Adrian Hanrahan, managing director of West Midlands-based chemical manufacturer, Robinson Brothers, recently spoke of how rising costs are beginning to have an impact on business and consumer confidence.
At a time where the cost of materials and energy has significantly increased, Robinson Brothers has also had to weather from this month onwards the increase in employers’ National Insurance, which will add a further £90,000 in costs to the company’s 250-person payroll.
Speaking to the BBC, Hanrahan [pictured] said that the tax rise could not have come at a worse time, with the costs of energy and materials already having seen such sharp rises and consumer confidence beginning to deteriorate as a result.
“This is worse than Covid or the 2008 crash”, Hanrahan said. “There isn't a day that goes by when you aren't hit with another rising cost.
“I'm usually an optimistic person but that has been zapped. I just got off a call with a customer who wants to hold less stock so that means we are holding back on production and investment ourselves.
“It [the National Insurance increase] is another kick in the teeth at a time when everything is going up. We use nickel as a catalyser - that's tripled [in price]. Plastics, transport, you name it. The sheer volume of price increases is incredible, and we can't pass it all on as my customers - and my customers' customers - can't afford it.”
Fortunately for Robinson Brothers, the firm had hedged some of its energy costs, which has seen it avoid having to pay out an additional £1.75 million in energy bills per year. Incredibly, as Hanrahan candidly revealed, this has proven the difference between the business surviving and going under.
“If we hadn't hedged some of our energy costs, we would be looking at £1.75 million extra a year in bills and that would have probably finished the company,” Hanrahan explained.
Indeed, many firms have already gone under on account of rising costs, with those that have not bought gas in advance or those whose energy deals are coming to an end averaging price increases of 250 per cent without the protection of a price cap, the BBC reports.
The BBC's business editor, Simon Jack, also added that the number of companies that became insolvent in February 2022 was 23 per cent up on the level recorded in the same month of last year. The rate of county court judgements against businesses also doubled year-on-year.
The government has sought to intervene by raising the Employment Allowance, which chancellor Rishi Sunak said would equate to a tax cut for half a million British businesses, but for so many the cost of operating continues to pose a major problem and piles pressure on ministers to provide more targeted support measures.
Image provided by Robinson Brothers
