Unless the government that ‘got Brexit done’ explores immigration as a solution, Boris Johnson’s reshuffle will have no impact on the supply chain crisis, writes Retail Week editor Luke Tugby.

Relations between retail and the government have been strained, to put it diplomatically, over the past few months.

A sector becoming increasingly frustrated at Westminster’s lack of meaningful action on the supply chain crisis is now fearful that Christmas will be severely impacted by shortages on shelves and under the tree. 

Yet Boris Johnson’s cabinet reshuffle this week has delivered a glimmer of hope. 

Although Kwasi Kwarteng – who has endured a difficult relationship with retailers since becoming business secretary in January  – kept his job, Johnson turned to Michael Gove to head up a new committee tasked with tackling the food supply chain crisis.

“The industry urgently needs the government to allow workers into the UK from the EU on a temporary basis to ease the strain that is threatening to bring the logistics industry to its knees”

Gove, who was also appointed as the new minister for housing, communities and local government in this week’s radical shake-up, will lead the National Economic Recovery Taskforce (Logistics), which is expected to work closely with suppliers in a bid to minimise product shortages.

It is a step in the right direction but the problem is, of course, not isolated to grocery retailers. Businesses across the sector are hopeful that Gove’s dedicated team will provide the catalyst to deliver the significant policy changes required to shore up our supply chains, with the golden quarter only weeks away. 

In the interests of balance, the government has taken a number of steps to try and ease the primary problem – a lack of HGV drivers. 

As well as increasing the volume of driving tests being conducted, Number 10 has relaxed restrictions on the number of hours that drivers can work and the length of breaks they are required to take between shifts. Some, however, observe that this is detrimental to their working conditions and could actually force more drivers to quit, exacerbating rather than alleviating the problem.

Either way, as one senior executive puts it, the government’s measures so far merely amount to “fiddling while Rome burns”.

The government had been warned

The industry urgently needs the government to allow workers into the UK from the EU on a temporary basis to ease the strain that is threatening to bring the logistics industry to its knees. 

The BRC has said there is a shortage of 90,000 drivers and suggests hauliers from Europe be allowed to work in the UK on short-term, seasonal visas for 6-9 months. 

That is a common-sense proposal but there is no political appetite to explore immigration as a solution. The government is prioritising the protection of its public image – as the party that delivered Brexit – over the protection of the retail supply chain. That is unacceptable, verging on scandalous.

Let’s face it, it is not the Conversatives, but the retail industry that will get the blame when the availability of food, electricals and toys is decimated at Christmas.

This is not intended to scaremonger, nor to promote panic buying. It is the unwanted reality that we are sleepwalking into unless the government eats humble pie and agrees to issue short-term visas to European workers.

One non-food retailer told Retail Week that unless the government does so, his business will have 33% fewer HGV drivers than it requires to fulfil its usual Black Friday and Christmas demand.

“Gove, Kwarteng and Johnson must respond to retail’s SOS quickly and decisively, not only to save our supply chains but to save Christmas”

Another revealed that his company has increased pay for night-shift drivers to £65,000 a year in a bid to attract new staff.

But paying drivers more does not solve the problem. With higher hourly packages on the table, many drivers are opting to reduce their hours, take home a similar monthly pay packet, but improve their work-life balance. Who can blame them after the 18 months we have all endured? 

All of which surely means that short-term visas are the obvious and logical answer to retail’s growing supply chain problems. 

The government cannot say it has not been warned. John Lewis said yesterday it was “taking a raft of measures” to shore up its supply chain ahead of Christmas, including increasing driver pay, recruiting 7,000 temporary staff and booking additional freight.

Co-op boss Steve Murrells warned of some shortages at Christmas, cautioning that while key lines like turkeys and sprouts would be in stock, “you might not get it in every pack size”.

Last month, during a call with two senior business department officials, one retailer issued the stark warning that “the logistics industry is in danger of imploding”.  

Larger, well-capitalised businesses will have the firepower to withstand the higher costs and reduced sales that this crisis will create. Smaller businesses may not. And at what cost? Casualties will reduce competition, lessen choice for consumers and, potentially, lead to poorer customer service. 

In that situation, nobody wins. Unless, of course, your name is Boris Johnson, with the Brexit-championing optics of your government unscathed.

There is still time to put that right. But Gove, Kwarteng and Johnson must respond to retail’s SOS quickly and decisively, not only to save our supply chains but to save Christmas.

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