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Government to introduce temporary visas to alleviate fuel supply crisis


The shortage of lorry drivers in the UK has resulted in a lack of petrol tank drivers, with oil firms including BP and Esso having to close some petrol stations due to a shortage of deliveries, the BBC reports.


The UK currently has a shortfall of around 100,000 lorry drivers due to Brexit (many EU workers have left the UK) and Covid (preventing drivers from taking tests to receive their HGV licences) but the shortage of petrol drivers is acute due to the need for an extra qualification to deliver hazardous substances.


News of fuel forecourt closures has created fears of petrol shortages, with some consumers reportedly queuing for hours to fill up their tanks. This is in spite of messages from Transport Secretary Grant Shapps urging consumers to be ‘’sensible’’ as there is ‘’plenty of fuel’’. This panic buying has, according to The Petrol Retailers Association (PRA), created ‘’really serious problems’’, with stockpiling, rather than supply issues, creating the shortages.


The Tragedy of the Commons helps to explain this behaviour. There is plenty of the common good (petrol) to meet the needs of every consumer but since some individuals are stockpiling (i.e over-utilising the resource), it makes rational sense for all other consumers to do the same. If they do not stockpile, the logic goes, then someone else will.


This increase in demand is likely to put upwards pressure on the price of fuel. Since demand for petrol is price inelastic (it is a necessity for those with non-electric cars), an increase in price will lead to a less than proportionate decrease in demand. The effects of this price increase are likely to disproportionately affect those on low incomes (including those on JSA, state pensioners and those with low fixed incomes).


Some oil firms have taken action to prevent panic buying by rationing supply. EG Group has introduced a £30 fuel cap to allow all customers to ‘’have a fair chance to refuel’’.


Government ministers have held urgent talks on how to address the shortage of lorry drivers and, on Saturday (25/9/21) announced plans for a temporary visa scheme. 5,000 visas are to be given to fuel tanker and food lorry drivers and 5,500 visas are to be given to poultry workers to help abate supply pressures. These visas are valid until Christmas Eve.


The Government was reluctant to make this significant U-turn, having previously ruled out issuing visas to foreign workers. One of the main benefits of Brexit, according to proponents, was that it would prevent wages being undercut by low-skilled workers from Europe and encourage investment in British workers but the Government was forced, by the risk of shortages at Christmas, to allow low-skilled workers to enter the UK.


However, Shapps made sure to state "We are acting now, but the industries must also play their part with working conditions continuing to improve and the deserved salary increases continuing to be maintained in order for companies to retain new drivers."


The Government’s proposal has been deemed insufficient by some, with the Road Haulage Association stating that it ‘’barely scratches the surface’’ and the British Retail Consortium warning that the decision was ‘’too little, too late’’. Issuing 10,500 visas is a small step towards overcoming the current shortfall of 100,000 drivers and since the scheme will only last until the 24th of December, it is unlikely to be considered an attractive option for drivers.


Imran Mustafa, a haulage driver who moved to Barcelona from Pakistan, told the PA news agency that the ‘’small time period’’ would be ineffective in attracting drivers due to geographical immobility - people are unwilling to uproot their lives ‘’to move to the UK for three months only on a temporary visa’’.


However, the freight industry group Logistics UK endorsed the decision and said that it was ‘’a huge step forward in solving the disruption to supply chains’’.


Other actions taken by the Government include investing £10 million to provide free intensive courses to train up to 3,000 new HGV drivers, relaxing Drivers’ Hours rules (increasing lorry drivers’ daily driving limit) and writing to 1 million workers who currently hold an HGV licences to encourage them to return to work. These policies will go some way towards alleviating supply constraints but until poor working conditions are improved, it is unlikely that individuals will be incentivised to enter or return to the sector.

 

Written by Deandra Peiris Research compiled by Steven Li









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