Brexit and Covid-19 have had a significant impact on the supply of labour in the UK, affecting all businesses and industries. UK officials have warned businesses about the recruitment of non-British workers as the country faces a labour shortage problem. The Confederation of British Industry (CBI) said labour shortages will not be fixed any time soon and there will be no trained and skilled staff available in the near future. Businesses and industries in the UK have to hire British workers in positions previously filled by EU workers, where the vacuum has damaged the economy.
Several businesses have had to reduce their working hours to be able to meet the higher gas bills, while some others are providing fewer services and goods than before. Some manufacturers have had to cancel their plans and some have had to postpone theirs because they do not have the required workforce to handle the job. Experts have suggested using migrant workers with temporary visas until British workers are trained and recruited into businesses and industries.
Labour Shortages Damage the UK Economy
Problems related to the UK workforce as a direct result of Brexit rules and regulations, an increase in gas prices due to supply issues, and a blaze at the National Grid which caused additional demands for gas, have resulted in food shortages in some supermarkets.
The UK is facing two years of labour shortages. The government’s inflexibility in this respect to allow EU workers into the country is damaging the economy. On the one hand, there are empty shelves in the supermarkets, and fruits are rotting in fields on the other because there are not enough workers to pick them. The labour shortage has been affecting various sectors with a direct impact on the food supply chain. Retailers and local producers have distributed leaflets to hire workers. The supply strain will hold back economic growth in the near future, and signs of stress are already emerging in the UK economy. Labour shortages have also meant rising wages, further threatening the economic recovery.
The challenges faced by UK energy firms have increased gas prices across the country. This is expected to have mind-blowing effects on consumers who must face the higher bills. Running the UK fresh foods industry is closely linked to gas prices and a spike in their energy costs will result in a reduction of working hours to manage the bills. Moreover, increased gas prices mean that many food producers will be hit by higher prices for fertiliser, which in turn can reduce food production.
After Britain’s exit from the European Union, the free movement of workers from EU countries was cancelled at the UK borders with tough immigration controls put in place, thus resulting in a shortage of labour in the country. Having fewer workers in industry, transport, etc, has had extremely negative impacts on food production, and the picking and transport of fresh products to consumers. The UK government needs to address short-term economic needs and long-term economic reforms simultaneously in order to be able to manage the food supply chain and maintain its management afterwards.