Pubs and restaurants face ‘terrifying’ price rises

Pub and restaurant prices are facing "terrifying" price rises because of a chronic shortage of workers, industry leaders have warned.

Ian Wright, the chief executive of the Food and Drink Federation, told MPs that inflation in the hospitality sector was running at up to 18 per cent as businesses faced soaring wage, energy and commodity costs.

It came as haulage bosses said the national lorry driver shortage was "not visibly getting better" and could take around a year to recover.

Mr Wright told the Business, Energy and Industrial Strategy committee: "In hospitality, which is a precursor of retail, inflation is running between 14 per cent and 18 per cent. That is terrifying.

"I remember inflation going to 27 per cent under the Callaghan government in 1977, and I remember a lady going around Sainsburys with stickers twice in the same hour to change the prices. We cannot go back to that."

Rising prices would inevitably be passed on to consumers, Mr Wright said, adding: "If the Prime Minister is – as I know he is – serious about levelling up, inflation is a bigger scourge than almost anything because it discriminates against the poor."

The most recent figures show that prices across all sectors rose by an average of 3.2 per cent over the past 12 months. Inflation is expected to rise above four per cent by the end of the year and remain high well into 2022.

The Road Haulage Association (RHA) has previously warned of a shortage of around 100,000 drivers and said the problem has not improved despite government efforts.

Duncan Buchanan, the director of policy at the RHA, told the committee: "Things are very challenged at the moment. There are widespread shortages of lorry drivers, which are leading to delays and frustrated trips.

"Among our members, we are still getting reports that this hasn't eased at all. Things are not visibly getting better at this stage, and I know there are a number of measures that have been put in place, stepping up training, stepping up tests, but on the ground that isn't having much of an effect."

Figures revealed by the Office for National Statistics (ONS) showed that driver numbers have plunged by 53,000 over the past four years, largely because retiring drivers have not been replaced fast enough by new recruits.

An ONS survey also revealed that 29 per cent of people had reported difficulty in finding food or medicines in the last month, compared to only 14 per cent in August, with the ONS saying the lorry driver shortage was likely to be one of the factors affecting availability of items.

The UK haulage sector is battling to bring more workers on board, with testing having been impacted by the Covid crisis. ONS data show that there were 16,022 practical driving test passes of the type required to become an HGV driver in the year ending in June, compared with an average of 41,731 a year over the previous five-year period.

The Government has recently allowed temporary visas for EU lorry drivers in a bid to address the shortage, while also changing the driving test requirements in measures to help bring more HGV workers on board.