Time running out to save UK industry from worker shortages, say business leaders

London(CNN Business) Worker shortages have left UK service stations empty, created gaps on supermarket shelves and are forcing farms to cull pigs. Even the finance industry is starting to suffer. The situation could get much worse this winter if the British government doesn't relax its Brexit immigration rules, business leaders say.

Farmers, bankers, retailers, transporters and restaurateurs have warned in recent weeks that tighter immigration rules put in place after Britain left the European Union are making it hard for them to find workers and keep their businesses running.

Supermarkets are struggling to keep some specific foods stocked, while McDonald's (MCD) temporarily stopped serving milkshakes and Nando's ran out of its signature peri peri chicken. Meat processors can't keep up with demand, and farmers are warning that there won't be enough turkeys at Christmas. Abattoirs can't cope with the number of pigs being reared.

Banks are the latest to sound the alarm. TheCityUK, which represents the United Kingdom's huge financial services industry, said Thursday that its members were seeing "significant cost increases to securing the high-skilled talent that they need to compete on the global stage."

"To stay competitive, we must have the best global talent. Without it, we will not be able to innovate in key growth areas like FinTech or green finance, nor build out our international trading networks," CEO Miles Celic said in a statement. "The UK must strive harder to modernize its immigration processes," he added.

The financial sector is asking the government to make it easier for workers to come to the United Kingdom for short stints. It also wants the government to negotiate with other countries to allow workers to easily cross borders for roles with their current employer.

The scale of the challenge facing UK employers has been highlighted over the past week, when a shortage of tanker drivers forced some service stations to close. British motorists resorted to panic buying, causing widespread gasoline shortages that persisted for days.

The government responded with emergency measures that included temporary 5,000 visas for foreign truck drivers. Britain faces a much bigger shortfall of 100,000 drivers, according to industry groups, but Prime Minister Boris Johnson signaled that his government is unlikely to authorize more.

"What we want to see is an emphasis on high wage, high skill — a high productivity approach to our economy. What I don't think that people in this country want to do is fix all our problems with uncontrolled immigration," said Johnson.

Driver shortages are affecting a range of industries, including retail. Andrew Opie, director of food and sustainability at the British Retail Consortium, said that "drivers are the glue which hold our supply chains together," and warned of continued disruption this winter.

"Christmas is about more than just food, so to avoid disappointment for millions of households during the festive season we urge the government to rapidly extend this program, both in size and scope, to [truck] drivers in all sectors of the retail industry," he said in a statement.

Life after Brexit

It was relatively easy for UK companies to recruit European workers when the country was a member of the European Union, which allows free movement of people within the bloc. Following Brexit, Britain shifted to an immigration system that prioritizes workers deemed "high-skilled" by the government.

Industries are now openly lobbying the government in hopes of getting on the skilled workers lists.

The hospitality industry, which has been rocked by coronavirus lockdowns, social distancing rules and high levels of uncertainty, now faces the prospect of a diminished workforce during the crucial holiday season.

On Tuesday, 65 industry members, including Nick Jones, founder of Soho House, and Stuart Gillies, a former chief executive of Gordon Ramsay restaurant group, wrote an open letter to the government saying more hospitality jobs must be considered skilled "in order to save the industry under Brexit rules."

"Hospitality is not a low-skilled career. There are many roles both in the kitchen and on the floor which require a high level of training and extensive experience — eg, sashimi chef, sommelier, floor manager," the group wrote in the open letter, which was published in the Financial Times.

Many companies are offering bonuses in hopes of recruiting UK workers, but they face a tight labor market. There were a record 1 million job vacancies between June and August, according to the Office for National Statistics. Pub chain Wetherspoon said Friday that while it has "received a reasonable number of applications for vacancies," it has struggled to find staff in some areas of the the United Kingdom including the West Country.

Supply chains are meanwhile being pushed to the limit.

National chicken production has already been cut back by 10% because of staff shortages, the British Poultry Council warned in August. Christmas turkey production will be slashed by a fifth, the industry group estimates.

The UK government announced earlier this week that it would issue up to 5,500 temporary visas for poultry workers. But the intervention may come too late to prevent product shortages this fall and winter.

"Supply chains are not something that can be simply switched on and off, so plans for production are already well underway and the necessary cut backs due to ongoing labor shortages have already been made," Richard Griffiths, chief executive of the British Poultry Council, said in a statement on Wednesday.

Pig farmers are in trouble too, as a shortage of butchers and drivers prevents meat getting from farms to consumers. With a backlog of more than 100,000 animals, they now face the prospect of mass animal culling.

"We are within a couple of weeks of actually having to consider a mass cull of animals in this country," National Pig Association Chairman Rob Mutimer told BBC Radio on Friday.

One pig farmer who also spoke to the BBC said things were getting "pretty desperate" and it was increasingly likely she'll be forced to destroy the 1,600 pigs her farms produce weekly until more workers can be found.

"This started 11 weeks ago, and the reason we were given was that the processing plant that our animals go to was short of labor and that they didn't have the people to actually butcher and deal with the meat in the supply chain. And that's been a constant message for 11 weeks," she said.

"It's actually getting worse. We're being told that for next week, we're being cut again, and the cut's getting deeper."