Rough ride ahead for the UK economy


Panic buying... with looming shortages there is every danger of panic buying leaving empty shelves such as this in a London supermarket. Copyright Photo SHAMLAL PURI

Joblessness soars. Jobs go begging

By: SHAMLAL PURI in London Senior Editor – UK shamlalpuri4@gmail.com

Worth Noting:

  • I spoke to my weekly street garbage collection truck driver outside my office. Asking me to call him Dave, he said with a smile, “If I get an offer as tempting as that, I will surely leave this job and go for the long-haul job.”
  • Home care providers have their own challenges. They have too few staff members to take in patients discharged from hospitals for aftercare.
  • There is a significant departure of staff members said to be leaving in what is being labelled in business circles as “mass resignations” in many professions.
  • The cancer of non-payment of salaries or compulsory pay cuts has hit many workplaces resulting in resignations resulting in under-staffing. Some businesses are using Covid-19 and lack of profitable business as an excuse to hold back salaries.

These are very troubled times for the United Kingdom. The economy is almost in the doldrums, and there are few signs of Covid-19 disappearing from these islands.

The Government of Prime Minister Boris Johnson is trying to wade through choppy waters using what is described as “fire brigade” measures to save the economy.

Long haul trucks are the lifeline of Britain’s supply chain from the factory gate to the supermarkets. Copyright Photo SHAMLAL PURI

It is trying to recoup the billions spent from the exchequer during the last two years of the Covid-19 pandemic.

According to official figures from The Institute for Government, citing official sources, there are many costs associated with the coronavirus pandemic.

An estimated £394 billion is said to have been earmarked from public finances. The costs are still rising. The Government still provide financial support to those in isolation due to Covid.

Back to normal…so they think…crowds gathered in public places in London. Copyright Photo SHAMLAL PURI

The Government raised £317 billion to fund services in 2020/21 alone. It generously spent £192 billion to prop up employees by paying a proportion of their salary through its furlough scheme and help employers struggling to survive with loans.

Some £125 billion was spent providing welfare services to the community, including £1 billion for food parcels to vulnerable Britons.

It spent £76.3 billion directly to meet the demands of tacking Covid-19.

It’s pay-back time now, and Britons are going to go through the rough waters of tax rises and impending shortages.

Prime Minister Boris Johnson this week announced a £12 billion a year social care package, the funds for which will come from increased taxation and National Insurance to those working.

The tax raid means there will be an increase of between £120 for those earning £20,000 annually to £1,505 for higher earners above £130,000 in National Insurance charges.

No doubt, there is a hue and cry over the extra taxation. But there’s nothing like a free lunch, as we all know! And one cannot rule out increases in income tax, corporate taxes, VAT property tax and Council taxes.

The chancellor of the Exchequer, Rishi Sunak, has the onerous task of balancing the books and ensuring the Government’s demand for continued supply of funds from the public to the exchequer.

May the British Government gIve us our daily bread…food parcels for the needy during the pandemic cost £1 billion. Copyright Photo SHAMLAL PURI

Added to the taxation woes is another irony. According to official figures, joblessness has soared to around two million, as businesses of all sizes took a severe thrashing leading to closures and job cuts. Unofficially, the UK’s job losses are put to around 3.5 million.

On the other side of the scale, almost a million jobs are begging to be taken as employers cannot find suitable candidates.

According to a report of the Recruitment and Employment Confederation (REC), the country is facing a crisis of worrying proportions.

The British transport industry is bearing the brunt of these job losses. An increasing number of drivers are dumping their jobs because of poor working conditions and an appalling pay structure.

The transport industry has sizeable numbers from diaspora communities working as short and long-haul drivers.

On the other side of Britain’s borders, swathes of migrants from the poor European Union countries are headed towards the UK searching for jobs. Remember Brexit? Britain’s acrimonious divorce from the European Union just as Boris Johnson came to power.

Chancellor of the Exchequer or Finance Minister Rishi Sunak has the arduous task of balancing the books after Covid-19. Copyright Photo SHAMLAL PURI

One of the aims of Brexit was to cut down on European migrants taking over jobs from Britons and undercutting their prices. But analysing the current situation, this intent has been dented with the number of EU migrants seeking work in the UK.

Take the example of building site workers who took locals’ jobs, including many in the diaspora, depriving them of their livelihoods. An Eastern European worker could undercut day or contract labour charges by some 45%.

Today Britain is battling against an astounding dilemma. There are millions of jobless hunting for jobs, and there are hundreds of thousands of unfilled vacancies.

The situation is so dire that some 1.66 million jobs are going begging in the transport haulage, hospitality, nurses in the National Health Service (NHS)  and carers, among other professions.

Last week, it was reported that an additional 193,000 jobs were unfilled.  Currently, the total number of unfilled vacancies is 953,000, and they are increasing daily.

The blame primarily lies squarely with pingademic – an NHS service that ordered employees to go into immediate self-isolation because they were picked as having Covid. Thousands of workers were forced to go and live in fear.

Added to this are the Brexit, immigration law changes and tax rules.

The overall result of people dumping their jobs in the current scenario.

The shortage of lorry drivers is so intense that it is hitting the haulage industry below the belt.  It has a domino effect on the supply chain.

Hospitals are constantly under pressure in the Covid times. Copyright Photo SHAMLAL PURI

There is a severe danger of supplies to the supermarket chains not being delivered from the factory gates. An added threat is that there are fears there will be a new round of panic-buying and, consequently, empty shelves, as happened last year during the lockdowns.

There are reports of fuel shortages at filling stations run by many Asians in the diaspora. Supplies of alcoholic drinks in the pubs are also hit because there are few drivers to make deliveries. There are more than 10,000 vacancies for drivers.

Haulage companies are so desperate to recruit new drivers that their sights are now on local government employees in the cleaning departments of local councils. They lure heavy-duty truck drivers of garbage collection trucks to cross the floor by offering them pay deals they cannot refuse.

The consequences of such moves could hit weekly rubbish collections that the councils offer to their residents and businesses.

I spoke to my weekly street garbage collection truck driver outside my office. Asking me to call him Dave, he said with a smile, “If I get an offer as tempting as that, I will surely leave this job and go for the long-haul job.”

Home care providers have their own challenges. They have too few staff members to take in patients discharged from hospitals for aftercare.

There is a significant departure of staff members said to be leaving in what is being labelled in business circles as “mass resignations” in many professions.

The cancer of non-payment of salaries or compulsory pay cuts has hit many workplaces resulting in resignations resulting in under-staffing. Some businesses are using Covid-19 and lack of profitable business as an excuse to hold back salaries.

On the other hand, some palliative care providers have been understaffed for the last many months. Recruitment advertisements have not attracted suitable candidates.

The situation is so bad that patients are being turned away due to poor staffing levels. This leaves families struggling on their own with their loved ones desperately needing care.

There were a reported 79,200 unfilled vacancies for nurses and some 50,000 for carers.

The bottom line is for employers to stop cost-cutting and improve pay structures if the situation has to be reversed.

Christmas is three months away, and at the time of the year, preparations are in full swing to cater to crowds of shoppers. If the situation remains the same, one can expect lots of problems.

On Tuesday, UK MPs attended a session at the House of Commons parliament. The Health and Social Care Secretary Sajid Javid took centre stage to prepare for the winter onslaught of Covid, which is expected to increase the number of infected people.

There are clear indications that the country is still battling with the Covid pandemic.

The Government has made it clear that booster vaccinations – the third dose – will be available next week.  Over 50-year-olds, as well as frontline workers, will be given the third dose.

He said that the on and off Vaccination Passport is still on the drawing board and kept in reserve.

The Government is relying heavily on vaccines to strengthen the defences against Covid-19.

Even though it has done away with mandatory wearing of masks and gloves, the Government said Mr Javid does not rule out what he described as ‘Plan B’ – the return of additional measures which includes compulsory masking up, working from home, and lockdowns which it is trying hard to avoid.

Some schools have already sent children home, suspending classes as a precautionary measure.

Interestingly, newsmen observed during the debate over half of the MPs present in the House of Commons, including Mr Javid, were not wearing masks.

They probably set a poor example to the thousands of members of the public who watch these debates televised live on the BBC. It may have been a one-off, but if the leaders did not protect themselves as a matter of personal safety, why would the public do that?

The irony of England is that once they are not legally bound or under the threat of heavy fines, Britons will throw all caution to winds – Covid or no Covid.

The Government is looking at its preparations with a high dose of optimism, relying more on vaccine defences. Still, observers say only time will tell if their judgment is correct.

Covid 19 follows no rules, no protocol, no exceptions – it just strikes very hard without remorse, and it doesn’t care who it takes with it.

The question of lockdowns still occupies the thoughts of many Britons. Lockdowns could be imposed without warning if the situation deteriorates. The economy will no doubt suffer, and the burden of the nation will multiply.

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