Whitehall must act on skills shortages – or see businesses driven into the ground | Phillip Inman | The Guardian


I f ever there was a time to drop laissez-faire economics in favour of some Whitehall planning it is now.With businesses rapidly running out of stock and the clock ticking on securing imports for Christmas, it would seem sensible for ministers to sit down with the worst-affected industries and work out a plan. Yet the…

imageI f ever there was a time to drop laissez-faire economics in favour of some Whitehall planning it is now.With businesses rapidly running out of stock and the clock ticking on securing imports for Christmas, it would seem sensible for ministers to sit down with the worst-affected industries and work out a plan.

Yet the business community says it is being told to sort itself out , even as the lack of vital components – some of them stuck in China and some at British ports – forces them to lay off staff.

No wonder the number of employees on furlough has plateaued, when the expectation was that the 2 million people being paid to stay at home in June would rapidly fall as the scheme neared its end in September.

Furlough is a boon for companies that have no work for their staff until imports can flow.Some carmakers have scaled down the number of weekly shifts while others have said they will shut down for weeks at a time.

Of course the shortage of semiconductors is not peculiar to the UK.Every major industrialised nation reported similar shortfalls after the world’s main chip manufacturers – in Taiwan, Japan and China – found themselves forced to close down after Covid-19 outbreaks.

Richard Walker of Iceland said the HGV driver shortage meant 30-40 deliveries to its stores were being cancelled every day However the situation is worse in the UK because we had allowed our vital supply lines to become stretched even before the pandemic, with a reliance on overseas workers whom Brexit sent packing.

According to Tesco chairman John Allan, the lack of food on supermarket shelves can be directly linked to an estimated 100,000 shortfall in drivers.He said Britain’s biggest supermarket was struggling to keep up with current demand for food, let alone build up stocks for Christmas.

Richard Walker, Iceland’s managing director, said the shortage of HGV drivers in the UK meant that 30-40 deliveries to its stores were being cancelled every day.

He called on the government to take a sensible approach to Brexit, or the “self-inflicted wound” caused by our hardline approach to EU citizens living and working in the UK was likely to make the situation worse.

The simple solution would be to add lorry drivers to the essential and skilled worker list.Such a move would signal that the government wants to help.

The Road Haulage Association said there were initiatives under way across the haulage industry to train a new cohort of drivers, but a winter meltdown was on its way unless the UK could attract “oven-ready lorry drivers, right here right now”.

The idea of a visa waiver presumes, it must be said, that there are thousands of lorry drivers itching to work for low pay and poor conditions in the UK when there is a driver shortage all over Europe.

The dearth of drivers is not as critical in France, Germany and Spain as in the UK, but still, the UK’s hostility to overseas workers is hardly likely to attract enough of them to reverse the trend.

And the problem is not confined to transport.

The Federation of Small Businesses says the construction, care and leisure sectors are also in crisis “and the government should stand ready to act”.

Business minister Kwasi Kwarteng is hamstrung by his firm belief that the private sector can sort out most problems.He was one of the authors of 2012 book Britannia Unchained , along with other 2010-intake members of the Thatcherite-leaning Free Enterprise Group, among them Liz Truss, Priti Patel and Dominic Raab.

Kwarteng recently set aside his free-market outlook to examine ways to protect British firms in vital industries from takeover by vulture-like foreign buyers .He should extend his statist conversion and look for ways to support businesses affected by skills shortages.

Another Gatwick runway might have a greener side News that Gatwick airport has revived plans for a second runway could be seen as a triumph of the human spirit – or a reminder that, like Freddy Krueger, an unpopular airport expansion proposal is never quite dead.

Having carried a smattering of passengers through 2020, and still fielding about 80% fewer planes than in 2019, Gatwick nonetheless expects it will need to enlarge its capacity for the next decade.

It is perhaps not quite such a leap of faith by owner Vinci, which acquired the airport less than a year before Covid grounded most international aviation.The £500m-£800m investment required to shift and upgrade the emergency runway is significantly less than the cost of a second runway of the kind rejected by the Airports Commission.

And it is far, far less than the money Heathrow plans to spend on expansion.The most pertinent calculation for Gatwick may be that this could see it near Heathrow’s current capacity while its bigger rival’s controversial third runway may still never see the light of day.

Gatwick’s claims to be able to develop sustainably merit little attention: the net zero credentials of either airport are absurd while they facilitate takeoffs and landings by carbon-emitting juggernauts.But its plan does have advantages over the thwarted full-scale expansion it once sought.

The development remains within the perimeter, rather than spreading further into the countryside, and the siting of the runways means the second will be used only by smaller planes.These aircraft are much more likely than large holiday jets to one day be powered by greener and quieter means, be they electric, hybrid or hydrogen.

In a truly sustainable future, the runway’s air traffic could thus be the minor nuisance of short-hop electric air taxis into town.

Otherwise, it may one day prove to be one more folly in a Sussex dust bowl.

Performance related: Michael Murray and Mike Ashley.Photograph: Kirsty O’Connor/PA If the son-in-law rises to £100m, what will Ashley’s staff think? Mike Ashley has never done things by the book.The tracksuit tycoon, infamous for carrying a wad of fifties in his pocket and being able to down a dozen pints, appears to take pleasure in spurning City conventions for listed companies.

His latest wheeze at Sports Direct owner Frasers takes this disdain to a new level.Shunning the universe of seasoned, respected executives from whom he could have picked the next chief executive to run his retail empire, Ashley has chosen his future son-in-law, Michael Murray, instead.

And as if a £1m salary were not enough for Murray, 31, Ashley is also handing him a potential £100m bonus.

That sum, which will only pay out if Murray can more than double Frasers’ share price to £15 by 2025, would put the former festival promoter and property developer in the same league as Jeff Fairburn.The former boss of housebuilder Persimmon became synonymous with excessive pay after the subsidy-fuelled boom in the housing market left him sitting on an £82m bonus.

Ashley has chosen the blunt instrument of Frasers’s share price as the sole yardstick by which Murray will be measured – starting with a period when the company is still being buffeted by the pandemic.

In fairness to Frasers, it has also dangled a juicy carrot in front of other, more junior staff: “Fearless 1,000” is another £100m scheme set up a year ago that could make a select group of shop workers very wealthy indeed if they deliver a share price rise.And Murray, as Frasers’s “head of elevation”, has had some success taking a retailer known for its stack-’em-high, sell-’em-cheap approach into more profitable, upmarket areas.

But the potential gulf that his pay deal creates between the shop floor and the boardroom is uncomfortable, especially after a period when retail workers have had to endure gruelling conditions and deep uncertainty about their jobs.The fact that Ashley plans to hand £100m to a man who is only heir apparent thanks to the luck of meeting his daughter Anna on holiday is all the more staggering.Should it materialise, Murray’s pay packet has the potential to ignite the same kind of outrage as Fairburn’s.


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