Manchester’s oldest family run craft bakery has been warned by its supplier it faces a £250,000 increase on its yearly bill. Robinson’s bakery, based in Failsworth, has survived two World Wars, the Covid-19 pandemic, and many Prime Ministers since first being established in 1864 – but the energy crisis and cost-of-living crisis threatens to wipe it off the map.
David Robinson, who, while semi-retired, still helps with the running of the bakery with his daughter, Grace, describes the potential hike in the businesses energy bills as a ‘suicide note’, with one of their business customers already going bust. The dramatic rise in energy bills comes at a time when the cost of ingredients is rising on a weekly basis and customers have less money to spend due to the cost of living crisis.
‘Serious intervention’ from the government is needed if many similar businesses are to survive the winter, David believes, with the current projected increase in bills ‘completely unsustainable’. He told the M.E.N how their energy bills currently stand at £18,000 per year, but as their contract is up for renewal at the end of October, he has been told they will rise to at least £72,000 – a rise of 400 per cent.
However, he was subsequently told that if he didn’t immediately sign up to this six month increase his bill would be put up even further to an eye-watering £270,000 – an increase of 1,400 per cent. “It’s totally unsustainable,” David said.
“It can’t possibly go on like this, it’s ridiculous. We’re just keeping our fingers crossed and hoping the next Prime Minister and Chancellor will get together and do something to stop the prices going up to these levels, but we’re not holding our breath.
“Liz Truss was asked a question about this at one of these hustings recently where she said she would reduce corporation tax to help business. But I’ve never heard such nonsense as we and countless others don’t make that kind of profit in the first place.
“Others, including many pubs, are suggesting reducing VAT which could help them but it wouldn’t help us as we only do food and we reclaim that VAT anyway.”
He added: “We can take bills going up a reasonable amount but this is totally unreasonable. As soon as these increases hit all hell is going to break loose for businesses, they (government) have got to do something about it.
“I’ve had sleepless nights since I got these letters to be honest and the only advice I’ve been given is to hang fire for three or four weeks to see what happens. But I can’t sign up to this, it would be a suicide note for the business. We couldn’t afford £72,000 let alone £270,000, we’ve got 22 staff to look after too.”
Local business leaders, including Greater Manchester’s night time economy advisor, Sacha Lord, and William Lees-Jones, managing director of Manchester brewery, JW Lees, have been calling on the government to act over recent months as hundreds of thousands of jobs could be lost. Mr Lord’s latest post on the energy crisis – and how it could affect the hospitality industry – said more than 619,000 jobs could be lost if as many pubs close as they think, adding “this (government) silence is ruining peoples lives and future.”
JW Lees managing director Mr Lees-Jones has also called on the government to act on this as a matter of urgency. He tweeted: “Fearing for pubs trying to keep the lights on this winter – what’s the plan Liz Truss and Rishi Sunak? This feels more of an existential threat than Covid and something needs to be done, not just for pubs but all business.”
The closure of pubs and other businesses would affect the ‘whole chain’, Mr Robinson said. He says that if pubs go out of businesses over the sudden increase in bills, bakers such as his, and other food businesses like butchers will struggle from the loss of major customers.
“Over the past five or six years it has risen slowly from £14,000 to £18,000 which is much more manageable,” Mr Robinson said of their energy bill, “But thinking that businesses can manage this is a nonsense,” he added.
“We’ve had quite a shocking year as it is with raw material costs going up and up since Christmas, with another ten materials set to go up soon,” he added. “We can only put prices up so much but then customers are struggling with rising bills and the cost of living themselves so they don’t have as much money to spend. It’s all very scary at the moment.
“Serious intervention is needed from government. We’ve already lost one big customer in Manchester due to them going into administration and that’s before the prices have even gone up. It’s no good giving help in a few weeks, action is needed now.”
Angela Rayner, the MP whose Ashton-under-Lyne constituency covers Failsworth, and deputy leader of the Labour Party, said: “It’s clear that we are in for extremely difficult times ahead. The energy crisis isn’t just leaving millions of families worried sick, sky-rocketing gas and electric bills are threatening businesses across the country.
“Labour has a plan to help businesses and the jobs they create. We will protect those businesses most affected by energy prices and give our high street firms the help they need to get through this winter. Our plan for businesses includes a £1 billion contingency fund to provide help to energy intensive industries like steel, chemicals and ceramics.
“We would cut business rates for small businesses in 2022/23 by increasing threshold for small business rates relief from the current threshold of £15,000 to £25,000. This can save local businesses up to £5,000 this year. We want to provide support right now but Labour will also replace the current business rates system to create a fairer system fit for the 21st Century.
“Our plan to support businesses is funded by an increase in the Digital Services Tax this year, raising over £2 billion for the most profitable global tech companies. This is a national economic emergency. Businesses need solutions now, not a government missing in action.”
A Government spokesperson said: “No national government can control the global factors pushing up the price of energy, but we will continue to support business in navigating the months ahead. This includes doubling our support for high energy usage businesses, reducing employer national insurance by increasing the Employment Allowance, slashing fuel duty, introducing a 50% business rates relief and putting the brakes on bill increases by freezing the business rates multiplier – worth £4.6 billion over the next five years.”