Thread by @pmdfoster

This week @RishiSunak
has put up smokescreen of pre-Budget announcements, but on the front line of the economy business reports it is "handcuffed" by #shortages issues caused by #Covid_19 and
#Brexit -- here's what they mean. 1/Thread #Budget2021

ft.com/content/47582a…

@RishiSunak So we start with Paul Askew @Porkyaskew the chef patron at the Art School @ArtSchoolLpool fine dining restaurant. He needs 36 staff, but only has 30. Hiring in UK is massive struggle; prices of ingredients going up. Some days he can't open private dining room, losing £4k /2

@RishiSunak @Porkyaskew @ArtSchoolLpool BUT he says he has not shortage of demand for his £164 tasting menu with wine flight...his quote sums it up:

“The tragedy is that we’ve got all the demand we can handle. And yet just at the time when we need to restore our cash flows, it’s like we’re handcuffed.” /3

@RishiSunak @Porkyaskew @ArtSchoolLpool For now it is this "handcuffed" economy -- handcuffed by labour and supply shortages (a global and local issue) and rising cost pressures that is the true backdrop of #Budget21 -- even if @OBR_UK is correct to forecast that it's "temporary"...ie will clear by end of 2024-25 /4

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK Which is why business across the board doesn't see the problem as 'transitory' as biz chiefs like @MakeUK_ boss Stephen Phipson warned MPs“...inflation is now more or less baked in...This is not a transitory inflationary demand.” /5

ft.com/content/c7f191…

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK @MakeUK_ So while @BorisJohnson trumpets higher wages in some sectors, like HGV driving, for @theresa_may econ adviser Giles Wilkes @Gilesyb warns that the market can respond to these pressures in other, much nastier ways...higher prices, lower output, more imports, shrinking production/6

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK @MakeUK_ @BorisJohnson @theresa_may @Gilesyb The government says UK industry should pay more, recruit British...but it isn't that simple.

To back to @Porkyaskew, he does apprenticeships, engages with local colleges etc...but recruiting sommeliers, chef de rang etc is still incredibly hard. Just not enough applicants. /7

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK @MakeUK_ @BorisJohnson @theresa_may @Gilesyb This is true also of the meat industry that serves people like him.

The government said EU workers already in UK were the 'buffer' to get them to adjust to post-#Brexit world. But that buffer evaporated over Covid. 1.3m EU workers went home. 500k UK workers retired/8

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK @MakeUK_ @BorisJohnson @theresa_may @Gilesyb Given 60% of 100k skilled UK meat workers are from EU, and natural 'churn' was rate was 12,000pa pre-#Brexit, and these aren't being replaced now. And it takes 18-36mths to train a butcher you can see, as @BMPA_NickAllen says, why things are so tight /8

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK @MakeUK_ @BorisJohnson @theresa_may @Gilesyb @BMPA_NickAllen And as you can see, with 1.1m vacancies in UK economy at the moment this is not limited to just food/hospitality...it cuts across key sectors like construction, entertainment and retail too. /9

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK @MakeUK_ @BorisJohnson @theresa_may @Gilesyb @BMPA_NickAllen The source of these problems is both global....so:

Global: shipping rates from China to UK are up 10-fold; delivery times up from five to ten weeks... per @GeorgeContainer of @SPGlobalPlatts /10

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK @MakeUK_ @BorisJohnson @theresa_may @Gilesyb @BMPA_NickAllen @GeorgeContainer @SPGlobalPlatts This will ease, it will take time. As @GeorgeContainer
says: “Rates will come down, supply will come back online, but these issues won’t be solved completely by the end of next year...if everyone stopped shipping overnight, it would still take six months to clear the backlog.”/11

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK @MakeUK_ @BorisJohnson @theresa_may @Gilesyb @BMPA_NickAllen @GeorgeContainer @SPGlobalPlatts But even when containers do finally land in UK, there are then local crunches, which we well know...caused by HGV drivers. So as @gwyneddshipping boss points out Felixstowe to Chester in north-west England, from about £750 a year ago to £2,000 today./12

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK @MakeUK_ @BorisJohnson @theresa_may @Gilesyb @BMPA_NickAllen @GeorgeContainer @SPGlobalPlatts @gwyneddshipping All of which -- the structural problems above -- explain why across the board business has been asking government for flexibility, particularly on labour. But isn't getting it. Call it a "Covid Recovery Visa" or whatever, but industry says it needs breathing space/13

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK @MakeUK_ @BorisJohnson @theresa_may @Gilesyb @BMPA_NickAllen @GeorgeContainer @SPGlobalPlatts @gwyneddshipping Or as @Walker_Essex from @britishchambers warns, the Govt will be throwing away the £120bn+ is spent propping up biz thu Covid
“To step back now just feels like all of that investment and support will go to waste, this is not the right time to step away."/14

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK @MakeUK_ @BorisJohnson @theresa_may @Gilesyb @BMPA_NickAllen @GeorgeContainer @SPGlobalPlatts @gwyneddshipping @Walker_Essex @britishchambers The wider point here is that while consumers suffer mild inconvenience from shortages, business says it's starting to feel real pain. /15

@RishiSunak @Porkyaskew @ArtSchoolLpool @OBR_UK @MakeUK_ @BorisJohnson @theresa_may @Gilesyb @BMPA_NickAllen @GeorgeContainer @SPGlobalPlatts @gwyneddshipping @Walker_Essex @britishchambers Investment is being crimped; revenues are being lost because of a lack of staff, shortage of deliveries etc.

As @Porkyaskew noted, even Le Gavroche can't find the staff to open at lunchtimes. "If Le Gavroche can’t open for lunch, then we really are in the shit.” ENDS