Fuel crisis and supply shortages are a product of the UK’s economic model | Larry Elliott

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It all seems to have happened so fast. Only a few months ago, the government was congratulating itself for the speed at which Britain was emerging from the pandemic. But as the nights have lengthened, there have been empty shelves at supermarkets, spiralling energy prices and queues snaking back from petrol stations.

If there is a general sense of bemusement at all this, then there really shouldn’t be. This is what happens when just-in-time production methods collide with just-in-time government and turn a problem into a crisis.

Lessons have clearly not been learned from the financial crisis of 2008. Then, it was just-in-time banking that had its fundamental weakness exposed; namely that institutions had insufficient reserves of capital to absorb losses. Now a similar problem has affected production supply chains; there is not enough slack in the system to cope with an unexpected shock.

Just-in-time supply chains were designed around lean production and…

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