Boss of Deeside based Iceland: “Inevitable” prices will go up as lorry driver shortage continues

The managing director of Deeside based Iceland says it is ‘inevitable’ that prices will go up as the HGV driver shortage continues.

Richard Walker said that everyone is having to increase wages for lorry drivers which, he warned, will lead to inflated prices.

With gaps on supermarket shelves, food outlets running out of key items – McDonald’s had to pull milkshakes from its menu’s and some Nandos ran out of chicken – and now Weatherspoons says it is struggling to get beer into its pubs, Mr Walker urged the UK government to allow EU workers to the UK to help ease the crisis.

Brexit and the COVID-19 pandemic have exposed structural issues with the logistics labour market.

Almost 50,000 drivers have left the road in the last two years, there’s an estimated 100,000 shortfall in the number of lorry drivers in the UK needed to get goods and materials moving.

Around 14,000 EU drivers have left the country since Brexit, and only 600 have returned.

Speaking to Sky News, Mr Walker said that there has been a sharp increase in wages for lorry drivers which lead to inflation, he said, “I think inevitably it will lead to some form of inflation because this driver issue is affecting the whole supply chain.

“It’s not just affecting our part of it, which is from the depots to the shops.”

“It’s also affecting the suppliers into the depots or the produce from the fields into the supplier.”

“Everyone is having to increase wages. We’ve done double-digit wage increases now across our depots, and I think that that will lead to inflation in the market. It’s inevitable.”

Labour has called for the UK Government to “act urgently” to solve the acute supply chain crisis and has published a ‘5-point plan’ it wants adopting.

The plan includes establishing a minister with responsibility for tackling worker and supply shortages, and working with business and unions to improve terms and conditions in key sectors.

Labour is warning the UK Government to “get a grip on the chaos” and disruption hitting British businesses and supply chains or “risk the country’s economic recovery, empty shelves and consumers being hit in their pockets.”

The party said that around a quarter of manufacturing and retail businesses have seen extra costs due to additional transportation costs, and figures this week showed that shop prices rose last month.

The supply chain disruption, caused by increased barriers at the border, worker shortages following the end of the transition period and long-standing issues around terms and conditions in key sectors like HGVs, as well as global supply shortages as a result of the Covid crisis, “were completely foreseeable.”

Labour has slammed the UK Government’s failure to prepare for the disruption, including their “failure to boost employment and raise standards in key sectors like transport and logistics.”

“The Government has overseen a chronic weakening of the foundations of Britain’s skills system and a boom in poor employment conditions, creating the conditions for the current crisis.”

“The impact is being felt across the economy and hitting consumers, with shops cancelling deliveries because of driver shortages, running out of goods and issuing stark warnings about serious Christmas disruption.” Labour said.

Labour’s Shadow Business Secretary, Ed Miliband MP, said:

The Government must get a grip on the supply chain crisis facing our economy. While they act as if the problem will solve itself, businesses are telling government these problems are only going to grow. The serious disruption and added costs risk harming our recovery and passing costs to consumers.

Ministers have a habit of ignoring warnings and shifting the burden of blame to businesses. But it is their undermining of our country’s skills training system, failure to deliver on their promise to cut barriers facing businesses and belief in an insecure labour market with poor terms and conditions that has created this crisis.

The long-term problems in the HGV sector will not be solved by making drivers work longer hours but by training workers and improving their terms and conditions. What we are seeing across our economy should be a wake-up call to government that insecurity and low pay cannot build the high performing economy we need.

It’s time for the Prime Minister to take this situation seriously and appoint a minister to work across government and come up with a clear plan with businesses and unions to improve wages and conditions in key sectors. Any responsible government would act to sort out the problems firms are facing. This is what Britain’s businesses, workers and consumers have a right to expect.

The party is calling for the UK Government to “act urgently” with a clear plan to solve the acute supply chain crisis:

1. Appoint a government minister with specific responsibility for tackling the supply chain crisis and coordinating across multiple government departments.
2. Set up a taskforce to work sector by sector to identify gaps and recruit into key roles. This should include rapidly expanding testing for HGV drivers, and part or wholly funding HGV training drawing on available funding for targeted sectors. The Government should also support 100,000 new apprentices this financial year to help boost employment in key sectors.
3. Bring together business and unions to address long-term issues of wages and conditions in key sectors to agree improved terms and conditions, recognising that the Government’s belief in a low-wage, insecure labour market is key to the crisis we are seeing.
4. Refer the issue of adding HGV drivers to the Shortage Occupation List to the Migration Advisory Committee to provide advice to government to help address the crisis in the short-term, given warnings from businesses about the risk to Christmas trade.
5. Limit further disruption to supply chains from the planned introduction of initial food import controls on October 1st by working to secure an urgent veterinary agreement with the European Union.