escaping the (and avoiding a future) fuel crisis

What seemed to spark the fuel  crisis over the weekend was some choice statements from the petroleum industry and road hauliers with leaks and briefings to the media. Over the past 18 months we’ve noticed particular hiccups in the general supply chain and these appear to have intensified over the past few weeks.

As I suggested here, the reasons are perhaps complex. For example, we know that there has been a shortage of HGV drivers and this appears to have been exacerbated in the UK by new visa restrictions and by a lack of training and tests for new drivers during the pandemic. However, as at last Friday we were not facing a fuel crisis. There was, and I understand, remains enough petrol to supply our filling stations and if things had continued, some stations may have experienced shortages but most would have been fine.

What we saw on Friday was in effect engineered panic similar to the kind of rumour that causes a run on the banks – indeed not that similar to the kinds of scenes we saw with some banks during the credit crunch. The result was that petrol stations did run short and it is now going to be very challenging indeed to get them restocked.

It may seem cynical, but it does look as though the weekend crisis has suited the purposes of the Road Haulage and petrol suppliers. You see, it has forced the government’s hand to introduce additional visas for EU based drivers.  The assumption (though they may prove mistaken in this) being that this will enable them to keep wages low.  It is worth remembering that whilst there are arguments in favour of Brexit and against and there are pros and cons in the debate on immigration controls that if our arguments for re-joining the EU and for open borders are primarily about seeing a steady flow of people into low paid manual jobs then in fact our position isn’t that different to that taken 200 years ago by those warning that the end of the slave trade would lead to economic collapse too.

Furthermore, it is perhaps ironic that in effect we saw business owners taking a form of industrial action last Friday in order to suppress wages.  In the 1970s and 80s we grew concerned at the power of the trade unions, especially the NUM to hold the country to ransom through strike action. In the early part of the 21st century, Tony Blair’s government saw how the fuel industry and lorry drivers could exert a similar influence and that’s what we saw again at the weekend.

Therefore, it seems reasonable to me that we shouldn’t just be looking towards short term measures to get us to Christmas but need to be thinking long term and asking “how do we ensure that the country cannot be held to ransom by these powerbrokers?”  Here are a few back of the envelope ideas.

  1. We need to move away from a dependency on low wages to ensure low prices and high choice. Indeed, there are other ways to deliver this.
  2. I do personally support open borders enabling flexible labour markets to ensure that there is a genuine balance of supply and demand but not at the price of point 1. What I would say is that regardless of Brexit, the new immigration rules were clumsy and designed more for the short term ears of back bench MPs and the tabloid press than for the needs of a modern economy.
  3. We need to be reducing our dependency on fossil fuels like petrol anyway. Part of this will involve a greater move to electric vehicles
  4. However, we also live in a country that is perhaps over-reliant on road haulage.  I suspect that this alongside an appetite for processed foods has made Britain more vulnerable to recent pressures than other parts of Europe. So, we probably need to be looking at greater investment in rail.
  5. We need to see transport and communication as linked.  Some things need physical movement but a lot of travel was shown to be less essential during the pandemic.  From that perspective, we probably need to give as much attention to the digital highway as we do to the tarmac one.  One of the most mocked proposals during the last election was to offer everyone free WIFI. That’s not as daft or even as left wing as it sounds or as it was presented.  You see, we don’t charge people to use most of the road network. We see that as part of the necessary infrastructure for the market to function freely.  What if we took a similar view of technology?

So here are just a few ideas for moving away from the kind of dependence on petrol and roads that led to the weekend’s problems.  Have you got any others?