Peterborough business leaders urge support for small enterprises as economy tips into recession

Business leaders in Peterborough have called for greater support for small enterprises after new figures revealed the economy has slipped into recession

Support around energy costs, VAT payments and a focus on measures that actually grow the economy are the principal concerns for business owners who fear the mention of recession will squeeze consumer spending further.

A recession is defined by two or more quarters in a row of falling GDP and according to the Office for National Statistics the economy contracted for the second quarter in a row in the final three months of 2023 by 0.3 per cent.

Entrepreneur Jo Bevilacqua, owner of hair and beauty salon Serenity Loves, in Oundle Road, Peterborough said: “I think today’s news is another kick in the teeth for small business owners.

"Not only are we still recovering from the aftermath of Covid, the hikes in energy costs, higher interest rates and the cost of living crisis, I now believe that this news of a recession is going to further panic consumers to tighten their already tight financial belts.

“In the last year we have already seen clients stretch out their appointments leaving longer in between coming back, opt for cheaper services, for example, a dry cut instead of a wash cut and blowdry or sadly losing clients altogether due to their budget restraints.

"It’s devastating as we have worked so hard over the last 12 years to build a business that offers a great service that people want to come back to, but to cover all of our costs we have to increase our prices to ensure that we still have a business to open with employed staff that are paid well.

She added: “We need more support and changes from the government regarding energy hikes, VAT cuts for service-based businesses and sticking to their word to grow the economy, and we need it quickly before even more small businesses fail and the people who work in them lose their jobs and the owners lose everything they’ve worked for.”

Adrian Posnett, managing director of Oakham Ales, in Maxwell Road, Woodston, Peterborough, said: "We are seeing that sales are stubbornly remaining at a level well below the pre-pandemic levels of 2019 and of course the financial impact of COVID-19 still casts a dark financial shadow over the brewing and hospitality industries.

“The pressures the industry faces at present are unprecedented.

“Oakham Ales does benefit from having strong brands, a great reputation amongst both drinkers and hospitality industry customers and a committed ownership.

”And as ever, we’re determined to ride out the current pressures. But overall we would have to say that an economy in recession and the inflationary pressures faced by our customers and ourselves remain a major concern for Oakham Ales.

“So we’d once again echo oft-repeated industry calls for the Government to implement urgently needed measures in two key areas to ensure the survival of brewers and hospitality businesses.

"They are a cut in excise duty on draught beer and business rates reform for pubs that brings an outdated system up to date and recognises the key part pubs play in local communities.”

He added: “In the brewery industry we have seen news this week that a large and highly respected regional brewer has needed to begin a search for additional funding and several well regarded small and medium-sized breweries have gone out of business or needed rescuing over the last few months.

“We understand that several others are on the brink as we speak.

“All this is on top of over 80 brewers closing in 2022 and over 30 going under in 2023.

“And it’s not just brewers that are feeling the pinch.

“Over 550 UK pubs closed their doors in 2022 and almost as many called last orders in 2023.”

Mike Greene, chairman of the Peterborough and Stamford Chamber of Commerce, said: “I think the recession will be short term and shallow.

"But we should never be complacent when the word recession is used.

"The problem is that government is too focused on the general election instead of resolving the problems of today.

"There needs to be more focus supporting small businesses, which are the lifeblood of the economy – this is where the growth will come from,

"There are 5.6 million businesses in the UK but 99.2 per cent employ less than 50 people. Yet everything seems to revolve around the 7,700 businesses that employ 250 or more people.”

William Burgess, chairman of fresh food supplier Produce World, in Yaxley, said: “I think this is old data.

"I feel the economy has already moved on. We are already out performing other leading economies.

"Our business is doing well but I think food inflation will be about for some time. The weather has impacted vegetable production and prices will continue to rise.”

Entrepreneur Neville Wright, who created the baby equipment retailer Kiddicare with his wife Marilyn in 1974, said: “This is not a blip and I think lots of businesses will go bankrupt.

"A lot of the problems have come from the decision to shut the economy down during the pandemic.

"The economy has been propped up and is just not being run properly by the government – it could be doing a lot better.

"We do have a lot of work on at the moment with £140 million worth of construction in the pipeline but it could all come to an abrupt halt.

"We have seen it before in 2007/8 and if it happens again it won’t surprise me.”