UK relaxes antitrust rules, may bring in army to boost fuel supplies

Prime Minister Boris Johnson is considering bringing in Army drivers to fix a supply chain crisis in Britain, with many gasoline stations running dry over the weekend as panic among motorists spread.

The government also moved to temporarily suspend competition rules and allow companies to coordinate fuel supplies to the most affected regions. 

With a shortage of truck drivers raising the prospect of widening disruption to food and fuel deliveries in coming weeks, ministers have discussed starting Operation Escalin, a contingency plan that would mobilize hundreds of troops to drive fuel tankers, a person familiar with the matter said. 

The final decision rests with Johnson, with pressure intensifying after industry groups said his earlier U-turn on relaxing immigration rules for foreign truckers and poultry workers would not fix the problem. The government has already called in Army examiners to help ramp up truck-driving tests. 

“We have long-standing contingency plans in place to work with industry so that fuel supplies can be maintained and deliveries can still be made in the event of a serious disruption,” Business Secretary Kwasi Kwarteng said.

Falling Short

Businesses and opposition politicians said the 5,000 new visas for haulers until Christmas would barely scratch the surface of a 100,000 shortfall that’s been exacerbated since the U.K. left the European Union. Ruby McGregor-Smith, president of the British Chambers of Commerce, likened the visas to “throwing a thimble of water on a bonfire.”

Drivers queue for fuel at a Tesco petrol station in Ashby-de-la-Zouch, U.K., on Sept. 24. (Photo: Bloomberg)

While some countries across Europe are contending with soaring energy prices and pockets of labor shortages, the U.K. is facing a particularly taxing winter as it recovers from the pandemic. Recent weeks have seen hospitals struggling with a backlog of patients, empty supermarket shelves and now lines at gasoline stations.

Keir Starmer, leader of the opposition Labour Party, blamed Johnson’s government for failing to prepare for the consequences of Brexit. The U.K. voted to leave the EU in 2016 and its post-departure transition agreement ended at the beginning of this year. “We’ve got an absolute crisis in this country through a lack of planning on behalf of the government,” Starmer said.

Finding Truckers

BP Plc, the second-largest fuel retailer in the U.K., said it had run out of the main grades of fuel at almost a third of its stations. Outside the motorway network, at least half of petrol stations had run dry by Sunday, the Financial Times reported, citing Brian Madderson, chairman of the Petrol Retailers Association.

Transport Secretary Grant Shapps on Sunday sought to allay concerns, telling BBC television “there’s actually plenty of petrol to go around.” The shortage of drivers for the fuel supply industry amounted to “one, two, three hundred.” He nevertheless left open the prospect of drafting in the army to supply petrol stations. “We’ll do whatever’s required.” 

Until the weekend, the government had insisted that haulage companies should train up locals and paid them more. The changes to immigration rules -- which also add 5,500 visas for poultry workers -- lasts for 12 weeks. 

Johnson has talked up Brexit as an opportunity to remake the British economy away from the EU’s rules and its labor pool. The argument is that foreign workers dragged down domestic wages and discouraged recruitment and training. But business argues it needs a longer period to transition away from that reliance on EU workers. 

Furlough Ends

The food and fuel shortages add to a pile of daunting challenges for Johnson, with Britons facing a surge in electricity and gas prices just as some key pandemic support measures are unwound. 

The flagship furlough program that saw the government pay the wages of more than 11 million jobs during the pandemic ends on Sept. 30. The Labour Party released analysis late on Sunday that showed some 81,000 aviation workers are among those who risk losing their jobs when the furlough program closes.

On Oct. 6, a 20-pound ($27) weekly uplift on social security payments called Universal Credit comes to an end, a decision that’s caused disquiet among Conservative rank and file because of its effect on poorer people.

Newspapers have started referring to a “winter of discontent,” a politically charged phrase evoking memories of 1978-79 when the U.K. economy was brought to its knees by strikes and severe weather. It ultimately brought down the Labour government, ushering in the Conservatives under Margaret Thatcher. 

Tory ‘Scum’

“We’ve got energy shortages, we’ve got shortages in our supermarkets,” Labour’s Starmer said. “We’ve got prices going up. We’ve got taxes going up on working families and we’ve got the government taking away a thousand pounds from those that need it most.”

Deputy Leader Angela Rayner put it more bluntly, describing the Conservatives as “scum” at an event at the Labour’s annual conference. That sparked a fresh squabble within the party just when it was aiming to demonstrate to the electorate it was united and ready to govern. 

On Sunday, she refused to apologize for using the word, saying it was northern English working-class “street language” and that she was only referring to members of the cabinet. “I was speaking to a group of activists to say you have got to get that fire in your belly,” she said.