A junior minister stated on Thursday that consumers should not panic buy things because Britain is not returning to the 1970s-style “winter of discontent” of strikes and power shortages. Soaring wholesale European natural gas prices have sent shockwaves through the energy, chemicals, and steel industries, straining supply chains that were already stretched owing to a labor shortage and the uncertainty surrounding Brexit.
Following a carbon dioxide shortfall caused by rising gas prices, Britain was forced to extend emergency state aid to avoid a chicken and meat scarcity. Last week, Tesco (TSCO.L), the UK’s largest supermarket chain, warned government authorities that a lack of truck drivers would lead to panic shopping in the run-up to Christmas if no action was done.
Some supermarket shelves of carbonated drinks and water were left empty, and turkey producers have warned that if the carbon dioxide shortage continues, families may be unable to enjoy their annual Christmas turkey supper. Small Business Minister Paul Scully told Times Radio, “There is no need for consumers to panic buy.”
When asked if Britain was heading back into a winter of discontent, he answered, “Look, this isn’t a 1970s issue at all.” He was referring to the 1978-79 winter, when inflation and industrial action wreaked havoc on the economy. Tesco’s availability is now good, according to a spokeswoman, albeit the shortage of HGV drivers has caused “some distribution issues.”
“Availability in some product categories may vary,” a representative for No. 2 player Sainsbury’s (SBRY.L) said, “but alternatives are available.” Supermarkets and farmers have urged Britain to address labor shortages in crucial areas such as trucking, processing, and picking, which have put a burden on the food supply chain.
After Brexit made it more difficult for European workers to drive in the UK and the pandemic stopped new workers from qualifying, the trucking industry requires an additional 90,000 drivers to meet demand.
“My company is down roughly 100 HGV drivers, which is making it increasingly difficult to service our stores,” said Richard Walker, managing director of retailer Iceland, who also mentioned that deliveries were being canceled.
“It’s a concern, and as an industry, we’re trying to stockpile inventory in preparation for our busiest season, Christmas, we’re now confronting a shortage at the worst possible time. I’m concerned. “The National Farmers’ Union has written to Prime Minister Boris Johnson, urging him to implement a new visa system as soon as possible to assist alleviate labor shortages throughout the supply chain.
The spike in natural gas costs is exacerbating the instability. This month, six energy suppliers went out of business, leaving over 1.5 million consumers with higher rates.
Drax Group Plc (DRX.L), a power generator, indicated it could keep its coal-fired power facilities operational beyond their planned closure next year, just over a month before Johnson welcomes world leaders at the United Nations climate conference, known as COP26. According to Scully, Britain is in talks with the energy regulator Ofgem over whether or not a price cap on gas and electricity for consumers would have to be raised.
The cap was put in place to prevent energy firms from gauging customers, but it has now made their businesses unprofitable because it is lower than the wholesale price, implying that consumers are being subsidized by energy corporations.
The government will not bail out bankrupt energy companies and will not provide grants or subsidies to larger energy corporations, according to Business Secretary Kwasi Kwarteng. Kwarteng informed parliament, “Government will not bail out bankrupt energy corporations.”