Small enterprises throughout Manchester are facing a progressively difficult economic climate as escalating costs jeopardize their existence. Owners in the hospitality industry, especially, are voicing worries about how the increasing expenses, coupled with governmental measures, are leading to a fragile predicament. The apprehension of shutting down is prevalent among many as they endeavor to balance soaring expenditures with shrinking profits.
Mark Wrigley, who owns Atlas Bar in Manchester’s downtown area, has expressed his dissatisfaction with what he perceives as inadequate assistance from the government. Wrigley, who has been running the bar since 2012, says he feels «let down» by the policies announced in the government’s Autumn budget. He thinks these initiatives, along with rising energy costs, business taxes, and salary hikes, could be disastrous for small businesses like his.
«I intended to grow my business by bringing in additional employees and extending our operating hours,» Wrigley stated. «However, those plans have now been completely shelved. Instead, I’ve been forced to reduce staff hours and raise prices simply to keep the business running.»
Wrigley calculates that the overall effect of new government measures and increasing expenses might increase his business costs by an additional £55,000 this year. This amount covers the rise in employer National Insurance contributions, an increase in the National Minimum Wage, and surging energy bills. «I spent weeks with my head in my hands, questioning how we could possibly manage,» he confessed.
Wrigley estimates that the combined impact of new government policies and rising costs could add an extra £55,000 to his business expenses this year. This includes higher employer National Insurance contributions, a rise in the National Minimum Wage, and soaring energy bills. “For weeks, I found myself sitting with my head in my hands, wondering how we could possibly make it work,” he admitted.
Companies under pressure throughout Greater Manchester
Wrigley’s difficulties are not isolated. Tony Cunningham, who owns Leckenby’s Tea Room in Bury, has characterized the present time as «the toughest in 27 years.» Cunningham’s establishment is under considerable financial pressure, with business rates scheduled to more than double in April and electricity expenses projected to climb by over 30%. Furthermore, National Insurance and wage contributions are rising by an extra 10%.
«We’re facing challenges from every direction,» Cunningham remarked. «For businesses like mine to endure, increasing prices seems to be the only option, but that could deter customers. It’s a relentless cycle.» He also highlighted that the escalating expenses might result in more vacant shops on high streets, causing further damage to local economies.
The Federation of Small Businesses (FSB) has mirrored these worries, cautioning that numerous small companies in the hospitality industry have already had to shut down before the adjustments in April. Robert Downes, an FSB representative in Greater Manchester, described the circumstances as critical.
«Companies are getting hit hard by tax hikes, and many just can’t handle the extra expenses,» Downes explained. «Without government action to mitigate the impact, we’ll witness even more shutdowns. That’s detrimental not only for the businesses but for the entire economy. Burdening firms with steep taxes won’t foster growth.»
“Businesses are being hammered by tax increases, and many simply can’t absorb the additional costs,” Downes explained. “If the government doesn’t take steps to cushion the blow, we’ll see even more closures. That’s bad news not just for the businesses, but for the economy as a whole. Punishing firms with high taxes won’t lead to growth.”
Government defends its economic strategy
A Treasury spokesperson has defended the government’s approach, emphasizing its focus on boosting economic growth and supporting high street businesses. The spokesperson highlighted measures such as permanently cutting business rates and capping corporation tax for the duration of the current Parliament.
“We’re leveling the playing field for high street businesses,” the spokesperson said. “By removing the £110,000 cap for business rates relief, more than 280,000 retail, hospitality, and leisure businesses will benefit. Our goal is to go further and faster to stimulate growth and prosperity.”
An uncertain future for small enterprises
For small enterprises in Manchester, the blend of rising expenses and economic unpredictability is forming a perfect storm. Owners are compelled to make tough choices, such as reducing staff hours or increasing prices, to remain viable. However, these actions carry risks, and many worry that the pressure might eventually become overwhelming.
Wrigley, for instance, is concerned about how raising prices could impact customer loyalty. «There’s a limit to what people are willing to pay before they begin seeking alternatives,» he noted. «High inflation is already straining everyone’s finances. If we raise prices too much, we’ll lose customers. But if we don’t, we’ll collapse.»
Wrigley, for example, worries about how price increases might affect customer loyalty. “There’s only so much people are willing to pay before they start looking elsewhere,” he said. “High inflation is already squeezing everyone’s budgets. If we push prices too far, we’ll lose customers. But if we don’t, we’ll go under.”
For Cunningham, the challenges are compounded by the broader state of the high street, where shuttered shops and declining foot traffic paint a grim picture. “When businesses close, it creates a ripple effect,” he explained. “Fewer shops mean fewer customers, which puts even more pressure on those of us who are still here.”
Business organizations and industry representatives are urging the government to take more assertive steps to aid small enterprises. The FSB has called on lawmakers to rethink proposed tax hikes and implement strategies to assist businesses in handling rising expenses. Without further assistance, many worry that small businesses—frequently referred to as the backbone of the economy—will persist in facing challenges.
Business groups and industry advocates are calling on the government to take more decisive action to support small businesses. The FSB has urged policymakers to reconsider planned tax increases and introduce measures to help firms manage rising costs. Without additional support, many fear that small businesses—often described as the backbone of the economy—will continue to struggle.
The government, meanwhile, insists that its policies are designed to foster long-term growth. By cutting business rates and providing targeted relief, officials believe they are helping businesses weather the storm. However, critics argue that these measures do little to address the immediate financial pressures facing small firms.
For Wrigley, the uncertainty surrounding the future is one of the most challenging aspects of the current situation. “It feels like we’re constantly firefighting,” he said. “Instead of focusing on growing the business, I’m spending all my time trying to figure out how to survive. It’s incredibly frustrating.”
As small businesses across Manchester and the UK navigate this difficult period, their resilience will be tested like never before. Whether they can adapt and thrive in the face of rising costs and economic uncertainty remains to be seen. For now, business owners like Wrigley and Cunningham are doing everything they can to keep the lights on, even as the odds seem increasingly stacked against them.
