Yves here. I have to confess to not paying much attention to Brexit. That’s mainly because Covid, but also because Brexit has moved into a death of a thousand unkind cuts terrain, except for the wrangling over the commitments made regarding the Good Friday Agreement. Lots of small businesses have suffered. Some have perished. A lot of worker, particularly haulers, have also been contending with loss of income and disruption to their schedules. Because the costs have been distributed across many sectors of the economy and a lot of businessmen also remain oddly cowed (now as in pre-Brexit, they were told or believed that they’d suffer if they crossed the Government), we’ve gotten more anecdata than actual tallies. Plus there have been fudges, but some were intended to be only temporary and I have no idea to what extend much has been fixed.
However, due to the lack of UK self sufficiency in food, those supplies had always been a cause for concern. It was stunning to see UK ministers act as if food could be stockpiled by grocers, then have the likes of Tesco executives explain that they ran on a just-in-time system and only held 2-4 days of inventories. Of course, households could stockpile, and my impression is at least some did, but I suspect those stores were depleted a while back.
Richard Murphy is sufficiently Johnson-hostile that I’d take his post with a grain of salt. But the flip side is most news related to real-world Covid problems has been buried for so long that it is plausible that the Tories could succeed in sweeping a big problem under the rug…until the rug starts moving.
By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an “anti-poverty campaigner and tax expert”. He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics. He is a member of the Progressive Economy Forum. Originally published at Tax Research UK
This tweet is worth sharing. I have checked the story in Motor Transport, which appears reputable:
I had to register on an industry site to read this detail, because @BBCNews have NOT published this interview on their site for reasons that are easily guessed at.
UK supply chain faces collapse in "two to three weeks", RHA warns governmenthttps://t.co/9nJU6fGFOu#GrantShapps pic.twitter.com/3OXBHn9c2e
— Tim Ireland ?⚜️?? (@bloggerheads) August 3, 2021
So, what is happening?
First, it would seem as if a D notice has been issued to prevent this story being discussed. That the supply chain might get worse is not being mentioned in the media.
Second, if the Road Haulage Association is to be believed the government is doing nothing to prevent this crisis.
Third, you might almost believe that the government wants a story that is very clearly related to Brexit to be related to Covid instead.
What is actually happening? It would seem that three things are.
First, there is denial in government of the scale of the issue that they have unleashed with Brexit.
Second, there is willing to make excuses, rathe than take action.
Third, I rather strongly suspect that they think that they can sacrifice Grant Shapps to this one, and Johnson will survive again.
But if food supply moves from being an inconvenience, which it is now, to becoming a serious issue, which it seems that the Road Haulage Association thinks it might be, will the public be foolish enough to just think this the result of the pingdemic when simultaneously it is claimed that the number of cases is falling and the sensitivity of contacting has been reduced? I doubt it. I think they will smell a rat and decide that this is not a Covid issue.
All governments have to ride their luck. Johnson certainly has. However, evidence from Conservative Home suggests that even within the Tories Johnson’s own popularity is waning now. In that case it is very likely it is elsewhere.
So, will the backlash against a government whose ability to keep any promise is so obviously limited begin when food shortages become real, and the panic the media are obviously trying to avoid sets in? It may.
I just hope that it is understood that the issue is Brexit though, because it is. This is not Covid issue. Time will tell.
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They slapped a ‘D Notice’ on this story? And what happens when the proverbial hits the fan and suddenly you can only find tea on a suddenly booming black market? Do they seriously think that they can hide empty shelves and just wave their hands and say ‘Covid!’ and think that people will believe them? Will there be a return to smuggling again in Cornwall with the UK Customs looking the other way so that some supplies get in? Setting aside 19th century Ireland, I don’t think that there has been serious food riots since the 18th century in the UK-
https://en.wikipedia.org/wiki/1766_food_riots
It is a very old saying that “Every society is three meals away from chaos” so we may see if this is true in the UK pretty soon.
I like Richard Murphy a lot, but he does sometimes overstate things when its outside his expertise. I find it very hard to believe that there is a D Notice on reporting on supply chains. Nothing is impossible of course (maybe it could be justified on the grounds of preventing panic buying), but more likely its a combination of most journalists being on holiday, most journalists not understanding anything vaguely technical, and a few quiet words having been said to editors. The BBC, of course, is now no longer anything but an official megaphone.
Only time will tell – it may be that this is nothing more than hauliers trying to extract some cash from the government by doing a little scaremongering. But there are certainly indicators that supply chains are under a lot of pressure in the UK. Whether they will break or not, but the end of August is traditionally a time when shops start building up stocks again after the summer, if it is at breaking point, thats when its likely to break.
On a vaguely connected note, I was passing the brand new Wetherspoons hotel in Dublin recently, its just opened (it has been sitting empty for nearly a year after a very expensive refurb job). Wetherspoons is famous for its vast emporiums serving cut price beer and cheap heart clogging fried food. The owner is a well known Brexiteer who made his fortune by cutting costs to the bone and selling beer surplus from suppliers cheap. It was pointed out to him that lots of brewers depend on regular imports of hops to the UK. I’m assuming he will run his Irish pubs from UK supplies (its unlikely that Irish brewers will want to play his game), but it will an interesting test to see if he can export his model (and his beer). I might just overcome my dislike of the owner to sample it one day (in the interest of research).
No smuggling. It’s not a food shortage; it’s a labor shortage.
Supermarkets are in a bidding war for the existing labor, which is also impacting supply lines for industry and everything else:
https://www.theguardian.com/business/2021/jul/27/tesco-offers-lorry-drivers-1000-signing-on-fee-due-to-shortage
https://www.theguardian.com/business/2021/jul/23/uk-supermarkets-ask-suppliers-for-payments-due-to-driver-shortage
Whoops… one more (recent) :
https://www.theguardian.com/business/2021/aug/03/call-for-action-as-uk-driver-shortage-hits-supermarket-shelves
A major dairy chain unable to get it’s product to 25% of grocerys!
Canners are having trouble getting shipments of aluminium to can. The problem is running deep into the supply chain. While things will probably get better after the summer holidays, there’s a lot of backlog.
I’ve noticed my local Lidl – German supermarket in UK – displaying empty shelves, reminiscent of the early days of the first lockdown. About three weeks ago, I asked a cashier the reason, and he explained it was due to a lack of staff – pickers – at their distribution warehouses, caused by half of the workers returning to the continent after the deadline for applications by EU member state citizens to remain. Confirmed by a couple more cashiers at a different branch, who also chipped in the shortage of farm pickers.
On top of that, Lidl has a problem with hauliers, and it’s easy to track down their recruitment campaign for drivers online. The reasons for this seem mixed: a general and chronic shortage of HGV drivers in the UK, perhaps made acute by workers returning to the EU, but also a problem peculiar to Lidl in that there are reports of a boycott of that company by hauliers because of its rigid adherence to delivery timetables during the lockdowns, which led to consignments being returned for running late.
I’ve also spoken to an artic driver who reckons Spanish and Portuguese drivers are still roaming the UK in trucks with 2000 liter fuel tanks and picking off jobs until the needle drops to the red and they cross back over the channel to top up on cheap diesel.
There’s also the pingdemic to take into account, and the media initially ran that as its headline, without mentioning the other reasons. On the general shortage of HGV drivers, I watched an extended exchange between anchor and correspondent on the BBC News – they managed a five minute analysis without once mentioning wages.
So a labour shortage does seem to be the main cause, but for diverse reasons. Also, I haven’t noticed such empty shelves in other supermarkets, including the other German chain, Aldi.
On the other hand, Aldi…just up the road from my Lidl, seems to have only minor supply disruption.
Then I was in a brand new Lidl in N London and guess what? Shelves were packed.
Yes, its a labour “shortage”. Read this and then tell me thats a bad thing.
https://unherd.com/2021/08/leavers-were-right-about-immigration
The glib answer is that it depends who you are. If your wages go up you benefit. If you are one of those whose wages do not go up but your costs do, then you lose out.
But of course it is far more complicated than that. The problem for those in the UK is that GDP is expected to be lower as a result of Brexit. The question is who takes the losses?
I am confident it will not be the oligarchs.
https://www.bloomberg.com/news/articles/2021-08-04/john-lewis-raises-truck-drivers-pay-as-shortage-fears-mount
‘The owner of John Lewis department store and upmarket grocer Waitrose said drivers will earn two pounds more per hour amounting to an annual salary boost of up to 5,000 pounds ($6,953), in a statement on Wednesday. About 900 drivers will benefit from the pay hike starting Aug. 8, while new hires will be offered a 1,000 pounds “welcome payment.”’
Basically, the BBC has been emasculated by government to the extent that Johnson is not to be protrayed in a bad light. Most newspapers are fanatically anti EU and any problems are blamed on either the EU being intransigent, the EU seeking revenge, or the EU being beastly. There is a monumental stench of corruption related to PPE, contracts, contracting out services etc., and yet the media remain obsessed with Meghan Merkel, Johnson’s new bride pregnant again, the latest Covid travel restrictions or lack thereof, the Olympics and migrants crossing the Channel in small dinghies.
These days in the media, virtually nobody has worked their way up from teaboy/girl or errand boy/girl and worn out shoe leather reporting on stories, now most journalists are privately educated with the right background and connections, with no interest in digging deep into the real story. It is much more an ego thing than a job. Celebs and suchlike are far more standard fayre in media. And anybody who is not part of the club is accused of being a conspiracy monger, purveyor of fake news or a Putin/China bot. Even in the Craig Murray contempt of court case, the judge clearly differentiated between ‘proper’ journalists in mainstream media, and ‘bloggers’ such as Murray, where the former are protected and the latter Vogelfrei and fair game for being thrown behind bars.
As such, the government remains ahead in the polls and with a working majority until 2024. The media are not going to rock the boat, they’ve got theirs, including in many cases, second homes in France, Italy etc.
The public might indeed think the ‘issue is Brexit’, but they might just as well decide that the supply issues are driven by a poorly implemented, badly monitored ‘globalization’. Specifically, one whose main supplier of manufactured goods is under a totalitarian regime, indifferent, at best, to the West, and at worst, downright hostile to it. And the people may conclude this implementation of globalization was accompanied by a gutting, to a good part, anyway, of the West’s manufacturing base. Or, a third option if the people are looking to blame, would be to look at a deadly and unique virus unleashed, either through negligence, or with purpose, by China and funded by elements in the US. IOW…the people may not automatically go along with blaming something on one of the favorite whipping boys of the Managerial Class.
Is “anecdata” a neologism coined by Yves? Love it!
A neologism to go with “pingdemic”, perhaps?
I’m still not sure what that one means.
Here is an explanation-
https://www.washingtonpost.com/business/whats-a-pingdemic-and-why-is-the-uk-having-one/2021/08/02/df6e3c24-f3ac-11eb-a636-18cac59a98dc_story.html
‘Ask not for whom your mobile pings, it pings for thee.’
It’s called Japanification and its caused by leaving the debt in place after a financial crisis. SoS
More fundamental than that is a finance system that DRIVES people and businesses into debt. (And also no limits to the concentration of private land ownership).
An example is the “housing ladder.” One typically must borrow to buy a home since negative real interest rates in housing make it impossible for most people to save to buy one.
Oh come on Murphy, I had expected better of you. A D-notice (it’s not called that any more anyway) is a request from the Ministry of Defence to the media not to publish certain sensitive information. It’s informal and legally unenforceable, although in the past it was usually complied with. It has to relate to one of, I think, about half a dozen subjects, including terrorist attacks, nuclear weapons and suchlike. It’s obviously not relevant here.
I suspect the answer is more prosaic: like other parts of the PMC-adjacent elite, the BBC was fanatically anti-Brexit. But now that it’s happened, they feel obliged to do what they can to avoid panic and public hysteria. In addition, the RHA is essentially just asking for money. The fact is that they, as much as the rest of industry, were hopelessly unprepared . They should have seen this coming years ago. It’s a bit late whining about it now.
He actually says ‘it would seem as if a D notice had been issued’. Pretty tongue in cheek to my reading.
The Tories pretty well haven’t seen anything coming in regard to Brexit on account of factors like arrogance, laziness, sociopathic disposition, greasy pole climbing, general corruption … have I missed anything out? Ah yes many voters who barely know what time of day it is!
What will it matter if the supply chains collapse and the pro-Brexit British voters finally ” see through” Brexit?
The EU will not take Britain back. There will be no “re-Entry”. ( If Scotland and Wales decide to defect from the United Kingdom and seek to join EU, will EU accept them? They could make the international law case that they are not seeking “RE-entry” but rather Entry for the First Time, because they were not Free Countries with their own Separate Sovereign free choice when UK joined EU.)
So in that event, what will Britain do?
Britain will become poor.
But certain people will become very rich via the disaster capitalism playbook.
And poor and lower income people in the UK will vote for more people like Boris who will quietly work to expand and strengthen the disaster capitalism playbook. The main enemy of the poor are the poor. The oppressed happily voting for their oppressors. Shrug.
Yep failed country coming up!
Now that the EU and UK have definitively parted ways, I think it would be a hard sell for either Scotland or Wales to abandon centuries of history and cast their lot in with the EU. Given the problem that Northern Ireland presented for Brexit and the general bad-faith dealing of the UK with regard to the agreed protocol, I don’t see the EU agreeing to any more open border type arrangements in the foreseeable future. That would mean a hard border and customs checks as a condition of entry, assuming the EU was willing to take the considerable risk associated with offering even that. The relationship with England would have to be pretty dire before that alternative would start looking attractive.
The UK would also need to agree, or at least not oppose it, otherwise the EU would probably consider it analogous to the Catalonia situation and refuse to have any part of it. While this was technically true in the case of the Scottish independence referendum, the situation is very different now after Brexit, and if unpalatable consequences like possible borders started cropping up, I think a UK veto would not be at all unlikely.
If Britain has left the EU, doesn’t that mean that Britain is no longer a member of the EU? And if Britain is no longer a member of the EU, doesn’t that mean Britain no longer has a veto or even a say in what countries the EU may or may not admit in future?
Or am I misunderstanding something?
Or are you thinking of Wales and Scotland trying for Independence and then EU membership while not yet recognized as Independent by England-the-UK-Upholder?
The latter, hence the Catalonia analogy (sorry if I wasn’t clear).
To give a less extreme example, you might get a kind of qualified support scenario, whereby the UK agreed to hold an independence referendum and honor the result but only subject to certain conditions (like not imposing a hard border) that would be incompatible with EU membership post-independence.
The UK government has already once agreed to a referendum on independence that was subject to no such conditions. Given that, it would be politically impossible IMO for a new referendum to be held on any different terms. In any event the right of a people to self-government under the UN Charter cannot surely be subject to any conditions imposed by their neighbours?
I believe Britain has not been self-sufficient in food since WW 2, and possibly earlier.
When there was an Empire, many colonies exported food to GB.
Britain hasn’t been self-sufficient in food since 1845, when the Corn Laws were repealed.
This is hysterical nonsense from Murphy – and a result of policies he advocates, in a way (see below).
There is an army of HGV drivers in the UK who have taken early retirement because the job has been undercut by European competition, wages frozen, autonomy reduced (follow this route at this speed or else) and probably their back was starting to hurt (100,000 of the 300,000 are over 55!).
Check out a driver site for comments:
https://www.ukhaulier.co.uk/news/road-transport/drivers/the-uk-is-about-to-experience-a-catastrophic-hgv-driver-shortage-for-the-first-time-in-20-years-and-we-must-brace-ourselves-for-impact/
There are some great quotes – “talk to the drivers, not the bosses!” There is also some good intelligence:
– the DVLA confirms there are ample active licence holders. They are just not taking jobs
– the drivers think bare shelves will force the supermarkets into paying more for transportation
– pay and conditions are rubbish, no sleeping lorry parks, showers etc. UK govt classifies HGV driving as unskilled (eek!).
– IR35 rules on disguised employment have forced independent contractors who worked for one hirer to accept taxation as if employed but without corresponding job protections. This is apparently a 45% pay cut (could be more, could be less in my view, depends how they were using benefit of incorporation, wife’s tax bracket etc).
This last point is likely the immediate cause of the shortage. The drivers have withdrawn their labour because, as an unskilled employee with 45% pay cut, other jobs pay as badly but are less disruptive to family and routine. Either IR35 is reversed so they can continue as independent contractors or wages double. Simples.
Murphy has banged the drum for IR35 and ending tax arbitrage for a long time. To his credit, he has at times said wages would have to rise and this would be a benefit. Unfortunately he has said nothing of the awkward transitions due to sticky prices / short fingered bosses’ reluctance to pay higher wages. This debacle is a case in point.
In the long run, we are all dead / higher paid / well stocked on the shelves. But in the short-term….
Great comment.
Anyone who takes the word of a special interest group as being an unpartial and unbiased assessment risks being nothing more than a mouthpiece.
Treat the special interest group as they’d treat an individual looking for government help: Ask some questions and verify the accuracy of the answers independently before deciding to help.
Turn it around, maybe this is just another example of how the private sector failed so maybe this is ripe for nationalisation in the interest of the public good. If the public sector had failed as badly as these guys then there’d be shouts for privatisations so why not nationalise?
These days, the Labour party is the party of the business-friendly Right. Starmer wouldn’t back nationalising any industry. Far too like Corbynism.
Brexit “in and of itself” would not have precipitated this crisis without the utter failure of UK leadership and negotiators to appreciate the their leverage in making trade deals from scratch (little to none). Had they correctly assessed that they are in a position to be deal takers – not deal makers – they could have saved a lot of time and had the (EU-dictated) details worked out by now so that things could be running much more smoothly.
The only thing they were going to get out of Brexit is monetary sovereignty. But they wanted to have their cake and eat it too.
They never gave up monetary sovereignty since they never adopted the Euro, no?
Correct. The UK always had monetary sovereignty, except for the brief time they were members of the ERM, hence, Brexit was, and is, irrelevant to this issue. It would perhaps more accurate to say that Brexit need not have precipitated a crisis but for the total incompetence on the part of the government. It is difficult to find another UK example where the government exhibits such serial incompetence.
Indeed most UK voters and politicians effectively believe their national currency is found under a gooseberry bush. This relates to the 19th century when parents and grand-parents fobbed off children who asked “Where do babies come from?” with the reply they’re found under gooseberry bushes. This wasn’t entirely inaccurate since female pubic hair was known as the gooseberry bush.
Wow, this is great. I’m an American and don’t spend any time in the UK. I have no solutions. No there is no shortage of food, so nothing to worry about.
If/when push comes to shove, we (the US) could institute a lend-lease program to help the UK, as well as our farmers’ chronic surplus of cheese, corn AKA maize etc.
We will be seeing food shortages in the USA within a decade due to changing precipitation patterns and global warming.
California produces a significant amount of the fruits and Veggies we consume in this country and another issue is soil contamination from large UWI fires.
If the Hayward fault pops in September/October there will be a heck of a lot of extremely toxic smoke produced and if the winds are right much of it will settle in the central valley, contaminating the soils.
If you look at productive farmland across the globe and factor in the effects of global warming it is clear that overpopulation will be a fleeting problem..
Why in the world would the Hayward fault slip in September/October? What makes you think this?
Recently, Hank Johnson, a Georgia (USA) congressman said he fears additional residents could cause Guam to topple, to capsize.
The reason that the Hayward fault might slip in the fall is because of the cooler weather: more people will go hiking, wearing heavy boots and backpacks, and all that tramping will loosen the fault. Let’s run this by Rep. Johnson and see what he thinks. This video is worth watching, but the comments are hilarious: https://www.youtube.com/watch?v=X5dkqUy7mUk
entertainment value for the GOP? another way to beat on CA?
Skunk, the Hayward fault pops every 140 years on average.
1868 was the last big one.
I simply mentioned a particularly bad time for it to happen.
Take a look at the fault maps, the Roger’s creek fault is a continuation of the Hayward Fault, it’s going to be a mess whenever it happens.
Oh, and check out the proximity of those big oil refineries to the fault.
Maybe we’ll get lucky.
Given the multiplicity of social media forms of communication, I doubt that the UK govt is bothering to try to keep anything quiet these days. As for Brexit being the reason, as other commenters have stated it’s more to do with road haulage being non-unionised and hence underpaid, overworked and poorly regulated. I can’t see the Labour party doing anything other than blaming the workers and claiming that the Tories are far too socialist. That’s Starmer’s reaction to any problem.
Starmer’s a conviction politician. He believes he needs to out-tory the Tories to stand any chance of getting elected prime-minister. He’s probably right given the ignorance of many UK electors!
Do not blame Brexit or Covid for what is clearly a neoliberal austerity deficit hawk government. The UK deficit has risen only from non-discretionary spending. UK social program cuts are the main cause of the poor infrastructure now threatening supply chains. Covid is only an accelerant.
It was always within the UK Government power to institute a Job Guarantee post-Brexit, fully fund the NHS, and shift real resource away from the parasitic financial centre to the industrial regions. Hell, even pre-Brexit. Both Labour and the Tories simply refuse to support labour.
It is the biggest myth that UK economy depends upon the City of London finance sector. It’s completely backwards. The City of London is the parasite living on the industrial worker host, and increasingly preying upon the global south worker, leap-frogging the UK worker who will soon likely get their neoliberal UBI so they too can live off the back of the anonymous worker in the global south.