The implementation of a relatively hard Brexit signalled the end of freedom of movement between the UK and the EU. This hurt many of the industries that had come to rely on EU workers. The logistics industry was hit particularly hard. Brexit increased its workload while reducing its workforce. The impact of this is still being felt.
EU workers and the law
EU citizens who lived in the UK prior to Brexit were given the option to stay here. Those who had lived in the UK for at least five years were offered settled status. Those who had lived here for shorter periods were offered pre-settled status. This can be converted to settled status after five years of residence.
EU citizens who did not live in the UK prior to Brexit are now treated in the same way as all other international workers. At present, therefore, it is virtually impossible for the logistics sector to recruit them. This is because HGV driving is, currently, not included on the Shortage Occupation List (SOL).
It is possible that this situation may change. Back in August 2022, then Minister for Safe and Legal Migration, Kevin Foster MP requested the Migration Advisory Committee (MAC) to review the SOL. The MAC was asked to report back by the end of March 2023.
Assuming the MAC can meet this timescale, HGV driving could be entered into the SOL by autumn 2023. This could be extremely helpful for making sure that Christmas plans go to plan, especially for beleaguered businesses. It could therefore help to boost the government's tax receipts in the new year.
How likely is it that HGV driving will be added to the Shortage Occupation List?
Right now, it's very hard to say whether or not the government will agree to add HGV driving to the SOL. Ultimately, it comes down to political goals versus economic pragmatism. Furthermore, the government is sure to take its decision with at least one eye on the next election. This must happen by the 24th of January 2025.
On the one hand, the government would indisputably like to see HGV driving roles in UK companies being taken by UK nationals. Firstly, this is in line with the stated goals of Brexit. Secondly, it's standard policy across the world. Thirdly, it would prove the success of the measures it has taken to increase the number of UK nationals becoming HGV drivers.
On the other hand, the government has to think about the practicalities of the current economic situation. Its push to increase the number of people training to be HGV drivers does appear to be working. Unfortunately, it does not appear to be working quickly enough to deal with the pressure the logistics industry is under right now.
The government may try to square this circle by bringing in temporary measures. It extended the road haulage cabotage scheme for six months. It also introduced a temporary visa scheme for EU HGV drivers. Both of these schemes provided temporary relief for the logistics sector. Neither provided a long-term solution.
Will EU nationals be tempted back to the UK?
Even if the government does add HGV driving to the Shortage Occupation List, there is another potential problem for the HGV sector. What's more, it's potentially a huge one. There is a distinct possibility that EU nationals may not want to come back to the UK.
HGV drivers are in demand across the world, including in Europe. The UK is just one of the countries competing for their labour. EU-based HGV drivers who want to work around their home area can usually do so. Those who want to look further afield can take their pick from EU member states. They can also opt to go to non-EU countries.
In simple terms, therefore, if the UK wants to recruit HGV drivers from the EU, it's going to have to give them a reason to come (back) here. The most obvious reason is better pay and/or conditions. If, however, it improved pay and/or conditions for EU workers, then it would also have to improve them for UK workers. This could have serious implications.
If costs increase for the logistics sector, they will need to be passed on to its clients. The clients will then need either to absorb them or pass them on to their customers. Firstly, this will create more pain for people who are still getting back on their feet after COVID19. Secondly, it could stoke the flames of inflation (even more).
Could retired British drivers be tempted back into the industry?
Another option might be to tempt back retired British drivers. Again, this would require the logistics sector to offer them the right pay and conditions. The bar might, however, be lower as British drivers would not need to move internationally.
As with employing EU workers, this would really be a stopgap rather than a solution. It could, however, give the logistics sector breathing space to implement a longer-term plan.
How can the logistics industry secure its labour supply into the future?
Brexit has highlighted the dangers of any country becoming overly reliant on labour from another country. This means that securing the logistics sector's labour supply into the future is likely to require two key steps. Firstly, it has to recruit (and retain) more HGV drivers from the UK. Secondly, it needs to lighten their workload through technology and automation.
After many years, the UK government appears to have grasped that it needs to step up and help the logistics sector with its recruitment issues. Its most important contribution has arguably been providing funding for training. It has also worked to make it easier for candidates to find training and testing centres.
The government absolutely needs to continue with this. At the same time, the logistics sector needs to keep reaching out into underrepresented demographics. In particular, it needs to reach out to women. Women make up about 50% of the population but only a small percentage of HGV drivers.
Furthermore, the logistics sector needs to work on improving the attractiveness of HGV driving as a trade. It may be helped by the government's aim to make the UK's roads smarter. For example, the rollout of Automated Lane Keeping Systems (ALKS) could be a significant benefit to HGV drivers.