Shortages blame between UK Government and businesses

In response to the many disruptions in supply chains and labour shortages, senior Conservatives are accusing companies of becoming hooked on cheap labour during Britain's partnership with the EU pre-Brexit.

These accusations arose during the Conservative party conference this week. Their minister claimed that businesses were even responsible for chaos on petrol station forecourts and empty supermarket shelves. Furthermore, some went as far as to say that businesses have failed to properly prepare for a post-Brexit economy.

Although Brexit was a long time coming, taking 4 years to complete the departure agreement, many businesses did not know what post-Brexit Britain would look like. Arguably, neither did MPs or even Boris Johnson.

The obscurity and ambiguity of the discussions between the UK and the EU made it very difficult for businesses to appropriately plan, with many only knowing the final agreements on the 31st of January 2020 when it was too late to plan.

Businesses are expected to go through adverse times this winter unless the Government manages to address the shortage in HGV drivers and other workers.

Many see the UK’s new immigration controls and the pandemic handling as the reasons behind the market failure, rather than businesses ill preparation.

The points-based system is now in place. It allocates points to potential immigrants depending on their skills and whether they have a job offer from an approved employer. Therefore, those who have a high level of education or are in a skilled profession (and thus who tend to be more wealthy) get given a visa, whilst those that are attempting to leave poverty with no work skills are refused entry. Although morally and ethically questionable, the system aims to prevent new immigrants from becoming unemployed within the UK and dependent on Government benefits.

This has consequently led to shortages in low skilled, but nonetheless crucial, jobs.

However, Boris Johnson has rejected these accusations on Tuesday to the BBC, saying the Government is doing all it can (which is rather odd as the new immigration rules were made by and enforced by the Government). Apparently, the aim is a long term solution. By forcing businesses to employ from the UK market, Boris Johnson believes that wages will rise, working conditions will improve, and productivity will increase. He also further enforced the blame onto businesses.

One cabinet minister told the Financial Times that companies were “whingeing” about the fact that Britain was moving to a high skilled, high-pay economy. “Of course they don’t like it,” they said, “because they’ve had it too easy with cheap foreign labour. But they need to stop whingeing”.

However, views on this topic have been significantly double-sided. Roger Barker, head of policy at the Institute of Directors, said that playing the “blame game” is very unhelpful and urges the Government to work with businesses to solve issues, rather than ignoring them.

Furthermore, it is also in the Conservative party's interest to stop blaming businesses, as the confidence among companies in the UK has taken a massive fall. This could potentially boost support for the Labour party next election.

The problems within the UK economy however are reaching a critical level, with around a dozen energy companies have gone bust due to the spike in wholesale gas (to read more articles on this go to the UK section). Therefore, no matter who is to blame, action needs to be taken.


Written by Charlotte Hurst

Research compiled by Hugo Denage


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