Daily Mail

Shortage of truckers puts economy in the slow lane

Amid lorry crisis, one industry leader claims:

- By Lucy White City Correspond­ent

THE economic recovery slowed to a crawl in July as the Covid pingdemic and a shortage of lorry drivers wreaked havoc on business.

Output rose by just 0.1 per cent on June, meaning the economy is still 2.1 per cent smaller than pre-pandemic, according to the Office for National Statistics.

The disappoint­ing figures came after Boris Johnson announced a £12billion tax raid designed to ramp up spending on the NHS and social care.The extra national insurance levy has been widely criticised because of its impact on employers.

Chancellor Rishi Sunak had been relying on the economy roaring back to life to boost tax receipts and prop up spending.

But experts at Capital Economics said there was now a ‘whiff of stagflatio­n in the air’ – where inflation soars but output stagnates. This would stretch household incomes and potentiall­y lead to higher unemployme­nt.

‘It’s becoming clearer that product and labour shortages are acting as a brake on the recovery,’ said Paul Dales, chief UK economist at the consultanc­y.

‘We believe the bulk of the drag on activity will prove to be temporary but at the moment, it looks as though GDP won’t get back to its February pre-pandemic peak in October as we previously thought.’

The ONS said a lack of HGV drivers had hit supply chains, while hospitalit­y businesses, architectu­ral practices, engineerin­g firms and waste collectors are also having staffing difficulti­es.

Jonathan Gillham, chief economist at accountanc­y firm PwC, said: ‘The economy now is being hit by a continued wave of structural problems. Some of these issues will soften over the coming months, but the recovery may well continue to stall if they are not resolved.’

THE days when shoppers could buy anything they wanted from supermarke­ts are over, an industry leader said yesterday.

gaps on shelves are likely to be a permanent issue because of the impact of labour shortages on supplies, food and Drink federation chief executive ian Wright said.

His interventi­on comes as record levels of fresh produce are being left to rot because of a lack of workers to pick, pack and deliver crops. The chronic shortage – estimated at 500,000 – is hitting the entire food chain from farms to the high street, according to industry trade bodies.

Mr Wright said: ‘The result of the labour shortages is that the just-in-time system that has sustained supermarke­ts, convenienc­e stores and restaurant­s – so the food has arrived on the shelf or in the kitchen, just when you need it – is no longer working.

‘i don’t think it will work again, i think we are now in for permanent shortages.’

He added: ‘What is changing now is that the uK shopper and consumer could have previously expected just about every product they want to be on a shelf or in the restaurant all the time. That’s over, and i don’t think it’s coming back.’

Tonnes of food is going to waste at the same time as supermarke­ts and restaurant­s complain they cannot get deliveries of the produce they need. farmers are dumping milk, while McDonald’s has stopped selling milkshakes because it cannot get supplies.

farmers, retailers, hauliers and manufactur­ers have called on the government to relax Brexit immigratio­n controls to allow more European workers into the uK, but this has been rejected. national farmers’ union (nfu) horticultu­re expert ali Capper said the situation had created ‘inexcusabl­e’ levels of food waste.

‘it feels like such a car crash at the moment,’ she said. ‘Everybody’s so short of staff and wages are inflating like mad. i’m hearing of wage inflation of anywhere between 15 to 30 per cent year on year.’

The chairman of British Summer fruits, nick Marston, told The grocer: ‘We’ll have higher crop losses than ever.

‘and horticultu­ral performanc­e, in terms of yields and fruit quality, will probably have reduced because we haven’t got the labour to conduct critical husbandry tasks.’

This week, farmers have been dumping milk because there are not enough tanker drivers to make collection­s.

Stoke-on-Trent dairy farmer andrew Mellor, who poured away 1,500 litres of milk, said: ‘in all my years farming, i have never had to throw milk away due to driver shortages.’

Michael Oakes, nfu dairy board chairman, said ministers had failed to understand the seriousnes­s of the crisis.

‘The government must live in a cave not to notice empty supermarke­t shelves and limited menus at fast-food outlets,’ he said. ‘until we see more emptiness at retail and food service level, i am not sure the government will listen.’

British Retail Consortium chief executive Helen Dickinson said: ‘food price rises are likely in the coming months. in the run-up to Christmas, the situation could get worse, and customers may see reduced choice and increased prices.’

‘Everybody’s so short of staff’

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