Brexit Consequences

[sheldrake]

You're all such pessimists. https://www.cityam.com/sunak-private-eq ... r-economy/

[lpm]

Us? We're talking about global investors. The huge weight of global funds. That weight isn't impacted by trivial things, it moves with deep seated forces.

It's them who are the pessimists. Why? You posted that UK equities are undervalued in this "Brexit Consequences" thread, implying you think Brexit is causing this pessimism.

[sheldrake]

Us? We're talking about global investors. The huge weight of global funds. That weight isn't impacted by trivial things, it moves with deep seated forces.

It's them who are the pessimists. Why? You posted that UK equities are undervalued in this "Brexit Consequences" thread, implying you think Brexit is causing this pessimism.

No, I think there are significant investors who believe that despite all of the market indicators bucking pessimistic predictions for brexit, they *still* think there's room to grow.

Deep down you know this wasn't the conversation you were expecting to have in 2021. You should listen to Larry Elliott more.

[Bird on a Fire]

HGV drivers from the European Union will not come to the UK on short-term contracts to ease the fuel crisis under government proposals announced at the weekend due to poor working conditions in the industry, a union official in Europe has warned.

“The EU workers we speak to will not go to the UK for a short-term visa to help the UK out of the sh.t they created themselves,” said Edwin Atema, the head of research and enforcement at the Netherlands-based FNV union, which represents drivers across the bloc.

lmao https://www.theguardian.com/business/20 ... isis-union

I'm surprised the UK hasn't been able to recruit new HGV drivers from all the non-EU immigrants it's been receiving.

Of course, if pay and especially the exploitative conditions highlighted by the union there improve, that's a very good thing, but it won't happen overnight and doesn't seem to have been anticipated.

In the mean time shops in the EU are reporting shortages of popcorn as we watch the UK turn itself into Vuvuzela.

[sheldrake]

It is actually possible to offer higher pay overnight, where there's a will.

[Martin_B]

It is actually possible to offer higher pay overnight, where there's a will.

But the haulage firms are private companies. Are you suggesting either:
a) the government orders the haulage companies to increase pay, or
b) the government nationalises the haulage industry?

[sheldrake]

It is actually possible to offer higher pay overnight, where there's a will.

But the haulage firms are private companies. Are you suggesting either:
a) the government orders the haulage companies to increase pay, or
b) the government nationalises the haulage industry?

Neither. I'm suggesting the government firmly informs them that they won't be changing immigration policy just to ease their wage bill, that skilled workers are available for the right wage and UK immigration had actually increased over the last 5 years, that the army would support the country until they'd gotten a grip, and that future attempts to negotiate by causing panic buying may have a remedy in criminal law.

A haulage company refusing to increase wages in those circumstances is making its own choice.

[plodder]

It is actually possible to offer higher pay overnight, where there's a will.

But the haulage firms are private companies. Are you suggesting either:
a) the government orders the haulage companies to increase pay, or
b) the government nationalises the haulage industry?

Neither, it's

c) in order to keep in business the hauliers need to find drivers asap, and they'll pass the cost of increased wages onto suppliers (and hence to consumers) if they want the goods.

We'll see inflation everywhere due to Covid unrelockdowns in every country, with a bit extra inflation in the UK because of Brexit. Next up (as I previously said) is interest rate rises.

eta - global. Global interest rate rises.

[sheldrake]

The haulage wages increases won't be free, but I also don't think they will trigger crippling inflation on their own. A HGV driver's wage is a tiny fraction of the retail value of the goods they deliver in a year. Each tanker delivery of petrol is worth about 50k at the pumps, for example.

This is before we consider the 'b.llsh.t jobs' that people could be encouraged out of by increasing wages for genuinely arduous and skilled work. There are some savings to be made elsewhere in the economy.

[Woodchopper]

It is actually possible to offer higher pay overnight, where there's a will.

But the haulage firms are private companies. Are you suggesting either:
a) the government orders the haulage companies to increase pay, or
b) the government nationalises the haulage industry?

Neither. I'm suggesting the government firmly informs them that they won't be changing immigration policy just to ease their wage bill, that skilled workers are available for the right wage and UK immigration had actually increased over the last 5 years, that the army would support the country until they'd gotten a grip, and that future attempts to negotiate by causing panic buying may have a remedy in criminal law.

Are the skilled workers actually available in Britain?

The figures I posted earlier mentioned a shortage of 70 000 drivers while less than 200 were claiming jobseekers allowance. There don't appear to be thousands sitting around waiting for a better offer. Some have left the industry and perhaps could be tempted back from other jobs. But HGV licenses are only valid for five years. So there very likely aren't going to be 70 000 who companies could tempt from other work.

Certainly, high pay would attract people to retrain and take the test, but they probably won't be ready until next year. Before Covid Britain was only training about 10 000 per year. It may be possible to increase that, but how many qualified trainers and testers are there, and how long would it take to increase their numbers?

[sheldrake]

Are the skilled workers actually available in Britain?

The figures I posted earlier mentioned a shortage of 70 000 drivers while less than 200 were claiming jobseekers allowance. There don't appear to be thousands sitting around waiting for a better offer. Some have left the industry and perhaps could be tempted back from other jobs. But HGV licenses are only valid for five years. So there very likely aren't going to be 70 000 who companies could tempt from other work.

We missed a year of new people last year because of test interruptions, and there will be former HGV drivers who can be tempted back by significantly higher wages. I doubt many of them are on the dole. I don't think it will take very long to return to the level of shortages seen a month ago (e.g. barely noticed, and no panic buying). We haven't suddenly lost tens of thousands of drivers in the last month, keep in mind.

[sheldrake]

All of this makes sense to me https://www.theguardian.com/commentisfr ... conomic-uk

I would likely not agree with Larry on lots of details about how high the new taxes should be etc.. but the broad shape, yes.

[Woodchopper]

Are the skilled workers actually available in Britain?

The figures I posted earlier mentioned a shortage of 70 000 drivers while less than 200 were claiming jobseekers allowance. There don't appear to be thousands sitting around waiting for a better offer. Some have left the industry and perhaps could be tempted back from other jobs. But HGV licenses are only valid for five years. So there very likely aren't going to be 70 000 who companies could tempt from other work.

We missed a year of new people last year because of test interruptions, and there will be former HGV drivers who can be tempted back by significantly higher wages.

As I wrote, only if they passed their test in 2016 or later.

I doubt many of them are on the dole. I don't think it will take very long to return to the level of shortages seen a month ago (e.g. barely noticed, and no panic buying). We haven't suddenly lost tens of thousands of drivers in the last month, keep in mind.

Shortages may have been exacerbated by companies running down stocks. If so it'll take more drivers to get back to what it was.

[sheldrake]

Shortages may have been exacerbated by companies running down stocks. If so it'll take more drivers to get back to what it was.

I think that's pretty unlikely for perishables like meat. The primary issue here seems to be very recent panic buying of fuel. We'll have the army to help get things back to normal, and hopefully a very stern rebuke to any members of the haulage industry who may have attempted to trigger hoarding as a negotiation tactic.

[Martin_B]

It is actually possible to offer higher pay overnight, where there's a will.

But the haulage firms are private companies. Are you suggesting either:
a) the government orders the haulage companies to increase pay, or
b) the government nationalises the haulage industry?

Neither. I'm suggesting the government firmly informs them that they won't be changing immigration policy just to ease their wage bill,

OK

that skilled workers are available for the right wage

Are they? This isn't an issue you can just throw money at. Skilled workers take time to train up (and figures of 100,000 required have been mentioned) so possibly also time required to train extra trainers. Those retired/left the industry can't necessarily just come back with the promise of better wages, as there are age limits on work as an HGV driver.

and UK immigration had actually increased over the last 5 years,

So you say, but those people don't seem to have been trained to be HGV drivers, so their presence in the UK is superfluous to your argument.

that the army would support the country until they'd gotten a grip,

No, they can't. The army doesn't have 100,000 trained HGV drivers, either. Gone are the days when any squaddie could jump into a truck and be called a driver. The army is not the answer to provide specific skilled labour when they don't have that skill themselves. That way leads to chaos and multiple accidents on the roads.

and that future attempts to negotiate by causing panic buying may have a remedy in criminal law.

Only if the government can draft a law which outlaws this, and makes it water-tight enough that it survives legal challenge, which given this government's ability to negotiate trade deals, I wouldn't give them any confidence in doing so.

A haulage company refusing to increase wages in those circumstances is making its own choice.

And yet all of the haulage companies in the country have been facing the same issue, and none of them have increased wages by enough to employ these extra 100,000 or so HGV drivers which the country needs. Maybe because there isn't a wage which will make these 100,000 skilled workers magically appear, or maybe because haulage companies are run on such tight margins that a small wage increase makes the haulage industry uneconomic, and trying to pass any increased costs onto the employing company results in loss of contract to a cheaper haulage company. This system is called capitalism, by the way.

[sheldrake]

We haven't lost 100k workers in the last few months, and we won't need that many all of a sudden to get petrol deliveries moving normally again. The army is certainly capable of transporting fuel.

A whole industry is about to learn that sh.t conditions underwritten by a free hand to import labour from much poorer countries is not a sustainable solution and the UK won't be bounced into giving it back to them. In capitalism, when everybody faces the same cost pressure it gets passed up the chain to the consumer. That's ok.

[plodder]

I'd like someone to show me where the figure of 100,000 comes from. I understand that 13,000 non-EU drivers are no longer working here, but I am willing to bet that there's plenty of flab* in the remaining 87,000 that are "needed".

*triple sausage and beans please mate etc

[Bird on a Fire]

We haven't lost 100k workers in the last few months, and we won't need that many all of a sudden to get petrol deliveries moving normally again. The army is certainly capable of transporting fuel.

A whole industry is about to learn that sh.t conditions underwritten by a free hand to import labour from much poorer countries is not a sustainable solution and the UK won't be bounced into giving it back to them. In capitalism, when everybody faces the same cost pressure it gets passed up the chain to the consumer. That's ok.

I don't disagree with this second paragraph at all, fwiw. But I expect solving it will be tricky.

Under-training locals and hiring cheaply from abroad has been the UK's model for decades across many sectors, from fruit-pickers and drivers to medicine and academic research. That model has presumably helped the economy to expand to its current levels, and enabled the present distribution of people into professions.

I'm not sure that there are enough people who aren't currently doing anything useful to be shifted into all these roles, so sacrifices will have to be made in other sectors. What kind of jobs might people who used to be HGV drivers be doing now, for instance? If the number of qualified workers is lower, that does suggest that that some sectors will have to be reduced or automated.

Alternatively, UK companies might seek to recruit qualified drivers from elsewhere, like India or Latin America. Or offer free HGV training to refugees or something. Continuing to exploit people will probably be cheaper, if the government will allow the extra immigration.


And I think the union spokesperson's remarks in the Guardian link I posted are worth considering - pay isn't the only issue. The anti-EU-immigrant rhetoric from the current government (feel free to add a "perceived" there if you like, rather than bickering) is a turn-off. So are the generally crap working conditions, things like bathroom shortages and lack of rest facilities and the time pressure of the work (though they're also a problem in the rest of Europe). Those issues are even harder to remedy.

[sheldrake]

I wouldn't over-invest in the ranting of a union rep who doesn't live in the UK. They almost certainly have their own strong political opinions.

"Alternatively, UK companies might seek to recruit qualified drivers from elsewhere, like India or Latin America."

The key negotiation objective of the haulage association seems to have been to put HGV drivers on a shortage list which allows them to be offered jobs at a lower wage; I would push back on that and say 'you can bring people in, sure, but at the right wage'. Even the current higher limit for skilled workers (25.6k) seems very low to me.

Corporate negotiators have zero shame about spinning financial issues for themselves as social or moral issues (e.g. trying to spin opposition to them undercutting wages as racism or xenophobia). It's very important to call their bluff on this crap.

[Bird on a Fire]

I wouldn't over-invest in the ranting of a union rep who doesn't live in the UK. They almost certainly have their own strong political opinions.

Certainly, but it's echoing comments made many times before by British and EU HGV drivers. Just wanted to remind people that throwing money at the problem might not be enough, if conditions are also offputting.

Given the widespread shortages you've highlighted, HGV drivers can easily pick and choose where they work - why pick the UK with its border hassle and insecure contracts?

"Alternatively, UK companies might seek to recruit qualified drivers from elsewhere, like India or Latin America."

The key negotiation objective of the haulage association seems to have been to put HGV drivers on a shortage list which allows them to be offered jobs at a lower wage; I would push back on that and say 'you can bring people in, sure, but at the right wage'. Even the current higher limit for skilled workers (25.6k) seems very low to me.

That's already below the average salary for an HGV driver, which is apparently over £30k (many similar links available). So there shouldn't be any problem getting foreign HGV drivers into the country for salary reasons. I can't see how lowering the salary offered would improve recruitment.

[sheldrake]

Given the widespread shortages you've highlighted, HGV drivers can easily pick and choose where they work - why pick the UK with its border hassle and insecure contracts?

Contracts don't have to be insecure. Conditions don't have to be sh.t. You can fix these things by spending money. If you want to outcompete the other employment offers, spend more money than them. This is a cross-industry issue, so the cost can be passed. There will be a lot of grumbling about things being more expensive; but what's the alternative? tempt people from much poorer countries and continue to treat them badly and pay less than many new graduates earned 20 years ago? doesn't sound like a good idea to me.

There are pockets of corporate UK (and national and local government) really awash with cash to piss away on pointless things. Absolutely. My own job is like this and I'm ready to pay higher taxes or see some things cost more. We can't carry on treating working class people like an 'expendable' caste either in politics or economics. This is what the left should be focussed on rather than identity politics, or the nuances of international trade associations that have morphed into political unions nobody really voted for.

The UK suffers from massive labour misallocation problems; there are hundreds of thousands, possibly millions of people who should be driving trucks, working in construction, being nurses etc.. who won't because the pay is crap and they've been 'nudged' into believing that a poor quality degree and a dull office job is a route to being 'middle class'. It's mostly a lie, and it's been propped up by international labour arbitrage for a few decades now. It's time to unwind it.

That's already below the average salary for an HGV driver, which is apparently over £30k (many similar links available). So there shouldn't be any problem getting foreign HGV drivers into the country for salary reasons. I can't see how lowering the salary offered would improve recruitment.

They want to extend offers to people from countries who'd jump at the chance precisely so they don't have to offer higher salaries. They're trying to increase their bargaining power over people who are already here by increasing their pool of alternatives, free of price constraints. This is very hard-nosed economics masquerading as liberal-minded internationalism.

[plodder]

I'm not sure it's as easy as raising wages. Hauliers are presumably locked into long-term contracts with the major suppliers, at fixed rates. They will also likely be locked into long-term contracts with finance companies who help them buy the artic rigs (a three year old tractor unit on its own is upwards of £60k, and that's without a trailer*) and they also presumably are locked into service agreements to keep the vehicles roadworthy, rent etc. Fuel costs, new tyres, wear and tear, tax etc all need to be considered too.

So although the cost of wages may be trivial compared to the cost of the load, it's not trivial when compared to the profit per mile the haulier needs to make to have a positive cashflow.


*truck p.rn: https://trucks.autotrader.co.uk/search? ... cks&page=1

[sheldrake]

I have no doubt that there are complexities like those long-term contracts etc.. but the UK now has more freedom to give targeted financial support to industries with structural problems where it is needed.

Do you remember when we had to print hundreds of billions of pounds to bail out people already paid well over 100k a year in 2008/2009 and Gordon Brown was super proud?

This won't cost as much as that. Trust me.

[plodder]

well, that's good, because this is nothing like the same level of crisis. but you're right, thank god ending free movement of labour is allowing us to act to introduce free movement again. That'll teach the ultra capitalist running dogs who loudly sponsored and cheerleaded Brexit a thing or two about sticking one to the proud workers.

eta struck out. I should know better than to engage in this drivel.

[sTeamTraen]

I'd like someone to show me where the figure of 100,000 comes from. I understand that 13,000 non-EU drivers are no longer working here, but I am willing to bet that there's plenty of flab* in the remaining 87,000 that are "needed".

*triple sausage and beans please mate etc

Apparently 70,000 HGV drivers left in the last year, according to the treacherous pinko lefty Remoaners at the Office for National Statistics. That's about 23% of the total. I can easily imagine that the industry was already complaining about the other 30,000 before that, but there's a big difference between 10% and 33% (compare a complete football team playing against another with (a) one or (b) three players sent off).