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Opinion: Labor shortage threatens to cancel out any Brexit dividend

30 September 2021

An analysis written by Peter Hardwicke from the British Meat Processors Association (BMPA) explains that shortages of EU laborers in the UK meat industry will undermine its competitiveness going forward.

While remaining in a customs and regulatory union with the UK's nearest and largest trading partner was always a better option for the meat industry than leaving it, let’s be optimistic. Brexit can work but the challenges the meat industry and others are facing are now more down to the choices Government is making and not Brexit itself.

For some time now BMPA members have been warning that the issues around export health certification, veterinary capacity and the overall additional costs of exporting to the EU, while considerable, are nowhere near as critical as the massive problem of staff shortages. These were foreseen and are now upon us.

A survey conducted by BMPA shows that over 60% of staff are of non-UK, overwhelmingly EU, origin. This is already 10% lower than in 2018, and the number of EU origin new starters has fallen by well over 20%. This tallies closely with other results of the survey which show current staff shortages at around 12% on average.

But this number is rising and even at the time of the survey, some companies were reporting shortages closer to 20%. EU workers are leaving or have already left. They now either won’t or can’t come back, with butchery and related skills not on the shortage occupation list.

When this is raised with Government it is dismissed summarily with the suggestion that we simply need to pay more. This overlooks the fact right across the sector wages have risen sharply by as much as 20% and yet it still proves impossible to sustainably recruit local staff, who do not want to do this type of work.

Suppliers are getting by, by reducing the number of lines they are offering, and if you go into many supermarkets now you will see that the choices are reduced. In the pig sector capacity issues mean that pigs are starting to back-up on farms. It’s also the case that this will result in higher food prices when the promised dividend of Brexit was quite the opposite.

Similar challenges face the haulage sector and here again Government has chosen not to recognize driving an HGV as being a skilled occupation. As far back as 2016 UK logistics firms warned that they expected a decreased headcount as EU-native drivers leave and older drivers retired. In 2018 there were 43,000 EU national drivers in the UK and with this number in decline the overall shortage of drivers in the UK is estimated at around 50,000.

There is simply no incentive for EU drivers to come and work here and moreover European companies prefer not to come to GB as the border processes and cost are disproportionate to working in mainland Europe. There is no quick fix here. Not only does it take time to train "unskilled" drivers but, even with wages rising sharply, the pool of drivers is not increasing.

In the meantime, the retailers have offered cash incentives to poach lorry drivers, but in truth this has merely taken them away from suppliers who are now being charged surcharges by retailers who have to collect because those suppliers can no longer deliver. No pressure has been taken off the supply chain, it has just meant that the big and powerful have become more able to dictate terms.

The Government has a choice here and needs to urgently review the Shortage Occupation List in both these areas. It won’t be a quick fix either way but, unless there is a change of direction, expect empty shelves at Christmas!



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