Meat producers have warned that European butchers won’t come to the UK on short-term visas to help fix the Christmas food crisis.
Politico Europe’s Esther Webber explains that labour shortages mean British consumers could be left without Christmas staples such as pigs in blankets (with farmers warning today that they could be forced to cull animals instead).
She writes:
David Lindars, technical operations director of the British Meat Processors Association, told POLITICO there would be a particular impact on “very labor-intensive products like pigs in blankets, decorated gammon and party food.”
He warned that time was running out to rectify the situation.
“Even if we were granted seasonal workers’ visas, by the time they’ve got the scheme up and running the whole process means they will only end up with six or seven weeks’ work here,” he said. “Who’s going to come, or leave a job somewhere in Europe, to come here for six or seven weeks? No one.”
He said the average meat-processing company is operating with a shortage of staff at around 15 percent, and in some parts of the U.K., firms are reporting a 25 percent shortage.
Normally meat companies begin producing Christmas items in June, but have not been able to do so this year.
Both the BMPA and the National Farmers Union are pushing for a 12-month COVID-recovery visa, to help industries recruit workers from overseas. More here.
UK business leaders have warned ministers about an “autumn storm” of rising taxes, escalating costs, labour shortages and supply disruption as government Covid-19 support schemes come to an end, says the Financial Times.
On top of the slump in business confidence (see our opening post), they add:
Third-quarter data that will be published next week by the British Chambers of Commerce is expected to show that rising costs for wages and materials, along with skills shortages are causing concern….
“We were seeing good increases in confidence through the summer,” said Shevaun Haviland, the BCC’s director-general. “But I have been on a number of CEO calls in the last week that we have tried to end on an upbeat note but no one could find one.”
Some bus operators continue to warn of delays due to queues at petrol stations today:
And here’s Norfolk’s Konectbus:
European stock markets hit a two-month low this morning, as inflation worries weigh on shares.
The Stoxx 600 index, which includes the top companies listed across Europe, has fallen around 1% to touch its lowest level since late July.
Travel and leisure stocks are leading the fallers, along with financial companies and industrial firms.
The UK’s FTSE 100 index is faring slightly better than the rest; it is down 0.7%, or 55 points, at 7032 points. Retailers and banks top the fallers, with JD Sports down 3% and Lloyds Banking Group off 2.7%.
The surge in energy prices this autumn is threatening to drive up inflation, hitting consumers in the pocket and eating into corporate profits.
Reports that China’s central government officials have ordered the top state-owned energy companies to secure fuel supplies for winter at all costs, amid a power crisis, suggest that the battle for energy stocks is going to become more intense.
There as a big queue at a petrol station in Ilford, in East London, at 1am this morning, says local Labour MP Wes Streeting:
Online electricals retailer AO World has been hit by the supply chain crisis.
AO has told the City that profits this year will be lower than a year ago (when it received a boost from the pandemic).
UK sales in the last six months were affected by the “nationwide shortage of delivery drivers and ongoing disruption in the global supply chain”.
The Bolton-based company, which sells household appliances and other electrical goods from fridges and washing machines to laptops and printers, adds that these problems are ‘ongoing’:
Whilst we continue to see industrywide issues relating to ongoing supply chain disruption, we have implemented measures to help mitigate these challenges in our logistics operations.
AO now expects to make adjusted core profits of between £35m and £50m for this financial year (to 31 March 2022), down from £64m a year ago. Shares have tumbled over 10% in early trading.
The UK is heading into an “acute welfare disaster very quickly” with the country facing a “mass cull of animals”, the chairman of the National Pig Association has warned.
Following warnings that a shortage of butchers could impact food supplies over Christmas, Rob Mutimer told BBC Radio 4’s Today programme that the situation has worsened:
“The problem in the industry has got very considerably worse over the last three weeks. We are within a couple of weeks of actually having to consider a mass cull of animals in this country.”
He said pig farms of all sizes are running out of space to keep their animals, which is worrying for farmers as we head into winter.
That’s why farmers’ groups are urging the government to issues visas, to allow more butchers into the country.
Asked what a culling situation would involve, Mutimer said:
“It involves either shooting pigs on farm, or taking them to an abattoir, killing the animals, and actually disposing them in the skip at the other end of the chain.
“So these animals won’t go into the food chain. They will either be rendered, or if not, sent for incineration. So it’s an absolute travesty.”
Shortages of butchers means that pigs are already staying on farms longer than usual. Mutimer’s pigs would normally be slaughtered at 115kg – some are now approaching 140kg.
“The pens and the sheds and everything just weren’t designed for animals of this size and we’re really heading into an acute welfare disaster very quickly,” he said.
The Times says ministers are discussing plans to ease visa restrictions to allow up to 1,000 foreign butchers into the country, but that Priti Patel, the home secretary, is resisting the move, amid concerns it is part of a wider push by industry to return to free movement.
Kit Malthouse, minister for crime and policing, says the fuel crisis is stabilising, though demand is still high.
Malthouse told Sky News that ‘excess demand’ for fuel is causing a distribution issue, and suggests it could take a few days for the situation to stabilise further:
“My information this morning is that the situation is stabilising across the country, albeit there’s obviously still high demand for fuel.
Let’s hope that over the next few days that eases as people’s tanks fill, and that extra demand starts to abate a little, and we can get back to a more predictable pattern of supply”
Malthouse insists there’s no shortage of fuel in the UK, but “only so many tankers, only so many drivers” to distribute it.
Hopefully in the next few days things will stabilise further, and return to normality in short order.
One petrol station owner in Surrey has criticised the Government for claiming the situation was now under control.
“It’s like they are gaslighting the public,” the owner told the Daily Telegraph.
“It was chaos [on Wednesday], it was chaos [on Thursday], and it will be chaos [on Friday].”
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, business and the UK’s supply chain crisis.
“When sorrows come, they come not single spies. But in battalions!” as Claudius wisely put it in Hamlet. And today the UK is facing a truckload of trouble.
Business confidence has “fallen off a cliff”, as supply bottlenecks, rising energy prices, fuel shortages and looming tax increases hit the economy.
The Institute of Directors has warned that business confidence in the UK has tumbled to its lowest level since February, deep in the last lockdown.
Its index of business morale has dropped from +22 points to –1 point in September meant a return to the pessimism of February, when the economy was constrained by lockdown restrictions.
Kitty Ussher, Chief Economist at the Institute of Directors, said the UK business environment has “deteriorated dramatically” in recent weeks.
Following a period of optimism in the early summer, people running small and medium sized businesses across the UK are now far less certain about the overall economic situation and the IoD Directors’ Economic Confidence Index fell off a cliff in September.
“A higher proportion of our members expect costs to rise in the next year than expect revenues to rise. This is not helped by the government’s recent decision to raise employers’ national insurance contributions, which acts as a disincentive to hire just when the furlough scheme is ending.
Unions, economists and other businesses groups have also warned that ending the furlough scheme yesterday will add to the UK’s economic woes.
The petrol crisis has entered its second week. Yesterday, nearly half of all independently owned petrol stations in the UK were still dry or out of one type of fuel on Thursday, following the panic buying that hit forecourts last Friday.
With high demand still draining sites quickly, soldiers are on standby to drive tankers to help with the refuelling effort amid a lack of HGV drivers.
Brian Madderson, chairman of the Petrol Retailers Association, warned yesterday:
“There’s been no easing off of the pressure from drivers wanting to refuel whenever they can, wherever they can. Trying to calm this down appears to be a monumental task at the moment.”
The petrol crisis is improving in northeast England, Yorkshire, Scotland and Wales but large areas are still suffering significant shortages, according to an internal Whitehall analysis seen by The Times.
That analysis shows that fuel levels are still much too low:
Average fuel levels at forecourts remain at 20 per cent for the fourth day running, compared with a usual 43 per cent. Industry sources have said there could be disruption for up to a month.
The Whitehall analysis categorises each region as red, amber or green. It shows that in England, London, the southeast, the northwest, and the west and east Midlands are rated red, with levels of less than 20 per cent.
The wider shortage of HGV drivers is hitting the economy, raising warnings that Christmas could be badly disrupted as families struggle to find festive food and presents.
The government is also being urged to allow more butchers into the country, with the Britain’s farming industry warning that hundreds of thousands of pigs may have to be culled within weeks.
Lizzie Wilson, policy services officer at the National Pig Association (NPA), said the shortage of butchers meant processors were operating at 25% reduced capacity. That means mature pigs ready for processing are backing-up on farms, causing welfare issues.
“There’s about 120,000 pigs sat on farm currently that should have already been slaughtered, butchered, be within the food chain and eaten by now,”
UK households are also seeing their energy bills jump today, as the energy price cap is lifted. The cap means those on default tariffs paying by direct debit will see their bills rise £139 from £1,138 to £1,277, based on typical usage.
It will add to the cost of living squeeze facing families this winter. Charities warn that the government’s new £500m winter hardship fund won’t provide enough support, given next week’s £20-a-week cut to universal credit.
But the increase in the cap has been overtaken by the surge in global energy prices in the last few weeks, which have forced several UK suppliers out of business.
On the economic front, we get new inflation data from the US and eurozone will be closely watched, and find out how global factories fared last month.
Data released already today shows that Asia’s manufacturing activity was lacklustre in September amid signs of slowing Chinese growth and factory shutdowns caused by the coronavirus pandemic.
Investors are also feeling gloomy, with European stock markets expected to open lower after sharp falls in Asia-Pacific bourses overnight (Japan’s Nikkei has closed down 2.3%).
The agenda
- 9am BST: Eurozone manufacturing PMI survey for September
- 9.30am BST: UK manufacturing PMI survey for September
- 10am BST: Eurozone inflation report for September
- 1.30pm BST: US PCE inflation measure for August
- 2.45pm BST: US manufacturing PMI survey for September
- 3pm BST: University of Michigan survey of US consumer confidence
Source: Guardian