Bury St Edmunds shopkeepers, restaurateurs and pub owners brace themselves for upcoming cost hikes - with some bills set to more than double
Shopkeepers in Bury St Edmunds are preparing for a perfect storm of rising costs - which could lead to price hikes for customers.
From April, many across retail, hospitality and manufacturing will see business rates, set by the Government, more than double, as a 75 per cent discount comes to an end, post pandemic.
This comes on top of a rise in national insurance contributions for employees, and the minimum wage.
David Marjoram, who runs Bury-based Gusto Pronto brewery and pub chain, said: “From April, the hospitality industry faces a financial cliff edge.
“The Autumn budget hit our industry hard; minimum wage is rising well above inflation, our business rates are skyrocketing by 142 per cent, and employer National Insurance (NI) costs are soaring due to higher contributions and a lower earnings threshold.
“The business rates hike alone is staggering, especially for retail and hospitality still recovering from Covid.
“But the NI increase is arguably worse; a direct tax on jobs in an industry that relies on a large workforce. It’s the opposite of the government’s supposed push for growth.
“To break even, businesses like mine will need to increase turnover by around 10 per cent. For many, survival will be a struggle.
“Customers may well see price increases, but it’s worth remembering that around 40p of every £1 spent in a pub or restaurant goes to the government.
“I believe in paying our fair share, but when the bulk of our income is swallowed up in taxes, something seems seriously wrong.”
Howard Jones, who runs Molly Carpets, in St Andrew's Street South, said: “My business rates have jumped from £178 a month to £427. I was speechless.”
Stuart Hansord, who runs Midgar café, in St John’s Street, said: “I will have to look very closely at all costs. It could mean price rises, which would hit footfall, or perhaps reduced hours for staff. It’s very worrying.”
Giles Henderson, owner of Hendo’s fish and chip shop, in Abbeygate Street, said he feels the business rate system needs reform.
He said: “My rates have risen from £296 a month to £711, despite the 40 per cent discount, we now have.
“The system needs a complete overhaul. The calculations are outdated and there is always some kind of discount on rates, that are basically too expensive.
“I will look closely at the costs, prices, hours; see what happens over the next six months, but most likely take the hit. ”
Charities too are preparing for the cost rises.
Jelena Sarubina, St Nicholas Hospice Care’s corporate services director, said: “As a charity, we are not immune to the rising costs affecting businesses.
“The increases in National Insurance contributions and the minimum wage from April will place significant financial pressure on us, with National Insurance alone expected to add £160,000 to our costs.
“Additionally, although we do receive a discount, rising business rates are impacting our charity shops, which play a vital role in funding hospice care”.
Mark Cordell, chief of Bury St Edmunds BID, said: “The town centre and our businesses continue to thrive but we are all bracing ourselves for the huge increase in operating costs that they will all face from next month, from a government that claims that growing the economy is their number one priority.
“I can only hope that the fabulous support our members currently receive from the local community will continue and that their customers will appreciate that the inevitable price increases that are coming are not their fault but the government’s.”
What the MP says:
Dr Peter Prinsley, MP for Bury St Edmunds and Stowmarket, said he will continue engaging with the government to ensure that support for businesses, especially small and medium-sized, ‘remains a priority’.
He said: “The government has made difficult decisions to ensure economic stability, fund vital public services, and support working people.
“The increase in employer National Insurance contributions is part of a broader effort to balance public finances while maintaining investment in essential services, such as the NHS.
“At the same time, raising the National Minimum Wage is a necessary step to support lower-paid workers and help them keep up with the cost of living.
“While COVID-era business rate relief measures have now ended, the government has committed to wider economic policies that aim to sustain growth and keep businesses competitive.
“These include ongoing support for business investment, tax incentives, and targeted funding for industries facing particular challenges.
“I appreciates the vital role businesses play in Bury St Edmunds and Stowmarket and understand the pressures they are facing and will continue engaging with the government to ensure that support for businesses - especially small and medium-sized enterprises -remains a priority.
“I encourages businesses to take full advantage of available support, such as business rate reliefs, energy efficiency grants, and the government’s investment incentives. If there are specific local challenges, I am keen to hear from business owners directly to ensure their concerns are raised in Westminster.
“For local shoppers, it is more important than ever to support businesses in Bury St Edmunds and Stowmarket.
“Choosing to shop locally helps sustain jobs, keeps the high street vibrant, and ensures that businesses can continue offering quality products and services.”
The changes
National Insurance: The rate that employers pay in contributions will rise from 13.8 per cent to 15 per cent on a worker's earnings above £175 from April. The threshold employers start paying the tax on each employee’s salary will be reduced from £9,100 per year to £5,000.
However, the Chancellor said she would extend the Employers Allowance - the amount employers can claim back - from £5,000 to £10,500.
Minimum wage: The minimum wage for those over 21, will rise from £11.44 to £12.21 from April 2025. For 18 to 20-year-olds, it will rise from £8.60 to £10. Apprentices will see pay rise from £6.40 to £7.55 an hour.
Business rates: The current 75 per cent discount to rates, due to expire in April 2025, will be replaced by a discount of 40 per cent, up to a maximum of £110,000.
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