Shelves empty, pumps dry and bills soar, but No10 says ‘shop as usual’

23 September 2021, 18:32 | Updated: 23 September 2021, 23:23

There are fears of a number of supply chain issues this winter.
There are fears of a number of supply chain issues this winter. Picture: Alamy

By Sophie Barnett

Ministers are preparing for a "worst-case scenario" of gas costs remaining high for some time in the run-up to winter, while supermarkets are warning of possible food shortages.

Number 10 has acknowledged "issues facing many industries across the UK" as winter approaches but a spokesman for the Prime Minister said: "People should continue to shop for fuel as usual."

The Prime Minister's Official Spokesman insisted today there is no shortage of fuel at pumps across the country, and urged people to continue to fill up their vehicles 'as normal'. 

But a "perfect storm" of the CO2 crisis, HGV driver shortage and "other issues" have led to the boss of Iceland warning of a surge in food prices ahead of Christmas.

BP meanwhile has said it will restrict deliveries of fuel because of a lack of HGV drivers, and there have been reports of Tesco petrol stations running out of fuel in some parts of the country.

Andrew Woolfenden of Tesco said: "Our concern is that the pictures of empty shelves will get ten times worse by Christmas and then we'll get panic buying."

Boris Johnson said: "There is no shortage of fuel in the UK and people should continue to buy fuel as normal.

"The spokesperson said the Government "recognised the challenges" and is taking "steps to support" it, such as speeding up the process for getting HGV licences.

A spokesperson for trade body Logistics UK agreed, saying: "We urge people not to panic buy."

They said the industry was "resilient" and said it "will continue to serve the needs of the nation".

Business minister Paul Scully explained they were preparing for a "worst case scenario" due to gas prices, saying there was "pressure" on the energy price cap due to high global wholesale gas costs.

Asked what the worst-case scenario was for a cap rise, Mr Scully said: "This is all part of the conversations that Ofgem will set that cap at, because supply prices are based on a number of factors.

"Clearly, as Government, we need to make sure we are planning for the worst-case scenario because we want to make sure we can protect consumers."

In recent weeks a number of big brands have reported increasing supply chain issues, and industry experts have warned of continued disruption in the run up to Christmas with empty supermarket shelves now a regular occurrence.

It comes as more than a million people are facing higher bills this winter as spiking gas prices have forced more energy firms to go bust, amid fears of a tough few months ahead.

The rise in prices has been attributed to a cold winter which depleted stocks, high demand for liquefied natural gas in Asia and reduced supplies from Russia.

Energy firms Avro and Green - which have over 830,000 customers between them - are the latest companies to cease trading amid the soaring gas prices.

Read more: Over a million homes face higher bills as gas prices force more energy firms to go bust

Read more: Gas prices: What happens if my energy supplier goes bust?

Business Secretary Kwasi Kwarteng has said people living in the North will be hit hardest by the soaring energy prices.

A former head of Ofgem added that Britain is likely to face high energy prices for the rest of the year.

Finance expert Martin Lewis warned LBC listeners on Tuesday that another gas price rise was expected in the first half of next year - something he called "unprecedented" and "outrageous".

There are concerns the combination of these soaring gas prices and a shortage of carbon dioxide could see parts of the UK's food manufacturing process grinding to a halt.

High global demand, maintenance issues and lower solar and wind energy output are being blamed on the increased cost of wholesale gas, which in turn has forced much of the UK's commercial production of CO2 to stop.

Read more: Scramble to avoid food shortages: Government in crisis talks as gas prices soar

Nick Allen, chief executive of the British Meat Processing Association, said: “This could be the straw that broke the camel’s back. It is potentially a massive challenge for the food industry when we are already facing huge issues."

"We urgently need the secretary of state for business to convene the big CO2 manufacturers to demand that they coordinate to minimise disruption, and provide information to Britain’s businesses so contingency plans can be made," he added.

The shortage of CO2 is crucial for the production and transport of products including meat to bread, beer and fizzy drinks - all of which could affect Christmas.

There have also been fears that a shortage of lorry drivers in the UK could impact the festive season.

Read more: IKEA hit by supply chain issues caused by Brexit and lorry driver shortages

There is currently a shortage of around 100,000 HGV drivers in the UK, according to the Road Haulage Association.

Tesco has warned the crisis could lead to a rise in panic-buying in the run-up to Christmas, which it said could be "far worse" than during the national lockdown when shelves were stripped bare of essentials.

Andrew Woolfenden, Tesco's UK distribution and fulfilment director, called on the Government to temporarily make it easier to bring in workers from abroad to ease the issue.

"Our concern is that the pictures of empty shelves will get ten times worse by Christmas and then we'll get panic-buying," he explained.

He said Tesco has only managed to attract as many drivers as it has lost to rival businesses over the summer despite offering £1,000 recruitment bonuses since July.

Other companies who have been affected by supply shortages include M&S, Amazon, McDonald's, and Wetherspoons.

Read more: Wetherspoons, IKEA and 100,000 pigs: Who has been affected by Brexit supply chain issues?

Iceland boss Richard Walker says that while he has concerns about supplies over the bumper Christmas season, there is no need for consumers to stockpile as it would damage the grocery sector's supply chains.

And now new research has shown that 1.5 million working people could struggle even further if the extra £20 a week in Universal Credit is withdrawn.

Citizens Advice has warned about 600,000 claimants fear not being able to afford food or basic necessities like toiletries.

The organisation added that many people it speaks to would struggle to find extra work for more pay.

About two-thirds of working claimants are bracing themselves for difficulties, the organisation said, as they fear they will struggle to pay bills, get into debt or be forced to sell their possessions.