Local businesses ‘prepare for the worst and hope for the best’

Swindon’s businesses are bracing themselves as chancellor Rachel Reeves is set to give her Spring Statement later today.

With many businesses already affected by energy bills and wages going up from April, many fear that the Spring Statement will add to their growing list of worries.

Especially the hospitality sector is experiencing a hard hit, with the cost of living keeping many people from eating out as often as they used to.

Marcus Kittridge, owner of Baristocats café in the town centre, said: “It’s everything really. The products we buy in and then resell, energy, business rates, water costs – everything's going up. We can only pass so much of that onto our customers because everyone's got their own sort of price point in their head for a how much a cup of coffee should cost and if you go above that they disappear.

“It costs us nearly £50 an hour now in overheads just to be open, so that's why we close at 2 o'clock now. We’d have to sell 15 or 20 coffees in an hour which you can do in the morning or at lunchtime when it's busy, but people don't tend to drink too much coffee in the afternoon”.

Marcus and his wife have been running Baristocats for nine years now, but they are expecting that they will have to close the café next year when their 10-year lease runs out.

He says he has experienced a few hard times, but it feels different now.

“It seems when there was a bust historically, you would know that the good times would come along maybe in one or two years. I’m just not feeling that at the moment.

“We’re going to see significant closures in hospitality and other industries anyway and I understand that if you need to find money in the treasury, you’ve either got to cut things or you’ve got to increase taxation, and I think they’ll go the tax route.

“I’m planning for the worst and hoping for the best”.

Marcus thinks the best way to help businesses survive is by changing the way the VAT threshold works.

“The VAT thresholds has been pretty much frozen for the last eight or nine years where, historically, the VAT threshold has gone up with inflation, so it would give you a little bit of headroom in terms of managing your costs, your expenditure and your turnover.

“Now we’re in a situation, with the run-rate being nearly £50 an hour and with the VAT threshold being at £90,000 a year, even if we’re flat-out every day, the most we can make is £3,500 in a year which is ludicrous. When the threshold was £80,000 we could have made nearly £50,000 a year.

“This was a deliberate choice made by the previous government but now we’re all struggling”.

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