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The ongoing supply crisis has been causing problems in the UK, which has faced lorry driver, petrol and food shortages in recent months. But what is really behind it? And just how bad is it?Economist Julian Jessop, a former chief economist at the Institute of Economic Affairs, tackles your questions:Q: If the unique UK supply chain issues aren’t due to Brexit. Not due to the hostile environment towards “foreigners”. Not due to the ongoing raging epidemic in the UK. Not due to the obnoxious ineptitude of your current regime.Then what can it possibly be?Old DaneA: With the exception of the recent panic at the pumps (which was uniquely British), the UK is not the outlier that many assume. Supply problems and labour shortages are global: the US is being hit just as hard as the UK, partly because both the US and UK have seen a relatively strong recovery this year and are therefore running into capacity constraints sooner. This is not to deny that Brexit is a big issue in some sectors (e.g. shortages of agricultural workers). But they are other non-Brexit UK-specific factors too (e.g. impact of new tax rules for agency drivers).Q: Since using the ‘B word’ is forbidden by the Tories as by Labour there has to be another reason why our shortages lead to empty shelves here at home and not in the EU.So I’m trying some things here, could it be that our rules and legislation are simple to hard on professions? Do HGV drivers really need all that training? How often does an HGV driver for example has drive through narrow streets? Butchery is another example. Are we all not able to cut meat at home why have special rules for those in the business?BradA: Sorry but I don’t accept that food shortages and empty shelves are widespread in the UK. Retailers are reporting only patchy disruption, with alternative almost always available. The recent problems at the pump are an exception, but this was driven by panic buying which turned a minor hiccup into a genuine crisis.Rest of EuropeQ: Would being a member of the single market have avoided the current supply crisis?SturlusonA: Not avoided completely – these are global problems – but perhaps reduced. The end of free movement of labour from the EU after leaving the SM has definitely contributed to the labour shortages in some sectors. Nonetheless, this could still have been handled better with a more flexible post-Brexit visa system (the UK govt is at least now doing something about this).Q: Let me put it this way (I live in Italy): I have not personally seen, read of in the press, seen on TV, heard from friends or acquaintances of any shortages of any kind in shops and supermarkets. Not now, not during lockdown. LhctsA: I live in the UK and have yet to see any food shortages or empty shelves, but doubtless I’m biased! Retailers themselves are only reporting patchy disruption, with alternatives almost always available. Worth noting too that UK food price inflation remains relatively low.Lorry drivers shortagesQ: Surely, restoring the DVLA to a functioning unit is the highest priority and yet a settlement was agreed between unions and management but it was overruled by the minister, Grant Shapps, and then there was silence.Four thousand new licenses are sitting on a DVLA desk(s) and so 4,000 trained HGV drivers actually in the UK cannot ply their new chosen trade.I wonder why the government prefers to import foreign drivers rather than expedite new UK trained HGV drivers? This appears to be perverse behaviour.Mr BishiA: You’re right that allowing in more EU drivers can only be short-term fix, especially as there are shortages of drivers in the EU too. But I personally still think it was right to extend more visas to help deal with a short-term problem. And even more important in sectors like agriculture, where the UK is heavily dependent on EU workers (and this isn’t going to change overnight).Interest ratesQ: When, and how much by, do you think interest rates will rise? And what might happen as a result? ThanksForthavenA: If I were setting rates I would already have raised them! GDP and employment are now back at or close to pre-Covid levels, and inflation is heading further above target, and yet rates are still at an emergency low of just 0.1 per cent. I suspect though that the Bank will only move slowly, perhaps to 0.25 per cent by the end of this year and back to the pre-Covid level of 0.75 per cent later in 2022. These would still be exceptionally low levels and rates would only be going up because both activity and inflation are stronger than expected – context is important. More

Southeastern’s train service has become the latest rail franchise to be taken over by the UK government after being brought back under direct public control following an investigation into the franchise holder’s finances.Govia – a joint venture between Go-Ahead Group and Keolis which had owned the line since 2006 – was stripped of the service last month after it failed to declare more than £25m of taxpayer funding.The Department for Transport (DfT) will now run the Southeastern network under the Operator of Last Resort (OLR) scheme.The network, which is one of the busiest in the UK, stretches across southeast England and includes London, Kent, East Sussex and the High Speed 1 line.However, the change is unlikely to lead to any immediate changes for passengers as the trains, timetables and fares will remain the same and staff will stay in place.“Whoever runs Southeastern, passengers will want a reliable service which delivers on their key priorities: a punctual, reliable, clean train, with enough room to sit and stand, and value for money fares,” Anthony Smith, chief executive of passenger watchdog Transport Focus, said.The OLR scheme has previously been used to take over two other franchises, with the London North Eastern Railway launching in 2018 and Northern Trains launching in March 2020.Cat Hobbs, director of the public ownership campaign group We Own It, said that the takeover of Southeastern showed that it was “time to bring the whole rail network into public hands”.“Again and again, privatisation is failing our railway and franchises are being brought into public ownership one by one,” Ms Hobbs said.“Profit-driven companies won’t put passengers or the public first – especially as the railway is a natural monopoly where we don’t have a choice between companies.”Earlier this year, transport secretary Grant Shapps said that an investigation by DfT had found that Govia failed to declare more than £25m of historic taxpayer funding that should have been returned.Mr Shapps warned that the government would not accept “anything less” than “absolute transparency with taxpayer support” for rail franchises.Go-Ahead Group’s chief financial officer Elodie Brian also resigned following the announcement that Southeastern was to be taken over.Further investigations are being conducted and the government is considering options for more action, including financial penalties. More

Relatives of Sir David Amess expressed bewilderment and shock at his killing as hundreds of well-wishers lit candles and left tributes at the scene of the attack in Southend, Essex, on Saturday. Two cousins laid flowers outside the church where he was stabbed multiple times during a meeting with constituents.“Can’t believe this has actually happened,” read an attached card. “RIP David. Thinking of your lovely family. We will always love you. Cousins Moira and Pat.”Paramedics tried to save the Conservative MP’s life for more than an hour on the floor of Belfairs Methodist Church in Leigh-on-Sea. The suspect, a 25-year-old man who made no attempt to flee, was arrested on suspicion of murder. More

The majority of companies in the manufacturing and services sectors are reporting near record-high problems with recruiting enough staff, according to a new survey.More than nine in 10 employers in hospitality and catering are having difficulty finding staff, the poll of more than 5,600 firms by the British Chambers of Commerce suggests.Earlier this week, it was reported that the number of job vacancies across the UK reached a 20-year high of 1.1 million between July and September – more than double the number at the start of the pandemic, according to the Office for National Statistics.Adrian Hanrahan is the managing director of Robinson Brothers, a chemical manufacturing company in West Bromwich.The company employs 260 people and is currently trying to fill more than 20 vacancies.Mr Hanrahan said: “We have recruitment issues right across the board, I have never had anything like it before.“What we are struggling with is getting people in full-time posts, and this has been going on for some time.“It includes everything from engineering and maintenance to research, customer services and production operators.“It is a real challenge. We have raised our salaries and we still cannot find them, but we are a family business and there are limits to what we can do.“Pre-Brexit and pre-Covid we always had one or two vacancies, but this current scale is unprecedented. Everyone is looking for people.”Jane Gratton, of the British Chambers of Commerce, called for more targeted post-Brexit immigration measures to help companies find enough workers.She said: “It’s clear that staff shortages are worsening, impacting on recovery and growth for manufacturers and services businesses alike.“Recruitment difficulties mean vacancies are left unfilled and firms are struggling to maintain normal operations. While employers are investing more in training, apprenticeships and flexible working practices, this will not improve things overnight.“We need Government help to provide a more flexible skills system, rapid retraining opportunities and targeted immigration initiatives to plug skills and labour gaps.“Wage pressures and energy prices are also ramping up the cumulative costs and there is a limit to how much more can be absorbed before firms are forced out of business.“If action is not taken to address the mounting problems revealed by these data, then businesses will also face extreme difficulty in meeting demand and consumers will see further reductions in the goods and services available to them as we progress into winter.”The warnings over the manufacturing and services industry comes after care sector bosses in England said that they are struggling to recruit and retain staff.Industry body Skills for Care said that more jobs –about 100,000 of them – are unfilled now than before the Covid pandemic.There has also been a shortage of HGV drivers, warehouse staff, and slaughterhouse workers. More

The UK could be forced to rely on other nations for key nuclear and defence components unless ministers offer heavy industry an energy bailout, The Independent has learnt. Without fresh funds factories could be forced to halt production of critical inputs such as high-tech ceramic coatings, steel components and bespoke glassware, according to government and industry sources. Such products are used in a range of high security environments, including nuclear reactors, laboratories, ships and submarines. Britain would be forced to seek many of these inputs from overseas if these domestic companies fail, according to industry and government sources. This could breach some departmental procurement rules and the government’s aims laid out in its Integrated Review. The review pledged to “strengthen the resilience of our critical supply chains” so that the UK can engage with China “with confidence”. The government is looking to push China out of key nuclear power projects over security concerns. Last month fresh details of plans emerged to force Chinese energy giant, CGN to give up its 20 per cent stake in the Sizewell C nuclear plant in Suffolk. Concerns over whether a failure to secure financial aid will push sensitive suppliers to the wall will add to pressure on the Treasury, after Kwasi Kwarteng, the business secretary, presented a plan to the department for assistance for industries worst-affected by soaring energy prices. The cabinet minister made a formal request to Rishi Sunak’s department for support to energy intensive industries on Monday amid growing calls for emergency assistance and warnings over job losses. It followed a string of bilateral meetings with representatives of ceramics, steel, glass and chemicals industries throughout Monday. The renewed drive to engage with industry came after The Independent revealed last week that factories in these sectors could shut down production lines within weeks if there was no government aid to ease pressures from rising energy costs. Energy can account for as much as a third of the outgoings of these firms, leaving them highly vulnerable to the recent spikes in electricity and gas prices. A government source told The Independent that BEIS (Department for Business, Energy, and Industrial Strategy) had submitted proposals to Mr Sunak’s department – but details were not immediately clear. They confirmed that both industry and the business department the manufacturers’ role in critical supply chains as part of their discussions with Number 11. A business department spokesperson said: “We are determined to secure a competitive future for our energy intensive industries and the sectors reliant on them, including nuclear and defence, and in recent years have provided them with extensive support, including more than £2bn to help with the costs of energy and to protect jobs“Our exposure to volatile global gas prices underscores the importance of our plan to end Britain’s dependency on fossil fuels and build a strong, home-grown renewables sector so we can protect consumers​, including these industries, into the future from gas prices set by international markets.”Mr Kwarteng’s request follows a public spat between the two departments over the weekend. The business secretary was accused of “making things up” during broadcast interviews, after he suggested that the Treasury was engaged in talks on over support for heavy industry. Number 10 sought to draw a line under the row on Monday, lending its support to the business secretary and insisting that the Treasury was playing a role in the cross-Whitehall talks. “This is a significant challenge, and there’s work across government to mitigate it,” the prime minister’s official spokesperson said. However, they stopped short of confirming and declined to elaborate on whether “mitigations” would include financial support, saying: “I’m not going to jump ahead of any future conversations. It’s right that we continue to listen carefully to what industry are saying and have talks across government about whether any action is needed to mitigate the challenges.” There is recent precedent for government intervention in one of the sectors most-affected by the rise in energy costs. In July, the Ministry of Defence (MOD) bought steel-maker Sheffield Forgemasters. It said the move would protect supplies for the defence and nuclear programmes. Last month the government also provided a temporary bailout to CF Fertilisers, which produces around 60 per cent of the UK’s carbon dioxide used in industries metal production to food storage. The sharp rise in energy prices has prompted a fresh examination of the UK’s reliance on energy imports. While Britain has not generally sourced its natural gas from Russia, other major European economies do. A reluctance on Russia’s part to increase its exports to the continent in the face of supply shortages has increased pressure on the some of the UK’s key suppliers, such as Norway. Conservative frontbencher Lord Agnew also said on Monday that soaring energy costs were nothing to do with a lack of global gas stocks, but rather due to a “geopolitical move” by Russia to put pressure on Europe. The remarks appeared to be the strongest language yet from the government, with the Treasury minister directly pointing the finger at Moscow for the current crisis. “The current squeeze on gas prices is nothing to do with the quantity of gas available,” he told peers in the House of Lords. “It is a geopolitical move by Russia to put pressure on Europe and we are caught up in that. Public ownership of our own utilities would make no difference.” The peer’s comments followed a call from Labour’s shadow Chancellor, Rachel Reeves, for the Treasury to support energy-intensive industries. She also accused the chancellor of being “missing in action” over the crisis. “A temporary increase in energy prices must not mean great industries like steel, ceramics, glass, paper and chemicals disappear, just because they happen to be intensive users of energy,” the shadow chancellor said, urging the government to “get an immediate grip” on the situation. More

Social care could be drastically cut unless chancellor Rishi Sunak provides a substantial injection of funding to local authorities, council leaders have warned.England’s largest councils say they could be forced to slash services in the face of a multi-billion-pound black hole in their finances.County councils have calculated they will have a £2.8bn cash shortfall in the next three years even if council tax bills rise by 1.99 per cent each year, the maximum allowed for general spending.The chancellor is thought to be considering allowing local authorities to raise council tax to address their shortfall without the need for a referendum, just as other household bills are already going up.But the County Councils Network said the only way to avoid major cuts to services would be to increase council tax by up to 7.99 per cent every year, which would add £392 to an average bill over the next three years.Council leaders said that with the cost of living rising, a total rise of at least 24 per cent would be unacceptable and unfair on households.A rise of that scale would mean the average Band D bill would average £2,386 a year by 2025, up from £1,898 now.Councils were already struggling from years of austerity even before coronavirus hit, but lockdowns and social distancing caused their income to plummet and they faced extra bills for supporting people through the pandemic.At the start of the year, authorities warned they were up to £2.2bn short of funding.Hiking council tax cannot be the sole answer to filling the shortfall, argued the county council chiefs, who called for a chunk of cash for the next three years in Mr Sunak’s spending review on 27 October to avoid services being slashed.Authorities said they were facing the most significant pressures in social care, so fees in adult social care could be increased and preventative services in children’s social care cut back.Other potential effects include tightening eligibility criteria, the leaders warned.The £2.8bn cash shortfall was calculated from the financial plans of the 36 councils that belong to the network, which cover almost half of England’s population.Although council tax is imposed by district councils, bills include a “precept” for the counties.They predict the legacy of Covid-19, such as greater demand for children’s services and higher costs in adult social care, will keep straining their budgets in future years.It’s thought Mr Sunak is considering letting local authorities increase the social care precept element of council tax above the 2.99 per cent limit.Carl Les, finance spokesperson for the County Councils Network, said: “County local authorities face an extremely difficult three years coming up, with rising costs of delivering services, demographic pressures and the legacy of coronavirus meaning that we need to find savings or increased income of £2.8bn over the next years to balance our books.“We are acutely aware that the cost of living is rising and that many households have suffered from the economic impact of the pandemic.“Therefore, large-scale council tax rises to make up our funding shortfall would be unacceptable and unfair for hard-pressed residents.“It would also be an unsustainable approach to funding services, raising variable amounts across the country.“We appreciate the tight fiscal environment facing the chancellor, but we are calling on the government to inject further funding into the system for local authorities over the next three years, in order to avoid a further round of large-scale reductions in services.“The government’s levelling-up agenda must begin with making public services adequately funded.”The Independent has asked the Treasury to comment. More

As Boris Johnson roused the Tory party faithful in Manchester with his speech about economic growth and rising wages, 200 miles away food bank users were streaming in. “Things are more expensive,” said Joan, sitting amid rows of tins, pasta and other produce in Dad’s House, a charity that runs a foodbank in southwest London. “Things are great for people who are working and don’t see all this. Because I never used to see this.”She started coming to the food bank earlier this year after losing her job as a nanny.“I used to give things to a food bank. I never used to come here myself,” she said.In his widely criticised speech on Wednesday, the prime minister mentioned the word “growth” six times and twice praised Britain as the fastest-growing economy in the G7.The Conservatives had “fixed the economy”, he told party members, moments before promising: “We are going to fix this economy.”He also said the “present stresses and strains” of the economy – labour shortages, soaring household energy costs and warnings over food supplies – were “mainly a function of growth and economic revival”.But visitors to Dad’s House told The Independent the economy is not working well for them. “It’s hard to keep your head above the water,” said John Krell, who is retired. “We have gas and electric going sky-high.”The 70-year-old said he has bought a headtorch “like you would wear in the mine” and goes to bed at 7.30pm to avoid putting the lights on.“What a life,” he says. “Who would’ve thought that, years ago.” Azahia Atnane has not been able to find a job. Her husband works part-time as a waiter but would like to be full-time.“There is no employment,” she says. Now, she is bracing herself for the impact of the cut in Universal Credit as its £20-per-week extra – introduced during the pandemic – is scrapped.Food banks were preparing for a surge in demand as the change in Universal Credit came into force from Wednesday, amid warnings vulnerable people could be plunged into poverty “almost overnight”. Billy McGranaghan, the founder of Dad’s House, told The Independent there had already been an increase in users over the past month – ten to 15 more each week.Among the new users are young people who had lost jobs in hospitality, he said.In his Tory conference speech, Mr Johnson said the government was tackling what he described as the UK economy’s “long-term structural weaknesses”.He said the country was having a “change in direction” with a move to a “high wage, high skill, high productivity” economy. More

Food banks are expecting a surge in demand for their services and say vulnerable people will be plunged into poverty “almost overnight” because of a cut to Universal Credit.The £20-a week uplift, introduced at the start of the pandemic, is set to be scrapped despite fears hundreds of thousands of people will be “massively hit”. As an estimated six million of the UK’s poorest brace for the change to their incomes from Wednesday, groups that run food banks have shared their concerns over what this change will mean for their users. “We’re anticipating a huge surge in need for independent food banks as the impact of the cut to Universal Credit and cost of living increases take hold,” Sabine Goodwin from the Independent Food Aid Network told The Independent.“On top of this, many of our food banks are struggling to access food supply.” The co-ordinator at the group, which represents over 500 independent food banks in the UK, added: “It’s critical that the government reverses its decision on Universal Credit and ensures social security payments and wages match the cost of living so we can put an end to poverty and the need for food banks in the UK.”The Salvation Army also said it was bracing for a surge in demand for its food banks.“The government worked hard throughout the pandemic to protect people from financial hardship, but the loss of the furlough scheme and the Universal Credit uplift will plunge vulnerable people into poverty almost overnight,” Lieutenant-Colonel Dean Pallant from the charity and church said.The charity’s food bank in Keighley gave 3,600 people food parcels during the 12 months to March 2020, which members fear will get worse with the benefits cut. Meanwhile, Bradford Central Foodbank helped 2,500 people in just one month during the pandemic and manager Josie Barlow said many more will soon need support. She told the BBC: “People will be massively hit by the cut in Universal Credit. People going from £409 as a single person down to £323 a month. It is a 21 per cent cut in income.”She added. “Especially in winter with electricity bills, fuel prices are rising, that combined with the furlough scheme ending, it is going to really push so many more people to needing a foodbank.”Gary Stringer, a volunteer at the same foodbank who is on Universal Credit, told the BBC the weekly cut of £20 to the payment was a “big concern”. “I do worry about it because I’m trying to look for work at the moment. There is nothing available,” he said. From Wednesday, no assessments will include the uplift, meaning that from 13 October – a week later – no payments will be received that include the extra money.Boris Johnson is preparing to tell the Tory party conference his “levelling up” agenda is key to supporting left-behind communities.Ahead of this speech, Dominic Raab, the deputy prime minister, defended the £20 weekly cut.“Of course the emergency support we have provided was because of the pandemic,” he told Sky News. “As we come through the pandemic, with youth unemployment going down, employment going up, we need to transition. We don’t want to see people reliant on the welfare trap.”But the change has faced criticism from charities, think tanks and unions from across the political spectrum and calls for the government to U-turn on the decision.The Whitehawk Foodbank in Brighton called for the £20 top-up to be reinstated “immediately”. It said it gave out a “staggering 3,689 parcels” last year and was “concerned this will increase again”. The Trussell Trust, which has a network of hundreds of food banks in the UK, also said it wanted to see the decision to cut Universal Credit by £20 a week reversed. A government spokesperson told the BBC: “As announced by the chancellor at the budget, the uplift to Universal Credit was always temporary. It was designed to help claimants through the economic shock and financial disruption of the toughest stages of the pandemic, and it has done so.” They added: “Universal Credit will continue to provide vital support for those both in and out of work and it’s right that the government should focus on our plan for jobs, supporting people back into work and supporting those already employed to progress and earn more.”The Treasury has been contacted for comment by The Independent. Additional reporting by Press Association More