Small business owners across Chancellor John Healey's South Yorkshire constituency are expressing deep concerns ahead of Wednesday's Budget, citing mounting employment costs as a major threat to their ability to hire staff. Tony Airey, who has run Wentworth Garden Centre with his family for 40 years, said he had to cut staff rather than hire extra workers last Christmas after rises in National Insurance contributions and the national minimum wage. Airey described any further minimum wage rises as 'unsustainable' and voiced worries about the Workers' Rights Bill, which will bring in the right to sick pay from the first day of illness regardless of hours worked, saying such measures 'mitigate against employers taking on more staff, particularly youngsters.'
The concerns are widespread across the Rawmarsh and Conisbrough constituency, which is home to 90,000 people in some of Britain's most deprived neighbourhoods. Barnsley and Rotherham Chamber, representing businesses in the area, has called for 'direct and urgent' action on National Insurance for under-25s to tackle the youth unemployment 'crisis', and requested a targeted tax reduction package to ease energy and business rate pressures. Chief executive Carrie Sudbury said such measures would give firms 'the headroom they need to hire, innovate and compete.' However, the Chamber noted that Healey's partnership with Prime Minister Andy Burnham had 'begun to steady the ship and renew a sense of optimism into South Yorkshire's business community' compared with previous years.
The chamber's latest members' survey found 57 per cent of firms expected turnover to rise in the next year, while 51 per cent anticipated improved profitability, up from just 34 per cent in the previous quarter. Sudbury said employers were 'ready to consider investment, expand and drive growth, but they need decisive action from Government to sustain that trajectory.' Some business owners expressed more optimism. Mick Warburton, who owns Chantry Brewery and three pubs employing 35 people, believes the 'signs' are there that Healey and Burnham 'want to help hospitality' and expressed hope for action on beer tax. He credited small brewers' relief, which Healey championed when Labour was last in power, with enabling him and his brother Kevin, both ex-steelworkers, to start their business in 2012.
However, Airey has already written to Healey expressing frustration, stating that the previous Budget 'provided any stimulus for growth in our sector (quite the reverse)' and accusing Labour of providing 'absolutely no incentive' for people to set up in business. In Conisbrough, a Reform councillor called for action to cut the cost of employing staff and improved transport links. A hairdresser told locals she cannot afford to take anybody on, meaning she struggles to grow her business by herself. For small business owners and their employees, the Budget outcome will determine whether they can afford to hire and expand or whether mounting employment costs force further staff reductions.
Meanwhile, consumers are preparing for tougher times by trading down and spending more time at home. Sainsbury's reported a 6 per cent rise in sales of its Taste the Difference premium range in the first half of this year as households opt for supermarket premium own-range suppers to save on the expense of going out. Waitrose has launched an £18 meal deal for four designed to replicate the restaurant experience at home, while Marks & Spencer has seen 'picky bits' become one of the country's favourite pieces of slang. Sofa.com, part of Mike Ashley's retail empire, has launched Aqua Clean, a range of wipeable and stain resistant 'performance fabrics', which have quickly become a best-seller, targeting homeowners who are opting to redecorate instead of incurring the cost of moving.