Nine Out of Ten Businesses in North East Worried About Costs

The Northern Echo are reporting that nine out of ten Businesses in North East worried about costs, including inflation and rising energy prices. A survey by the North East England Chamber of Commerce found that although UK and export sales and investment indicators were in positive territory, businesses in the region have substantial concerns about rising costs.

President Lesley Moody said the Chancellor’s spring statement had failed to bring the action needed to head off worries. She said: “The results of this survey paint a clear picture of businesses doing their best to recover and grow in the face of continued difficult circumstances. A strong proportion of respondents had attempted to recruit into full-time, permanent positions in the last three months. But there is also a huge and growing concern about costs, with the top five perceived issues for businesses listed as inflation, energy prices, staff costs, interest rates and taxation “.

“The Chancellor’s Spring statement failed to bring anything like the action required to head off these concerns, so our future remains uncertain. We can’t afford for this recovery and growth to taper off due to lack of support. However, with the resilience and ingenuity of our region’s businesses, I have no doubt their ability will enable them to adapt and grow, whatever the prevailing economic weather.”

She added: “As we marked two years since the first national lockdown, we in the business community have had no time to pause for reflection. The pandemic challenges have given way to a cost of living and operating business crisis. We have also seen the impact of the start of the geopolitical and humanitarian crisis from Russia’s invasion of Ukraine.”

Meanwhile, Labour has proposed a package of “emergency” measures to help ease the burden of rising costs on businesses.

The party claims that, under its plans, a typical small factory or workshop would save £2,700, a pub would be £2,600 better off, and the average cafe or restaurant would benefit to the tune of £2,700.

Jonathan Reynolds, the shadow business secretary, said businesses facing “a tidal wave of extra costs” are being “held back” under the Conservatives.

“Action is needed now to ensure firms remain viable and extra costs aren’t passed onto consumers worsening the cost-of-living crisis,” he said.

“Under Labour small firms would be around £2,000 better off from this week through our plans to cut taxes and we wouldn’t penalise small firms for expanding. Labour would back industry with our energy support fund and long-term plans to green the steel industry. “It’s clear great British businesses can’t afford this Government.”

Labour’s package of emergency measures would include raising the threshold for small business rates relief for a year, from £15,000 to £25,000, from April 1.

Meanwhile, the party’s energy support fund would prioritise energy-intensive industries such as steel, glass and ceramics. The final part of the package would be to scrap the Government’s planned rise in national insurance contributions.

A Government spokesperson said: “No government can control the global factors pushing up prices, but we will act where we can to support businesses.

“We provided an unprecedented package of economy-wide support that saved millions of jobs throughout the pandemic. At the spring statement we went further, announcing an increase to the employment allowance which will cut taxes for hundreds of thousands of businesses and a fuel duty cut. Eligible high street businesses are also able to get 50 per cent off business rates bills, and benefit from a freeze to the business rates multiplier that puts the brakes on bill increases and is worth £4.6 billion over the next five years.”

Union leaders have also called for an “emergency budget” to help families who are at “breaking point”.

The Trades Union Congress (TUC) said pay and benefits will be “swallowed up” by higher bills and inflation, with households hit with crippling new energy bills as the price cap rises on Friday. The union body said measures announced in the Chancellor’s spring statement last week were “woefully inadequate”, warning of the worst living standards crisis in generations

The TUC said the Chancellor should return to Parliament to announce fresh economic support, including an increase in the minimum wage to at least £10 an hour, new grants paid for by a windfall tax on energy and oil company profits and an increase in Universal Credit.

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