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24 September 2021

The week Britain ran out

From closed petrol forecourts to empty supermarket shelves, a shortage society is forming and the cost of living is rising.

By Anoosh Chakelian and Philippa Nuttall

Flying over the Atlantic on Monday 20 September, bound for New York, Boris Johnson was inundated with questions from the in-flight press pack about a growing disaster he had just left behind in the UK: gas was running out.

As he cruised above the clouds, the Prime Minister was speeding away from the biggest crisis to hit his government since the pandemic. A toxic mix of broken supply chains, soaring energy prices, surging inflation, tax rises and welfare cuts threaten to impoverish hundreds of thousands of people, empty supermarket shelves, and even bring society to a standstill.

Energy suppliers in Britain had been collapsing over the weekend before the Prime Minister’s trip to the UN and the White House, as his Business Secretary Kwasi Kwarteng scrambled together emergency talks with industry figures about rocketing prices and the impact of shortages.

An austere winter lies ahead for Britons, with millions of households about to see their energy bills go up as the cost of living rises: inflation rose from 2 per cent in July to 3.2 per cent in August – the largest increase since records began in 1997.

In addition, carbon dioxide used to stun animals in slaughterhouses is running out, and the industry warned earlier this week that British poultry meat and pork could disappear from shelves within the next fortnight.

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Even Christmas dinner could be compromised – the availability of turkey will be affected, according to Ranjit Singh Boparan, the owner of the UK’s biggest poultry supplier Bernard Matthews.

The British economy is so vulnerable to gas shortages that “we could easily see a three-day working week”, warned Clive Moffatt, a gas consultant who used to advise the government on energy security, in the Telegraph.

[See also: Energy prices, petrol, rent and food: What’s driving the UK’s cost of living crisis?]

Late on Tuesday night (21 September), the government stepped in with a “short-term” bailout of one carbon dioxide manufacturer in an attempt to stave off disruption to food supplies, striking a deal with a US firm called CF Fertilisers.

As ever at a time of national crisis, Johnson reached for a glib metaphor to deflect the assembled reporters on his flight, insisting the bottlenecks are “temporary” as the global economy reopens from the worst of the Covid restrictions: “It’s like everybody going back to put the kettle on at the end of a TV programme.”

The situation is not as simple as the Prime Minister chooses to believe. Sudden economic growth after the pandemic slump, a cold winter in Europe and Asia, local unplanned-for events (such as a fire at an interconnector bringing electricity into the UK from France), and complicated geopolitics have all contributed to surging wholesale gas prices globally.

However, with some of the leakiest housing stock in Europe and a high reliance on gas to heat homes and cook dinner, the UK is being hit particularly hard by the crisis.

And it is running out of far more than gas. Quietly, Britain has already been struggling through a summer of discontent. Week by week over the last few months, when Johnson and his cabinet were grappling with the Afghanistan airlift, supply chains broke down as a lorry-driver shortage of more than 100,000 affected the country’s stock of everything from McDonald’s milkshakes, to blood test bottles, to the chemicals used to clean water.

[See also: Leader: The shortage society]

Brexit, exacerbated by Covid-19 restrictions, caused a mass exodus of European lorry drivers from the UK to their home countries, and HGV driving tests were paused during the pandemic, contributing to the shortage of drivers.

The Environment Agency has already had to relax rules on water cleaning standards up until 31 December, as lorry drivers who would usually ferry the required chemicals around the country will be in even greater demand over Christmas.

By the Friday of the Prime Minister’s trip, petrol stations had begun to close as three of the UK’s biggest operators of petrol stations warned of fuel shortages at some forecourts due to a shortage of drivers.

Political polling from over two decades ago has been the subject of recent Cabinet Office discussions, as Conservative politicians fret that the only time New Labour’s poll ratings fell below those of the Tories during Tony Blair’s popular first term was amid the fuel shortages and protests of 2000.

The Transport Secretary Grant Shapps has hinted that he may relax visa rules to recruit more foreign drivers – anathema to a government that is leaning on businesses to fill the void with British workers.

“Brexit has been a huge factor because a lot of the guys and girls had to go home and now they can’t come back,” says Tom Reddy, 36, a lorry driver of 15 years based in Stratford-upon-Avon who works 1am-4pm shifts driving milk to supermarkets.

“Us drivers are being paid more, but it’s not solving anything because the prices of petrol, bread, gas, living costs are going up, and it will hit the people at the bottom”

“It is skilled work but we don’t recognise blue-collar skills in that way, and it’s very hard to get the political class to listen because it’s not the kind of work they’ve experienced themselves.”

Although Reddy received a 40 per cent pay rise overnight at the end of August, taking him from £17.50 an hour to £24.50 an hour on Sundays (the best-remunerated shift), he wants to leave the industry this month.

“We’re all exhausted, we’re all knackered,” he says. “I feel a bit broken from it, the hours are too much and I want to spend more free time with my partner and her kids.”

Difficult working conditions, including long hours, sleeping in lay-bys, loneliness and lack of exercise, make it difficult to recruit more drivers. Reddy fears this understaffing will ultimately make food more expensive and consumers worse off.

“I’m happy for drivers as the money is a bit ridiculous at the moment, but it’s not solving anything because the prices of petrol, bread, gas, living costs are going up, and it will hit the people at the bottom.”

Voters have noticed the disruption. During recent months, 69 per cent of Britons say the cost of their regular food shop has increased, 67 per cent have seen fewer supplies than usual on supermarket shelves when food shopping, and 63 per cent are concerned about experiencing food shortages in supermarkets in the coming months, according to exclusive polling of British voters for the New Statesman conducted by Redfield & Wilton on 22 September.

Over summer, the high street chain Nando’s had to close about 50 restaurants after running out of chicken. Customers of the Greggs bakery chain (whose Westminster branch is particularly popular among politicians) noted a lack of chicken bakes, and Costa cafés suffered a scarcity of products including decaf coffee and strawberry lemonade. Some Wetherspoon pubs ran out of certain brands of beer.

“There’s no doubt that very quickly, the political debate is moving onto the central issues of the economy”

Brexit hasn’t only resulted in a loss of lorry drivers. Fruit and vegetables are rotting, unpicked, on agricultural land in some parts of the country. Farmers cannot find the European workers who have been in ever-shorter supply since the Brexit transition period ended in January.

One owner of a vineyard in Sussex explained to the New Statesman that they could no longer source their usual team of Lithuanians to do the painstaking work of removing vine leaves to expose grapes to the last of the September sunshine, as they would each year. No one is available to replace them.

An influx of staycationers to Cornwall, Devon and other popular UK holiday destinations over the summer exposed an extreme shortage of staff in pubs, cafés and restaurants. Reports of overworked waiting staff in tears reached the national news, as impatient holidaymakers took frustration out on the handful of staff who were at work.

Just after Johnson reshuffled his top team to focus on his reforming domestic agenda, ahead of an anticipated early election in 2023, this consumer crisis has thrown him off course. Millions likely to be hit with higher energy bills in the coming months, and the cost of living will increase.

New policies introduced by this government will also hit voters directly in the pocket.

The temporary £20-a-week uplift to Universal Credit, introduced by the Chancellor Rishi Sunak last March to help people through the pandemic, is ending in October, colliding with the energy crisis.

This will be the biggest overnight cut to benefits since the creation of the welfare state in 1945. Half a million more people face being pulled below the poverty line, including 200,000 children, when the cut is implemented.

“This is essential income support for millions of people, and taking it away at this stage – particularly when it looks like we’re going to have big increases in the cost of living in the coming months – is just very bad timing,” says Damian Green, who was work and pensions secretary in 2016-17 and represents One Nation Conservative MPs and peers.

“There’s no doubt that very quickly, the political debate is moving onto the central issues of the economy, which are a more traditional political debate,” he warns.

Although the Prime Minister’s former top aide Dominic Cummings has said there is a 70 per cent chance of No 10 U-turning on the £20 cut (due to being unable to resist “media pressure”), Tory MPs who oppose it fear they are at the “end of the parliamentary road” in their attempts to reverse the decision. An amendment by former work and pensions secretary Iain Duncan Smith was rejected on 20 September.

Instead, senior backbenchers are trying to persuade the Treasury ahead of the spending review and Budget in autumn to offer some concessions, particularly for families with children who claim the benefit.

“We’ve been hit with a rise in our gas bills and the price of food’s gone up. Are they really trying to kill the poor people here?”

Next April, the health and social care levy – a 1.25 percentage point increase in National Insurance to clear the NHS backlog and fund social care costs – will appear on workers’ pay cheques, leaving employees on the average annual salary of £30,000 some £255 worse off.

The furlough scheme, the government’s system for keeping jobs on ice during the pandemic, is also closing at the end of September. Roles that have been state-subsidised for 18 months yet no longer exist in reality will translate into redundancies and more workers encountering the welfare system – claims to which have doubled over the course of the pandemic.

[See also: Britain defrosted: What happens when furlough ends?]

It is starting to look like a perfect storm. Panic is rising within the governing party. Although the National Insurance rise was passed in September without significant rebellion, many Tory MPs remain unhappy with the policy, which is seen as a tax on working-age, lower and middle earners to protect asset-rich southern pensioners.

The New Statesman hears that the grumpier right-wing elements of the back benches resisted rebellion on the issue to keep their “powder dry” for a fight over vaccine passports that never materialised, so they remain battle-ready.

New Statesman analysis of local authority data reveals the tax will also mean northern constituents, whose salaries are generally lower, losing more of their disposable income to pay for higher care costs in the south: a concern among new Conservative MPs representing the so-called Red Wall seats.

[See also: Boris Johnson’s social care tax rise: the north pays for the south, the poor pay for the rich]

The Resolution Foundation think tank calculates that four in ten households on Universal Credit face a 13 per cent spike in energy bills in the same month when their benefits will fall.

Three million households in the UK already have to regularly make a decision on whether to heat their homes or eat. Another half a million households will be in the same predicament from 1 October, when the cap on energy prices will shoot up by £139, the largest ever increase to fuel bills.

And this is not the end of the story. Prices are likely to soar even further next year with the energy cap set to increase by another £280 – before the £139 hike has even kicked in – in April 2022.

“We’ve been hit with a rise in our gas bills and the price of food’s gone up. Are they really trying to kill the poor people here?” asks Deirdre*, 42, a teacher in west Belfast who had to leave her job and bring up her 12-year-old daughter and seven-year-old son alone because of domestic violence.

“If all that’s happening and the extra £20 of Universal Credit, which means a lot to my family, is being taken off, it’s just a joke expecting people to actually survive. They couldn’t have done it at a worse time, just before Christmas.”

Deirdre, who participates in the Nuffield Foundation-funded “Covid Realities” research programme, which documents life on a low income during the pandemic, envisages a winter where she will be “sitting here freezing, looking for jobs, because I can’t afford to put the gas on during the day, and then pull the wool over my children’s eyes when they come back from school and pretend everything’s fine”.

“It’s a strange way to live, and I worry about my own mental health, how that’s going to affect me.”

For all the challenges the pandemic threw at Boris Johnson, his government's greatest vulnerability was exposed not by political opponents, doctors or scientists, but by the footballer Marcus Rashford.

The Manchester United forward’s campaign against child poverty, in particular securing free school meals during school breaks, repeatedly proved too powerful to resist for a Conservative Party marketing itself to the English working classes.

As people's pockets are hit by tax rises, benefit cuts, pricier food shops and bigger fuel bills, the cost of living is likely to define the political terrain, as these problems coincide with the economic shocks caused by Covid-19 and the consequences of a flawed Brexit deal.

And if these problems plunge the country back into the turmoil of the Seventies, a winter of discontent may also begin the autumn years of Johnson’s premiership.

*Second name omitted on request.

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