Ministers fight back over supply chain issues

Having been depicted as the Grinch for “stealing Christmas” last year, Boris Johnson already knows what is heading his way if families face festive misery for a second year running.

He is determined blame for any shortages of turkeys or gifts is not laid at his door, and yesterday it became clear that the Government is prepared to have a bare-knuckle fight with business for the prize of public support. As ministers were sent out to spread the message that the Prime Minister is not “responsible for what’s in the shops”, behind the scenes Whitehall insiders were accusing British firms of being “drunk on cheap labour” from abroad.

The message is a simple one: if your Christmas table is bare, blame supermarkets for being too mean to pay lorry drivers properly.

Business leaders insist the Government is “getting its excuses in early” for a yuletide supply crisis that might already be unavoidable.

They say the Government could have made rule changes that would have eased the current shortage of HGV drivers that is the root cause of the fuel crisis and of empty supermarket shelves. The truth, inevitably, lies somewhere in between, as both businesses and the Government could have done more to avert a crisis that has been looming not for months but for years.

But it is the Government that currently has the bigger megaphone, in the shape of the Conservative party conference, where a captive audience of the nation’s media is massed to record ministers’ every utterance, and where whispered conversations around coffee stalls and trade stands press home the official message.

One senior Government source told The Daily Telegraph: “From the point of view of the British economy, for far too long now businesses have taken the easy way out and the cheapest route. They have known for five years that we were ending freedom of movement, and we have told them repeatedly they shouldn’t pull the lever of uncontrolled immigration every time.

“But they are drunk on cheap labour. It prevents them adopting new technologies, and what is happening now will push businesses to invest in their supply chains and their people. This should not be controversial stuff.”

Liz Truss, the Foreign Secretary and one of the party’s most ardent free marketeers, got the ball rolling on Sunday by saying Mr Johnson was not “responsible for what’s in the shops” because Britain does not have a “command and control economy”.

Other ministers followed her over the top yesterday. Rishi Sunak, the Chancellor, said he could not “wave a magic wand” to solve supply chain issues, adding: “We don’t want to just default knee jerk, pull the immigration lever.” Paul Scully, the business minister, said firms had a “collective responsibility” to solve the problem.

Kwasi Kwarteng, the Business Secretary, said businesses had been “over reliant” on too few suppliers and left themselves “exposed”.

As well as self-preservation, there is a deeper political game playing out in Manchester. Mr Johnson, the man who famously said “f--- business” when they raised concerns about Brexit, wants to steer the conversation away from any suggestion that Britain leaving the EU could be part of the reason for labour shortages.

He also wants to build a high-wage, high-skill economy in which companies pay British workers higher salaries rather than bringing in cheap labour from abroad, in order to fulfil the promise of Brexit.

Richard Walker, managing director of the supermarket chain Iceland, is among those who are not yet prepared to let the Brexit argument go. He said: “It’s true that when we were in the EU we were over-reliant on cheap labour from abroad, but solving that problem is not going to be an easy ride.

“The Government is saying we have had years to prepare for this, but we weren’t to know that they wouldn’t include lorry drivers on the skilled workers list.”

He suggested ministers were “starting to panic because they can see there won’t be turkeys on the shelves at Christmas” and were simply “trying to push all of this on to business”.

Fighting back against the Government rhetoric, he said: “No one in Government is taking a step back and looking at the cumulative impact of everything that is happening to supply chains. We are not an endless sponge that can suck up limitless problems – we are one of the most competitive industries in the world, with very fine margins.”

Tony Danker, director-general of the Confederation of British Industry, told The Telegraph: “I don’t know a single business-person who wants to pull this lever of uncontrolled immigration that the Government keeps talking about.

“Everyone thinks the shortage occupation list is the right approach and everyone knows we have to start planning for the long term. Ministers need to get round the table with us, set up a task force to solve these problems, like they did during the Brexit implementation period.”

There are those in Government who accept that more could have been done in the past to make the haulage industry a more attractive occupation, such as better facilities for truckers at service stations and more lay-bys on motorways, but most ministers insist that the industry is a private enterprise that must sort out its own difficulties.

Mr Johnson warned the public before Britain left the EU that there would be “bumps in the road” as a result, and committed Leavers in the Cabinet believe the public will understand that transitioning to a higher wage economy will not be an entirely smooth process.

According to figures compiled by the Office for National Statistics, wages have stagnated since 2010 after you account for inflation. Real terms wages peaked in 2008 and, despite growth in average earnings, the cost of living has outstripped those rises.

As the BBC’S Andrew Marr pointed out to the Prime Minister on Sunday, this means real term wages for average people have fallen since 2010. By one measure, it is the equivalent of a £1,000 annual pay cut.

George Eustice, the Environment Secretary, told the party conference yesterday that with 40 per cent of Universal Credit claimants in work, Britain needed to get to a stage where working people could “pay their way” without needing benefits to top up their salaries.

He said there would need to be “structural changes” in the economy that would lead to a “modest structural rise in food prices”.

He also said that by seeking out “high quality”, British food retailers would have shorter supply chains, making it easier to get food on the shelves.

‘Whitehall is saying we had years to prepare, but we weren’t to know that lorry drivers would not be on the skilled workers list’