Britain on the brink: Millions of shoppers are unable to buy essential FOOD as one in three stock up for Christmas already while soldiers are set to be drafted in to drive HGVs over the festive period
- One in six British adults have been unable to buy essential food in last fortnight
- One in three people have already started stocking up on groceries for Christmas
- It comes amid fears of empty supermarket shelves ahead of the festive season
- Boris Johnson today former Tesco boss Sir Dave Lewis as supply chain crisis tsar
- Soldiers will also be drafted in to drive HGVs amid fears of ‘winter of discontent’
- Prime Minister was urged to help firms so rising costs don’t ‘strangle’ production
Millions of shoppers have been unable to buy essential foods and bosses have warned that factories could close in the next few weeks while soldiers are set to be drafted in to drive HGVs in the coming months amid fears of a ‘winter of discontent’.
Around one in six Britons have been unable to buy essential food items in the last fortnight, Office of National Statistics figures have suggested, amid fears of empty supermarket shelves as Christmas approaches.
HGV driver and supply shortages have led to panic buying over the last few weeks, with one in three shoppers already starting to stock up on their groceries for Christmas.
Hundreds of thousands of panicked shoppers have already booked in their delivery slots for the festive season while two thirds of shoppers were either worried or ‘very worried’ by potential shortages of food and drink ahead of the festive season.
Amid fears of a ‘winter of discontent’, senior Government figures have reportedly said that they are considering keeping soldiers on to drive HGV lorries across Christmas in a bid to prevent food shortages.
Elsewhere, Boris Johnson appointed former Tesco boss Sir Dave Lewis as his new supply chain crisis tsar with a remit to clear ‘blockages’ and ‘pre-empt potential future ones’ after dismissing concerns over labour shortages, Britain’s creaking supply chain and fears over rising inflation.
Around one in six Britons have been unable to buy essential food items in the last fortnight, figures have suggested, amid fears of empty supermarket shelves as Christmas approaches
Amid fears of food shortages in the coming months and panic buying leading to empty supermarket shelves, one in six adults have been unable to buy essential food items in the last fortnight.
Some 17 per cent of adults said they had not been able to purchase such goods because they were not available, according to the Office for National Statistics (ONS).
While almost a quarter of adults said the same for non-essential food items, the ONS found after analysing responses from 3,326 adults between September 22 and October 3 as part of its Opinions and Lifestyle survey.
It asked about people’s experiences of shortages over the past fortnight and overall, 57 per cent of people said everything they needed was still available to buy.
One in seven residents were unable to buy fuel as fears of petrol shortages and struggles with HGV driver recruitment led to drivers queuing for hours to get fuel and petrol stations being forced to close due to low supplies.
Six in 10 people said their food shopping experience had been different to usual, while 43 per cent said there was less variety, and 14 per cent had to go to more shops to get what they needed.
A fifth of Britons said items that they needed were not available but they could find a replacement, with a further fifth saying they could not find a replacement.
Thirteen per cent of adults also reported waiting longer for prescriptions and four per cent of people had to go to more pharmacies to find what they needed.
HGV driver and supply shortages have led to panic buying over the last few weeks, with one in three shoppers already starting to stock up on their groceries for Christmas
An industry leader has warned Boris Johnson (pictured) that factories across the country could stop production due to rising energy costs amid fears of a ‘winter of discontent’
Analysis of price rises in the last year shows the cost of a second-hand car has risen more than £1,600, a tank of fuel is up more than £10 and the price of a pint of beer is creeping close to £4
Exclusive research for the Daily Mail by the Centre for Economics and Business Research (CEBR) also yesterday revealed how inflation will cost the typical family of four an extra £1,800 by the end of this year. Meanwhile, a retired couple can expect to see living costs rise by more than £1,100, and a lower income couple could be stung by nearly £900
Amid fears that empty supermarket shelves will continue and worsen as Christmas approaches, hundreds of thousands of panicked shoppers have already booked in their delivery slots for the festive season.
A survey of 1,000 consumers by The Grocer revealed that two thirds of shoppers were either worried or ‘very worried’ by potential shortages of food and drink ahead of the festive season.
Supermarkets have been ramping up orders for turkey, the trimmings and other essentials to cope with an earlier than usual rush, according to the magazine.
Retailers have warned of empty shelves and delays to gifts due to gaps in the global supply chain and a lack of HGV drivers, amid concerns of a ‘winter of discontent’ hitting the UK.
Over the past month, one in ten businesses have put up prices due to rising inflation which is yet to peak, according to economists.
Mike Watkins, of analysts NielsenIQ, told The Grocer: ‘Shoppers tend to leave most of their Christmas grocery shopping later in November, but clearly this year we’re seeing late-November demand brought forward into October because of the concerns consumers have read and heard about, turkeys being a great example.’
School dinner choice is slashed and staff told to stockpile ‘long-life, dried and frozen food’ amid fears suppliers will struggle to keep children fed with shortages this winter
School dinner choices are being slashed and staff advised to stockpile essential food supplies amid fears suppliers will struggle to keep children properly fed this winter.
ISS, one of the UK’s largest canteen suppliers, has reportedly told 450 schools it is having issues with ‘sourcing, packing and distribution’, predicting that the problem will ‘get worse’ over the winter and will continue until February.
School canteens were advised by ISS in an email to stockpile ‘long life, dried, tinned and frozen’ products to make sure children can still be fed in a ‘worse case scenario’ this winter, according to ITV News.
Meanwhile, food wholesaler BidFood has warned that it is experiencing ‘significant’ supply pressures and struggling to recruit HGV drivers, blaming the issues on the Covid-19 pandemic and Brexit.
In Lancashire, thousands of pupils are being offered a reduced menu, The Times reported.
‘One school this week has not had a delivery of sandwiches. Another, no soup was sent. One school cook has even reported going out and purchasing additional items out of her own money as she was concerned about the choices on offer,’ Samara Barnes, a Labour councillor, told Lancashire Live.
‘This is a grave concern, especially given the fact that we know some children rely on their school dinner as their only meal of the day.’
Record numbers of panicked shoppers are already booking supermarket delivery slots for December amid the panic buying.
Waitrose saw 22,000 festive slots booked by lunchtime on the first day of releasing their dates last week, while 112,000 had been booked by the end of the week.
Ocado, which is releasing slots more slowly, has sent out a ‘sorry if you haven’t been able to a Christmas Slot in time’ reply on its FAQ page.
Tesco is not releasing slots to customers on its Delivery Saver scheme until November 15 and for others on the 23 – the same dates as last year.
Supermarkets are not the only place that are experiencing shortages, as footballer Marcus Rashford said some of the food banks he works with have been experiencing supply issues.
He told BBC Breakfast: ‘They’re struggling to do what they love doing because there’s a shortage of food and of course it’s something that we’re going to have to find an answer to, and quickly as well because you know people are out there and they need the meals and especially going into winter.’
Elsewhere, Boris Johnson today appointed former Tesco boss Sir Dave Lewis as his new supply chain crisis tsar with a remit to clear ‘current blockages’ and ‘pre-empt potential future ones’.
The 56-year-old is nicknamed ‘Drastic Dave’ due to the lengths he will go to to turn around businesses, including job cuts and slashing prices, and ‘Diamond Dave’ because of his success at Britain’s biggest supermarket and at Unilever before that.
Mr Johnson has insisted it is not his job to ‘fix every problem in business’ caused by Brexit and the pandemic and repeatedly dismissed concerns over labour shortages, Britain’s creaking supply chain and fears over rising inflation.
But today’s appointment, welcomed by business leaders, is a sign Downing Street has growing concerns about the crisis after weeks of product shortages, queues at petrol stations and the growing threat of Christmas staples such as turkeys, pigs in blankets and gammons being scarce.
Mr Johnson has a lot riding on the festive period, having promised last week that ‘Christmas will be considerably better than last Christmas’.
Aldi is hiring 1,500 temporary store staff to deal with the expected Christmas rush and Island, which has seen frozen turkey sales up 409 per cent compared to the same period last year, has upped its order from suppliers by 20 per cent.
Aldi recruitment director, Kelly Stokes, said: ‘We always need extra support over the busy Christmas period but this year especially, temporary store colleagues will play a vital role in keeping our shelves stocked as the nation prepares to reunite with their loved ones after missing out on festive celebrations in 2020.’
This afternoon France’s European Affairs Minister Clement Beaune even threatened to cut off supplies of turkeys and other goods unless continental fishermen are allowed to work in British waters.
It is the latest threat from across the Channel in a dispute over access to rich fishing grounds from next year, including the possibility of cutting electricity supplies to Channel Islands Jersey and Guernsey.
It came as fears were raised today of another toilet roll shortage as industry bosses warned spiralling costs will hit production – and baked beans became the latest food staple to face price increases.
Downing Street said former supermarket chief executive Sir Dave will advise the Prime Minister and Chancellor of the Duchy of Lancaster, and work with Government officials to quickly resolve acute, short-term issues.
Former Tesco chief executive Sir David Lewis has been appointed as the Government’s supply chain adviser
Hundreds of thousands of panicked shoppers have already booked in their delivery slots for the festive season. Pictured: Near empty pasta shelves in Sainsbury’s, Camberley, Surrey
Supermarkets are not the only place that are experiencing shortages, as footballer Marcus Rashford said some of the food banks he works with have been experiencing supply issues
Two thirds of shoppers were either worried or ‘very worried’ by potential shortages of food and drink ahead of the festive season. Pictured: Empty shelves at a supermarket in London
He will also co-chair a new supply chain advisory group and be based in the Cabinet Office.
A No10 spokesman said: ‘This includes both identifying the causes of current blockages and pre-empting potential future ones, and advising on resolutions either through direct government action or through industry with Government support.’
Mr Johnson said: ‘I’m pleased that Sir David Lewis is joining the team who have been working on future-proofing our supply chains across the United Kingdom as we recover from the pandemic. There are currently global supply issues which we are working with industry to mitigate and Dave brings a wealth of experience which will help us continue to protect our businesses and supply chains.’
Business leaders have welcomed the appointment and said they hope it is a sign that No 10 is willing to listen to their concerns.
Hannah Essex, Co-Executive Director of the British Chambers of Commerce, said: ‘We very much welcome the appointment of Sir David Lewis.
‘Hopefully Sir David, and the new groups he co-chairs, will be able to hit the ground running and urgently address some of the critical issues damaging business conditions.
The South East is STILL in the grip of fuel crisis: One third of petrol stations are dry or short on supply despite Grant Shapps’ claim UK levels are ‘close to normal range’
The South East is still in the grip of a fuel crisis – with a third of petrol stations dry or short on supply – despite Transport Secretary Grant Shapps today claiming supply levels are ‘close to normal range’.
The Petrol Retailers Association’s research showed that 12 per cent of filling stations have run out of fuel in the region, while 17 per cent have one grade of diesel or petrol.
Under 75 per cent of petrol stations have both diesel and petrol in London and south-east England, as opposed to 90 per cent outside those areas.
The figures are at loggerheads with Mr Shapps’ claims that the issue is almost entirely over.
He told GB News today: ‘In London and the South East, supply levels in petrol stations are getting very close to the normal range and we’ll see them opening up in a day or too.
‘There was never a shortage of fuel in the refineries and storage stations. As soon as people queue up to fill up fuel you get into a situation where you get a run on something like we saw with toilet rolls.
‘The amount of fuel in the petrol stations themselves is about double what it was at the low point.’
‘The increasing pressure that businesses, especially SMEs, are facing around supply chain costs and disruption, labour shortages, price rises, soaring energy bills and taxes is becoming dire.’
Rising energy, gas and food costs have also been sweeping the nation amid fears of a ‘winter of discontent’, with one industry leader warning the Government that factories across the country could stop production due to rising prices.
Andrew Large, director-general at the Confederation of Paper Industries, attended a meeting on Friday with the Business Secretary and other representatives of energy intensive industries to discuss the wholesale gas crisis.
Speaking to the BBC Radio 4’s PM programme afterwards, Mr Large claimed it was ‘very clear’ across all of the sectors that there are ‘serious’ risks factories could stop all activities as a result of the gas prices being too high.
His comments came after the boss of UK Steel, Gareth Stace, said earlier today that if Prime Minister Boris Johnson and the Government ‘does nothing to help’ firms, rising prices could ‘start to strangle’ production.
At his Conservative Party conference speech earlier this week, Mr Johnson promised that the UK would become a ‘higher-wage, higher-productivity economy’.
But Mr Stace claimed that if no action is taken, ‘we’ll actually be walking blindly towards a low wage economy’.
Amid the industry warnings, Ofgem warned there will also be a ‘significant rise’ to the cap on energy bills – hitting millions of Britain’s poorest people – with soaring energy prices set to push average annual bills through the £2,000 barrier for the first time.
As the gas crisis escalated, industry analysts suggested the current energy cap of £1,277 would rise by as much as £800.
Ofgem chief executive Jonathan Brearley, didn’t put a figure on it, but said there will be a ‘significant rise’ in the price cap set by the industry regulator which helps to control the cost of gas and electricity in the UK.
He didn’t knock back claims that fixed and other deals could reach £2,000 in 2022.
‘We can’t predict everything, and the wholesale market, as we’ve seen, has gone up and down extremely quickly so we can’t predict fully what that will be,’ he told BBC Radio 4’s Today programme. ‘But, looking at the costs that are in the system, we are expecting a significant rise in April.’
But Mr Brearley added that the current price cap will remain until April. ‘We have no plans to raise the price cap before April,’ he said.
In the face of the ongoing energy crisis, London-based money-saving expert Martin Lewis has urged customers to ‘do nothing’.
He said those who want cheaper energy deals shouldn’t shop around like normal – instead he insisted ‘inaction is now the best action’.
Speaking on his eponymous ITV show on Thursday, Martin said customers should pick deals that match their energy providers’ price cap – or wait until they are given one when their current deal ends.
The finance expert explained: ‘Do nothing, do nothing, energy prices are rising, energy firms are falling. The cheapest fixes are £500 a year higher than they were just a month ago.
‘Shocking. People are panicking. Do nothing. Inaction is now the best action,’ he added.
The energy crisis has been blamed, in part, on a shortage of natural gas caused by Vladimir Putin allegedly ‘choking’ supplies to Europe
Experts claimed Putin was using the crisis as leverage over the Nord Stream 2 pipeline project, which is run by Gazprom. Pictured: An output filtration facility of a gas treatment unit at the Slavyanskaya compressor station
The South East is still in the grip of a fuel crisis despite Transport Secretary Grant Shapps today claiming supply levels are ‘close to normal range’. Pictured: Queues for Esso in Ashford
Explaining the reasons behind the surging prices, he said: ‘The wholesale gas price is the price firms pay, and in the UK a lot of our electricity is heated by gas so it hits the electricity price too, it was normally about 50p/therm, you’ll see it has exploded in the last few months – it’s now well over five times the normal amount and that’s hideous.’
The energy crisis has been blamed, in part, on a shortage of natural gas caused by Vladimir Putin allegedly ‘choking’ supplies to Europe to pressurise regulators into approving the controversial Nord Stream 2 pipeline.
Today Boris Johnson waded into the row, branding the link a threat to energy security and suggesting the decision to bypass Ukraine to bring supplies direct to Germany would damage the Ukrainian economy.
A No 10 spokesman said: ‘Although Nord Stream 2 will not directly impact the UK’s energy security, it could have serious implications for central and eastern European countries.
Why is Putin’s £8.1bn Nord Stream 2 gas pipeline so controversial?
The Nord Stream 2 gas pipeline is set to double Russia’s natural gas shipments to Germany, Europe’s largest consumer of gas, bypassing Ukraine and depriving the EU member state of essential gas transit fees of $1.5 billion per year.
Russia is already the second-largest supplier of gas to the EU behind Norway, and the £.8.1billion will increase Europe’s energy dependence on Russia and Moscow’s geopolitical clout.
Donald Trump was opposed to the project and the EU has yet to sign off on it.
But over the summer officials in Washington and Berlin reportedly reached an agreement that would allow the Nord Stream 2 pipeline – which was roughly within 62 miles of completion as of June – to finish construction.
U.S. officials under Presidents Obama and Trump opposed the pipeline, arguing it would strengthen Moscow’s influence across Europe.
Nord Stream already includes one pipeline running from Russia to Germany. Both are owned by a company whose majority shareholder is Russian state gas company Gazprom.
‘Some European countries are nearly wholly dependent on Russian gas, which raises serious concerns about energy security.’
In comments reported by The Times, the spokesman also warned about the damage to Ukraine, which currently hosts the largest pipeline network for Russian gas and benefits from large transit fees. He added: ‘Nord Stream 2 would divert supplies away from Ukraine, with significant consequences for its economy.’
The natural gas price is currently hovering at around £2.40 a therm – down from more than £4 yesterday – after traders were reassured by Putin hinting that Russia would consider increasing exports.
Mr Large said today: ‘When we talked with the Secretary of State this afternoon, it was very, very clear across all of the sectors that there are serious risks of effectively factory stoppages as a result of the costs of gas being too high to bear, and in those circumstances, there will be a gradual knock on effect through supply chains, right the way across manufacturing, consumer retail and other products. And so the risks are very, very real.’
When asked what this would mean for the paper industry, Mr Large said it would be incredibly damaging for profitability.
He said: ‘So, our paper mill will be wanting to operate 24/7, 365 days a year, with the exception of planned stoppages for maintenance and so on. So the financial sustainability of that paper mill is dependent upon being able to maximise its uptime.
‘Every minute that the machinery isn’t working, every minute that paper isn’t being produced is a damage to the profitability of the sector and a damage to the future investment potential and opportunities going forward.’
However, Mr Large did say that the meeting was a ‘positive, first step’ to look at the solutions they had proposed and that Kwasi Kwarteng ‘clearly furthers our desire to avoid any potential supply chain disruption’.
The Energy Intensive Users Group (EIUG) echoed Mr Large’s comments, saying in a statement it had welcomed the opportunity to meet the Business Secretary and is pleased he wants to find practical solutions to the challenges members face going into this winter.
EIUG chair Dr Richard Leese said: ‘Our message to the Secretary of State was for prompt and preventative measures to help avoid recent production curtailments in the fertiliser and steel sectors being replicated in other areas this winter.
‘EIUG will work with Government to avoid threats both to the production of essential domestic and industrial products, as well an enormous range of supply chains critical to our economy and levelling up the country.’
The EIUG’s membership comprises trade associations and customer groups representing industrial sectors with the heaviest energy consumption in the UK.
These are UK Steel, the Chemical Industries Association, the Confederation of Paper Industries, the Mineral Products Association, the British Glass Manufacturers Federation, the British Ceramic Confederation, BOC, Air Products and the Major Energy Users Council.
Mr Kwarteng said consumers will be better insulated from erratic gas prices as wind and solar power start providing more energy to the UK’s households.
He insisted that by decarbonising the UK’s power supply, the Government would ensure that households are less vulnerable to swings in fossil fuel markets.
He told a conference organised by trade body Energy UK: ‘The UK so far, as many of you know, has made great progress in diversifying our energy mix. But we are still very dependent, perhaps too dependent, on fossil fuels and their volatile prices.’
The Petrol Retailers Association’s research showed that 12 per cent of filling stations have run out of fuel in the region, while 17 per cent have one grade of diesel or petrol
Under 75 per cent of petrol stations have both diesel and petrol in London (pictured) and south-east England, as opposed to 90 per cent outside those areas
It comes as Transport Secretary Grant Shapps told Sky News ‘we’re right at the tail end’ of the situation with fuel supply pressures
UK Steel boss Mr Stace told BBC Radio 4’s World At One today: ‘The prime minister this week is calling for a high wage economy.
‘The steel sector already does exactly that – we pay our workers 45 per cent higher wages in regions where steel is, they’re highly skilled as well.
‘If you’re paying as much for gas and electricity as we are as a steel sector, then these unprecedented price rises are hurting us now today.
‘If the prime minister and government does nothing to help us, they could start to strangle steel production here in the UK and rather than working towards a high wage economy, we’ll actually be walking blindly towards a low wage economy.’
He added: ‘At the moment, there’s an energy crisis. If government does nothing, tomorrow there’ll be a steel crisis
‘In terms of what impact that could have on jobs, that wouldn’t be good not only for the steel sector and for those regions where there is steel but for the UK economy as a whole.’
It comes as Transport Secretary Grant Shapps told Sky News ‘we’re right at the tail end’ of the situation with fuel supply pressures.
He said in ‘most parts of the country’ problems have ended, and that London and the South East are the only two areas ‘where we’re seeing any continued problems’.
Will the lights stay on this winter? National Grid warns of a greater risk of blackouts and says electricity supplies will be ‘tight’ this year after undersea cable fire
A map showing the various electricity cables that bring in electricity to the UK from the rest of Europe. The IFA link is seen bottom right in green
Britain faces ‘tight’ electricity supplies this winter after a fire disrupted a vital cable bringing energy from France – loading fresh pressure onto a system that is already being stretched to the limit by high demand and limited supply.
The National Grid said the incident at a connector station in Kent last month had cut the amount of energy that can be imported via the 1FA undersea cable – which runs under the English Channel to Calais – by half.
By October 23, 1GW of power should be restored following repairs, but the full capacity of 2GW will not be reached until more work due to last until March next year.
European wholesale gas and power prices have rocketed this year due to lower-than-usual gas stocks this summer, reduced supply from Russia, the onset of colder temperatures and infrastructure outages.
High UK wholesale gas prices have helped to lift wholesale power prices as gas plants account for around 40% of electricity generation in Britain.
He added that around 3,500 people have applied for provisional HGV licences in the past week.
The Government is also prepared to ask the military to drive HGV lorries until Christmas, after they have already stepped in to help due to recruitment issues heightened by Brexit and the Covid pandemic.
Senior Government sources told The Telegraph that they are willing to ask for an extension of the Military Assistance to Civilian Authorities (MACA) order in a bid to prevent shortages of food and other essential items this Christmas.
The original MACA order is understood to last 30 days, but a Government source told the publication that it could be extended if problems persist past the beginning of November, when the order will run out.
Andrew Large, director-general at the Confederation of Paper Industries, said its members are being ‘affected very, very severely’ by cost increases, with toilet roll and packaging among the items that could be hit hardest.
He said: ‘They’re seeing their costs go up through the roof. It’s damaging their profitability and in some cases it’s causing them to manage their production rates so as not to expose themselves to the very, very highest costs.’
Meanwhile, baked beans have become the latest victims of soaring inflation – with the head of manufacturer Kraft Heinz today revealing the cost of the breakfast staple will have to go up.
Miguel Patricio, CEO of Kraft Heinz, which makes a range of other products including Philadelphia spread and Capri Sun, said that inflation was widespread globally and costs were rising.
‘In previous years there was inflation in coffee because of a bad crop or a bad crop in beans – what is different now is that this inflation is across the board,’ he told BBC Radio 4’s Today programme.
‘So it’s impossible to navigate through this moment of inflation without increasing prices. It’s up to us, and to the industry and to other companies to try to minimise these price increases.’
One in ten British businesses put up their prices in the past month due to the rising costs, the Office for National Statistics’ (ONS) latest business survey for September shows.
Meanwhile, nearly a third of companies have seen a higher-than-normal increase in running costs and many have been forced to pass this on to customers.
Companies in construction, services and manufacturing were the worst hit as 10 per cent said they needed to raise prices last month, up from 8% per cent in mid-August and 4 per cent early in 2021.
The data showed that, of these, nearly a quarter, 23 per cent, were retailers in consumer-facing sectors, and 25 per cent were in the manufacturing industry.
The stark data came as the soaring cost of electricity and gas hit industries such as steel, glass and chemicals, meaning consumers will soon be paying more for a huge number of products including cars, building materials, food packaging and even toilet roll.
Factories have moved to reduce their output to save on costs as the price of energy went through the roof with some demanding Government support to keep running.
It came as the Bank of England’s new chief economist, Huw Pill, used his first interview in the in the job to warn that Britain faces a ‘greater than expected’ rise in inflation over the coming months, which with further hammer households and businesses.
Mr Pill said he expects increasing costs of living ‘should subside as the pandemic recedes’, but with inflation already at a nine-year high of 3.2 per cent, he gave the chilling warning: ‘The magnitude and duration of the transient inflation spike is proving greater than expected.’
Britons and their businesses are being battered by a ‘perfect storm’ of inflation and supply chain problems with experts predicted inflation could still reach 5% by Christmas.
We’re at the mercy of Vlad the Blackmailer — and it’s all our fault, writes EDWARD LUCAS
By Edward Lucas for the Daily Mail
The Berlin Wall may have come down more than three decades ago, but the grim politics of the Cold War are in danger of returning to Europe.
With characteristic ruthlessness, Russian president Vladimir Putin is exploiting the energy crisis to bully his neighbours, strengthen his autocracy and intimidate the West.
His chosen weapon in this renewed campaign of hostility is Russia’s control of gas supplies: the vast gasfields and the export pipelines that bring them to market.
This infrastructure, often legacy assets from the Soviet empire, give the Russian president enormous leverage in his quest for ever-greater domination of the region.
Russia’s capacity to manipulate the British and European energy markets for geo-political ends has been dramatically illustrated during the turmoil of recent days.
As the price of gas contracts soared on Wednesday by 40 per cent in just 24 hours, Gazprom, Russia’s state-backed monopoly exporter of pipeline gas, was accused of flexing its muscles by both restricting supplies to Europe and keeping its European underground storage facilities at deliberately low levels.
With characteristic ruthlessness, Russian president Vladimir Putin is exploiting the energy crisis to bully his neighbours, strengthen his autocracy and intimidate the West
The sense of Russian control was further reinforced when it took just a few words from Putin himself to bring an immediate fall in gas prices.
Revelling in his position as the ultimate wire-puller, he said with a hint of blackmail that supplies could be increased.
‘This speculative craze doesn’t do us any good,’ he said, adding that Europe’s leaders should ‘settle with Gazprom and talk it over’.
Putin might be behaving like a mafia boss in charge of a protection racket, but British and European governments have for years disastrously played into his hands with misguided, short-term policy decisions.
To be fair, the EU has taken some steps to break the Russian stranglehold, by building new international pipelines, breaking the Kremlin’s east-west transit monopoly, and by drastic reforms of the energy market that have unbundled the corrupt, exploitative business model.
Europe has also pioneered the import of liquefied natural gas (LNG) from destinations such as Qatar.
Yet Europe has been increasing its reliance on supplies from outside the continent by running down its own domestic energy industries. So far, renewables have not made up the gap, especially in recent months when the wind has not been blowing.
In Britain, the problem is particularly acute because we are one of Europe’s largest gas users, while we have massively reduced gas production from the rich fields of the North Sea and Irish Sea over the past 20 years.
Nor have we made use of the vast reserves of shale gas that exist across the country, even though such resources have recently made America ‘energy-independent’ once more.
Instead, Britain has exacerbated its energy vulnerability by depending on just-in-time imports from pipelines and seaborne cargoes.
In a particular act of folly, the Tory Government in 2017 decided to close the huge storage facility on the Yorkshire coast connected to the Rough gas field, believing both that supplies of LNG would always be plentiful and also because the energy companies believed that limiting storage would boost prices and thereby profits.
Four years later, the step has backfired catastrophically, leaving us at the mercy of Putin.
Indeed, our entire energy strategy has been marked by stinginess, wishful thinking and complacency.
By manipulating energy markets, Putin’s immediate objective could not be more clear: he wants to pressurise Europe into approving immediately the operation of Gazprom’s controversial £8.1 billion Nord Stream 2 pipeline.
His chosen weapon in this renewed campaign of hostility is Russia’s control of gas supplies: the vast gasfields and the export pipelines that bring them to market. Pictured: Tugboats get into position on the Russian pipe-laying vessel Fortuna in the port of Wismar, Germany
Putin’s objective could not be more clear: he wants to pressurise Europe into approving the operation of Gazprom’s Nord Stream 2 pipeline. Pictured: A specialist works onboard the Allseas’ ship Solitaire to prepare a pipe for Nord Stream 2 pipeline in the Baltic Sea
Now completed, this runs into Germany along the seabed of the Baltic Sea and bypasses Ukraine, in whose eastern regions Russia has been fighting a proxy war since 2014.
Critics say Nord Stream 2 will give too much influence to Russia over regional energy supplies and their prices.
But crucially, the project is backed by Germany, which puts cheap reliable supplies of Russian gas ahead of the security interests of its east European neighbours.
US President Joe Biden’s administration, desperate to repair the damage done to relations with Europe under Donald Trump, has dropped American objections to the scheme.
The result is that Russia can now hold Ukraine and other Eastern European states to ransom. The Kremlin could shut down their gas without having to cut off the rest of Europe.
In effect, one group of nations will be played off against the other in a fearful system of divide and rule, with Russia in command.
As Yuriy Vitrenko, the chief executive of Ukrainian energy giant Naftogaz, put it this week: ‘Moscow is withholding gas supplies in order to coerce Europe into accepting Nord Stream 2.
‘Russia’s actions are the epitome of gas weaponisation. Anyone who refuses to acknowledge what Moscow is doing, especially when it does this so blatantly, is sending a dangerous message to the Russians that they can use gas to blackmail Europe and get away with it.’
Given all this, it is almost inevitable that Ukraine will soon be plunged into another security crisis, perhaps even greater than the one that led to the annexation of Crimea in 2014.
The fallout would be disastrous, especially in view of the fragility of Europe’s post-Covid economies.
The implications of Russia’s energy strength are brutal, leaving us relentlessly on the defensive.
If, for example, Russia invaded Estonia, would Nato respond if Putin threatened to cut off Europe’s gas? The only way to break free from the shackles of energy dependency is to develop our own resources and means of storage.
In the 1970s, Western reliance on Middle Eastern oil created an era of regional conflict and economic crisis.
It would be a tragedy if today, the same were to happen because of our reliance on Russian gas.
Soaring energy bills, paying more at the pump, NO food and empty shelves – how millions are being clobbered by rising cost of living that will leave them THOUSANDS out of pocket
Millions face a looming winter energy crisis and a warning that gas and electricity bills could surge by an extra £500 a year.
A shock 60per cent surge in wholesale gas prices at the beginning of this week – on top of earlier increases of 600% since January.
National Grid has also warned of tight electricity supplies as the amount of energy from renewable sources such as wind, dropped.
The current UK energy price cap, set by industry regulator Ofgem, is £1,277 – but analysts Cornwall Insight predict it will rise to £1,660 when it is reviewed on April 1. Today the cheapest fixed gas and electricity deal available in the UK is £1,700 – a month ago it was £1,177. Experts believe households will pay £500 to £800 more for energy in 2022.
The cost of energy is also hitting industry, who say they will have to pass it on to customers with it likely to hit products like cars, building materials, chemicals and even toilet rolls.
Petrol prices have soared to an eight-year high last month as filling stations cashed in on the fuel crisis.
Average pump prices hit 136.8p a litre for unleaded – 22p more expensive than in September 2020. It meant the cost of filling the typical 55-litre tank in a family car was £12 dearer than a year ago, said the RAC.
Separately, an AA study found some forecourts are currently charging up to 163.5p a litre for unleaded – 27p above the average. This would add a further £15 to the cost of filling up.
Growth in British house prices gathered speed in September when they rose by 1.7% from August, mortgage lender Halifax said on Thursday.
In annual terms, house price growth also accelerated to 7.4% from 7.2% in August. The average price of a detached home has surged by £41,000 over the past year as buyers have searched for more space, the research found.
Council tax may need to rise by up to 5 per cent a year for the next three years to keep services running and pay for social care reforms.
That would add £299 on to the average council tax bill for a Band D household.
The Institute for Fiscal Studies said that under current government spending plans, a rise of at least 3.6 per cent on council tax bills will be needed per year just for town halls to keep services running at the levels seen before the coronavirus pandemic.
Such a rise would come on top of the 1.25 per cent increase in National Insurance announced last month.
Supermarket food shop
The average household spent £277 a month on food expenses, but the latest inflation reading suggests this could increase to £285 a month this year.
Analysis by MailOnline of prices today compared to those in March 2020 found many staple goods have gone up in cost include mushrooms, spring onions, cabbage, salmon, soup, kiwi fruit, apples and mineral water.
Among the biggest price rises are eggs, sausages, fizzy drinks, fruit and bottled water;
Price of a pint
The average price of a pint in the pub across the country could soon pass £4, the ONS has said. In London the price is already through that barrier.
And the other factors driving price rises….
Prices are rising at the fastest pace in at least a quarter of a century as businesses pass on the costs of labour, materials, shipping and energy to consumers.
Firms in the services sector, which range from transport companies and hairdressers to pubs and restaurants, hiked their prices in September at the fastest rate since data began in 1996, according to the Purchasing Manufacturers’ Index (PMI) from IHS Markit.
Manufacturers are also putting up prices as inflation once again stalks the global economy.
Inflation hit 3.2pc in August and is widely expected to surge past 4pc by the end of the year in a headache for Chancellor Rishi Sunak.
Britain is struggling to deliver good and move items die to a shortage of drivers. Large numbers have retired and some have returned to the EU because of covid and Brexit.
The Government has set out an action plan over the weekend to address lorry driver shortages, currently running at 100,000 in the UK and 400,000 on mainland Europe.
It will see 5,000 temporary visas made available to foreign HGV drivers, while a £10million skills plan will help train 4,000 more truckers.
This week sources claimed only 27 drivers had applied for a new visa – but Boris Johnsons insisted it was 127. At the same time, tens of thousands of Britons were unable to take HGV driving lessons and tests during the lockdowns, which means the UK has missed out on a generation of skilled recruits.
Cost of materials
Wholesale gas prices have soared to record highs across Europe while the price of oil has almost doubled in the past year to close to $83 a barrel – the most expensive since 2018.
Copper has jumped by more than a third over the past year which, when combined with the shortage of semiconductors, will bump up the prices of electrical products. And cotton has also spiked above $1 a pound for the first time in more than a decade, rising more than 42pc over the past year, which could mean more expensive clothes.
Even arabica coffee has jumped almost 73pc over the past year to levels not seen since 2014, meaning Britons could soon be feeling the pinch when visiting their local cafe.
Disrupted global supply chain
The cost of bringing in container loads of supplies, including festive products, from China has soared this year. There has also been a major issue with containers being stuck in Europe rather than in Asia as shipping was disrupted by covid. It means that UK companies are struggling to get products made and shipped easily with long waiting times.
Farms are pouring milk down the drain at the same time as McDonald’s and supermarkets cannot get supplies due to the lorry driver shortage.
There are not enough tanker drivers to collect milk from farms, while the dairies have too few delivery drivers to transport supplies to high streets.
At the same time, farmers are complaining that a chronic lack of workers to pick and pack crops means fresh produce is being left to rot in the fields.
Supermarkets are having to concentrate on moving fresh products rather than many dry goods because of a lack of trucks.
Pig farmers have started culling livestock amid warnings from food firms the drastic measures will hit key ingredients.
Meat industry leaders say a lack of skilled butchers means abattoirs are refusing to accept pigs for slaughter, leading to fewer pork products and reduced choice.
This is expected to hit supplies of gammons and pigs in blankets in the run-up to Christmas.
The National Pig Association (NPA) and National Farmers’ Union (NFU) are warning that tens of thousands of pigs – possibly 120,000 – may have to be culled on farms and incinerated.
Businesses have complained about difficulties recruiting staff from HGV drivers to baristas and warehouse workers.
But latest figures show unemployment stood at 1.55million at the end of July.
That was before the end of the furlough scheme this month which analysts believed could have put as many as 250,000 on the dole queue.
Critics say bosses have come to rely on uncontrolled migration from Europe providing a stream of cheap labour and should instead raise wages to fill staff shortages.
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