Monday 23rd Oct 2017 - Logistics Manager

Supply chain workers: raising the cost of Brexit

Almost one in eight retailers have raised prices since the Brexit vote and rising employment costs could drive further price rises, the British Retail Consortium revealed this week.

Malory Davies, Editor.

The timing of the BRC intervention is not accidental – this week sees the fifth round of talks between the EU and UK negotiators – and citizens rights is central to the agenda.

Already, 22 per cent of retailers say that EU nationals have left the UK, and 39 per cent says that some of their EU nationals are considering leaving.

On top of the retailers that have already increased prices, about 25 per cent say they are considering raising prices in the future to offset further rises in employment costs.

No wonder the BRC has come up with a series of proposals to safeguard the retail workforce.

The problem retailers have is that there are now 170,000 EU nationals working in retail in the UK – most of them in warehousing and logistics.

EU nationals make up 34 per cent of the workforce in retail logistics in the London, 26 per cent in the Midlands and 23 per cent in the South and East, the British Retail Consortium says.

The foods and drink supply chain is particularly reliant on EU nationals – they currently make up one third of the permanent workforce.

BRC chief Helen Dickinson said: “The UK’s decision to leave the EU has created uncertainty, not only for business, but for the people from the EU they employ. These are real people with families, livelihoods and homes in this country. It is not right that 16 months after the referendum these people still don’t have the security they need to continue their lives.”

The BRC proposals focus on delivering certainty on employment now with automatic transition of settled status for those who have already acquired permanent residence and EU law. For the future it wants effective integration between the new immigration system and UK employment law and a focus on skills development in the UK labour force.

In practice, it is a direct challenge to the Brexiteers, for whom the whole point of leaving the EU is to reduce the number of EU nationals working in the UK. And there is all too obviously a battle going on between the government over “hard” versus “soft” Brexit.

Prime minister Theresa May on Monday complicated the issue further by suggesting that there might be no deal at all – the hardest possible Brexit.  However, negotiations are continuing so, by the end of this week, we might know more about what Brexit will mean in real terms for these workers.

It seems unlikely, though, that a proper resolution is going to be achieved sooner rather than later. And that means that managing uncertainty will continue to be a key skill for supply chain professionals in the months to come.