Nobody’s fuel: Britain’s shortages

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Hello and welcome to the Intelligence from the Economist. I'm your host, Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. Tunisia's ten year old democracy has seemed threatened since July, when its president assumed almost dictatorial powers. We ask what to make of the fact that yesterday he made a surprise appointment the country's first female Prime Minister. And spare a thought for India's unmarried couples. Widespread conservative notions mean they get far more than just stares. Sometimes police even round them up. We take a look at how a certain entrepreneurial spirit might reflect changing values. But first, in Britain, things are running out. Milkshakes from McDonald's, chicken from a chain called Nando's, which kind of only sells chicken. And this week, petrol.

I work 30 odd miles away from here, I've got 40 miles left in the tank.

I'm not going to have enough fuel.

To actually get home.

Britons have wasted untold hours queuing up at the station.

People are going a bit nuts because 6am in the morning, people are queuing.

Up petrol and it's like people are going crazy, man. I swear.

Just typical, isn't it?

This always happens. If it's not toilet rolls, now it's petrol. This is a circus.

Prime Minister Boris Johnson insisted that supplies were now on track.

We now are starting to see the situation improve. I would just really urge everybody to just go about their business in the normal way.

But industry experts suggest that shortages could linger for months. A constellation of international causes are to blame here. Pandemic unlocking global supply chain, hiccups, a lack of workers. Those frustrations are affecting plenty of countries. But Britain has one more thing working against Brexit.

So towards the end of last week, there were reports that a few petrol stations in Britain had ran out of petrol. So rumours began that this was sort of the start of a wider shortage.

Duncan Weldon is the Economist's British economics correspondent.

The government were very keen to say there is no shortage of petrol. But it's a bit like the dynamics of a bank run, isn't it? When someone tells you there is no shortage, people hear shortage, they don't hear no shortage. And the British public at the moment are a bit frazzled.

How do you mean? How are the people frazzled?

Petrol is not the first thing that's been running short this spring. This early summer we saw shortages of construction materials, saw shortages of computer chips, and then in the last few weeks it's really came home to the high street. We've seen Wetherspoons, a big pub chain, start to run out of certain types of beer. These shortages have been here throughout the year and petrol is just the latest. And you know, I don't want to encourage people to panic buy. And obviously as a rational economics correspondent at the Economist, I don't like to think that I panic, but when I saw queues at petrol stations, I did not panic buying, but what I like to think of as dynamic personal inventory management and topped up my car.

So let's wind back from your dynamic inventory management and talk about what has caused all of these shortages.

Well, on one level, Jason, it's really straightforward. What we've seen is that as restrictions have been eased as we come out of the pandemic, demand has recovered much faster than supply. And you're seeing exactly what you'd expect. You're seeing some production bottlenecks, you're seeing some shortages and you're seeing quite a big pickup in British inflation. So consum, price inflation, the usual measure was running at an annual rate of under 1% at the start of the year. By July it was back above 2%. And the bank of England expects inflation to be above 4% by the end of this autumn, continuing throughout the winter. And then you've seen some more specific problems. So you've seen this chip shortage globally hitting car production, you've seen a lumber shortage globally at the start of the year hitting construction, and then some more specific factors. But yeah, it seems to be this sort of almost revolving carousel of different shortages week after week that seem to.

Be sort of coming together like London buses in Britain. But the other thing about Britain's story is that it's also dealing with lingering continuing effects of Brexit. How does that figure in?

Yeah, so Britain left the European Single Market and the European Customs Union at the very start of this year. Now, we didn't get that cliff edge fall off car crash that some people had warned about. Instead what we're having is more like a slow loss of tire Pressure, and it's taking a while for that to feed through. It's really hard to separate the Brexit impact from the pandemic impact, but it's there. Some European small and medium sized businesses have already decided it's just not worth the hassle of exporting to Britain. But the key Brexit impact we're feeling immediately is a shortage of lorry drivers.

And what's behind that? Why is that a key example here?

So Britain relies on about 600,000 drivers with licenses to drive heavy goods vehicles, big lorries, to keep the country running. That's what's caused the petrol shortage this week, a shortage of drivers. Now, at the moment, the industry thinks we're short about 100,000 drivers. About 40% of that is you can blame on the impact of the pandemic that lots of driving tests were suspended, so people simply haven't qualified. But the rest is not just a pandemic impact. Working as a heavy goods vehicle driver in Britain, as in much of the world, is not a particularly pleasant job. It involved long antisocial hours and the wages many people have decided simply don't compensate for doing it. The industry has become more reliant in recent years on European workers. We've had a pandemic. Many of these European drivers have returned to their own country and suddenly we find ourselves shocked. About 100,000 drivers. And that's what's behind the beer shortage at Wetherspoons, that's what's behind the petrol shortage this week. Just not enough people to physically move these goods around the country.

So some big structural changes, some random unlucky changes and some sort of slow burn changes yet to reach their worst. I mean, in the bigger picture, how long will all of this last?

So people are looking at the moment at the shortage of HGV drivers. As you know, the oil that lubricates this lets us move around the country. Now the government has announced they're going to make more than 5,000 temporary visas available for HGV drivers to come over from Europe. Now, in the context of a shortage of 100,000 drivers, 5,000 isn't a very big number. And these are just three month visas which will last until Christmas Eve. Other European countries have their own shortages of HGV drivers. At the moment, it's unclear how appealing moving to Britain for just three months and then being deported on Christmas Eve is going to be. The industry is making efforts to train new drivers. Wages have gone up, but it takes a while to learn how to reverse one of these vehicles, it's not an instant fix.

And what about the other shortages, though, beyond the drivers?

Now, the general sense out there in the retail sector amongst manufacturers is these shortages will ease, the economy will adjust. We will see wages rising and pulling workers to the sectors where they need to be. But this could all take six to 12 months and it's very hard at the moment to predict where the next pinch points are going to be and what our Britain Economics correspondent will be writing about next week. Where is the next shortage? But other shortages will, I'm afraid, pop up over the next few months. Until we get on top of this.

What does all this mean for the Prime Minister, do you think? Could it shake his support?

You know, the time of the year when Boris Johnson pledges to save Christmas seems to be coming earlier and earlier, doesn't it? I mean, last year it was about COVID this year it's about shortages. What we want to do is make sure that we have all the preparations necessary to get through till Christmas and beyond, not just in the supplying the petrol stations, but all parts. We've already seen Bernard Matthews, the single biggest turkey producer in Britain, worry about a shortage of turkey this Christmas. Now, the Boris Johnson government sometimes appears to be levitating with very high polling rate, despite all of these things going wrong. But you do wonder for how long that can continue. Now, the pandemic was a global thing. Lots of these shortages we're experiencing this autumn do appear to be specifically British. Other European countries are not running out of petrol and eventually it seems likely there will be a political price to be paid for that.

Duncan, thanks very much for joining us.

Thank you for having me.

This week's episode of Babbage, our sister show on science and technology, takes a look at the psychology behind dynamic personal inventory management. Rachel McCloy, an associate professor in applied Behavioral Science at Britain's University of Reading, isn't surprised.

Panic buying is not a new phenomenon. It's happened for many, many reasons at many different times. But this has been a long term period of instability, so we've become more used to doing what we can to manage our emotions here. So I imagine at the minute people are a lot more susceptible to panic buying because we've been in this constant cycle of being a bit afraid of things and not really knowing what to do.

Look for Babbage. Wherever podcasts are in ample supply. Tunisia is set to get its first female prime minister. Yesterday, President Kais said appointed Najlah Buddhan Ramadan, who, like him, is a political novice. I have decided to ask you to form a new government, he told her. This will be the first time in Tunisia's history that a woman leads a government until there is an end to these exceptional times. Her appointment is exceptional news, not just because it's a her. It marks a change in the political turmoil that's been gripping the country for months. In July, Mr. Said assumed what should have been temporary emergency powers. He suspended Parliament. He got the army to block its doors with a tank. Since then, his promises to return things to normal, to get parliament back to work, have gone nowhere. For a country that's still finding its feet a decade after ousting its dictator of 23 years, Tunisia's Democratic footing had been looking shaky, and it may still be.

Kais Said was elected president in 2019, really as a protest candidate.

Greg Karlstrom is our Middle east correspondent.

This is a political outsider. He was a law professor in his previous career who ran on a somewhat populist campaign of attacking the post revolutionary political elite in Tunisia. And these criticisms resonated with a lot of voters who were incredibly frustrated with a stagnant economy and with a factious government that seemed powerless to do anything about it. So he won overwhelmingly in elections. He won with 73% of the vote. And similarly in July, when he decided to suspend parliament and assume emergency powers, he did that as well with a high level of popular support.

And what's happened since then?

Since then, he's made it clear that he has no intention of relinquishing power anytime soon. The constitution allows the president to assume emergency powers for a period of 30 days. That deadline, of course, came and went. In August, Said retained those powers. Then on September 22, he came out with a decree that really codified this power grab. He announced that he would suspend large parts of the constitution. Parliament would not only remain frozen, but lawmakers would be denied their salaries. He said that at some point in the future, he would have some sort of a process, be it a national convention or a national dialogue in which Tunisians could discuss changes to their political system. But until that time, he's ruling by decree.

And how have the people reacted to all of that?

You know, back in July, when he first assumed emergency powers, there were some people in Tunisia who said, he's coming in to clean house. Give him a chance. He's going to do this for a short period of time, you know, to shake up this ossified political system, and then he's going to step back. I think there is certainly a time limit on how Much popular support he has for many people in Tunisia, and this has been true for years. Their main concern is not the structure of their political system, it's the economy. This is a country where the economy is in incredibly rough shape. Growth has been stagnant for a number of years. That's going to be the main issue, I think, for many Tunisians. If Kais Said can do something on the economy, he'll have support. But so far, for the two months that he's been in control, he really hasn't outlined much in the way of an economic program. And I think if he lets the economy continue to drift and continue to lapse into crisis, then he's going to lose popular support very quickly.

But one of the things pointing to this being straight out of the dictator's playbook was that he hadn't appointed a prime minister. As he said, he what do you make of the fact that he's done so now?

I would say a few things about this appointment. First of all, it's good that he's chosen a prime minister on some level. It is a recognition that this is a country facing a lot of problems. But it's also useful for him politically. It serves his own interests, it buys him a bit of time, it deflects a bit of political pressure, gives him someone to blame when things go wrong. So it also serves his own interests. Of course, as you said, this is the first woman to hold this job. Certainly a historic announcement in that sense, but it comes with a couple of caveats. First, the prime minister, like the president, is an academic by training. So you now have both the president and a prime minister who have no background in either politics or economics at a time when the country is facing really profound political and economic crises. The other point, and more significant I think, is it's not clear yet how much power the prime minister is going to have. Tunisia has been, under the constitution, a weak presidential system. The prime minister has run most of the day to day affairs of government, but of course, that constitution is now mostly suspended. Parliament is suspended. Said has given every indication that what he wants to create is a strong presidential system. And perhaps a telling moment yesterday when he announced this new prime minister, and again first woman to hold the job. Historic moment. But when the two of them appeared on camera to make this announcement, she didn't say anything. Only he spoke. And some people in Tunisia saw in that a portent of perhaps what their power dynamic will be like going forward.

So to all appearances, he is still very much the one in control, intends to be in control. What do you think his plans are now?

I think it's too early to say exactly what he aspires to, exactly what he's trying to achieve. And that's part of the problem with Qaisaid. Since he was elected, he was really a blank slate of a candidate, someone onto which anyone could project their hopes and fears. But he didn't take office with a fully formed political program. So it's very hard to say exactly what he intends. We can look back to statements that he's made in the past where he's said that he's a democrat, but he's professed support for an indirect system of democracy where he'd like to see voters choose candidates for local governments, and then those elected officials would elect representatives to higher office. Now you can debate whether or not that's a valid system. Certainly one of the problems in Tunisia historically has been a very centralized government and a lack of power for local and municipal governments.

Well, and for any kind of political opposition. I mean, what does the opposition look like at the moment while all of this is in play?

The political opposition at this point is most of the political parties in Tunisia. They have all been predictably critical of Khay Said's actions over the past few days. We've heard from both Islamist and secularist parties that they are unhappy with his decree, that they are unhappy with the suspension of parliament and of the constitution. But I think in terms of that opposition actually translating to real pressure on him, there are two things to watch. One is what happens with popular support. There have been small protests so far, but nothing on a large scale. The other question is the military. Tunisia, unlike a country such as Egypt, has historically had a small and apolitical military. They have so far gone along with the president, they've barred the doors of parliament, for example, on his orders. But we'll have to see going forward whether the military remains on the president's side or whether they take a more neutral role.

But as you say that the people aren't keeping a close eye on the structure of their government. Meanwhile, the leader is increasingly dictatorial. I mean, what prospects for Tunisia's relatively young democracy?

I think we can certainly say this is the most profound challenge to Tunisia's democracy in the 10 plus years since the revolution. Not to say that the leaders of the established political parties don't bear some responsibility for this situation. They have been sort of consumed with ideological struggles over the past few years between secularists and Islamists, and they've really let the economy drift and they've let it get to this point where so many people are willing to go along, at least in the short term with this undemocratic power grab. And I think it's clear at this point, two months on, having now suspended the constitution and become this almost dictatorial figure, he's planning to hold power for a while. And it is a profound challenge to the Tunisian political system.

Greg, thanks very much for joining us.

Thank you.

In India, it's tough being an unmarried couple. For years, lovebirds celebrating Valentine's Day in Mumbai would be harassed and threatened, sometimes even rounded up by the police. Last month, a state run park in Hyderabad put up a notice saying unmarried couples weren't welcome inside. The notice was later taken down, but the conservative notions behind it remain. Yet an increasing number of canny companies have found creative ways for couples to canoodle, a sign that attitudes are perhaps slowly starting to change.

Unmarried couples, one of the biggest challenges that they face is that they don't have enough space.

Abhishek Kumar writes about India for the Economist.

In their homes, there's always somebody where you can't just invite your girlfriend, it is frowned upon. So the only place that they have is, let's say, a parking lot where the girl and the boy can spend some time together on their motorbike. Some of these places can be near busy traffic junctions. But these days couples also have an additional option which is a good way to step out in the open and exercise something that is more private.

And what is that new option?

Well, there have been quite a few micro stay hotels that have sprung up across the country where couples can book a room for as little as 3 hours or 6 hours or 12 hours and they could cost you no more than 500 odd rupees. That's barely 7 dol. This concept of love hotels that is quite well established in some of the other Asian countries like Thailand, South Korea and Japan, but not so much in India. One of the founders of an app that I was talking to which lets people book these rooms, he said that it was a tough sell in the first few years to convince hotel owners to list themselves on the app because it was looked down upon and they didn't even realize that it was legal in the first place. But over the last couple of years, things have changed. And he says that there are more and more enquiries that he gets, which is a completely different situation than what.

Was a few years ago because presumably it's a good business opportunity for these hotels if those rooms are otherwise going Empty, Yes.

It's clearly an additional source of revenue wherein some of these hotel owners, they told me that they rent the same room twice or even thrice in a day. One entrepreneur, he told me that the amount of enquiries that he gets to sign up these hotels on these apps has risen three times compared to what it was before the pandemic. And then you also have these value added services that hotels usually get where couples may ask for decorations using flowers and balloons. They may cost up to two to six thousand rupees. And then there are times where if there's a couple who has just recently been through a breakup, maybe the guy can ask the hotel management to write sorry with flower petals on the bed. The older folk. One hotel owner was telling me that they also request buy Viagra from a pharmacy nearby. There are hotels with silent floors where maintenance and other interruptions that happen by the staff. They are strictly told not to bother these unmarried couples because the idea is very clear why they are there for privacy.

So business owners are clearly coming on board with this idea and they know it's legal and they're finding ways to make money. It sounds like hand over fist, but do you think it's a sign of social change rather than simply making money off it?

Yes. Overall things have indeed changed in the last few years. There are in fact apps like Stay uncle, which was among the oldest service providers in this industry where they are pretty much out there. They're website or the Facebook page talks about we are all clean for you to get dirty. So they provide what they call the love kit to couples. That includes condoms, chocolates, lube, even a blindfold for that matter. They say that we are not in the hotel business, but in the freedom of expression business. I think there is that much more acceptance and also because of social media and they are that much less shameful about doing these things than what the previous generations were. These things indeed are changing over time.

Abhishek, thank you very much for your time.

Thank you, Jason. Thanks for having me.

That's all for this episode of the Intelligence. If you like us, leave us a rating and a review and you can subscribe to the economist@the economist.com intelligenceoffer. The link is in the show notes. See you back here tomorrow.