Small businesses will have to deal with supply chain issues, worker shortages, and increasing inflation until 2023 at the very earliest, MPs have been told.
MPs have recently been informed that small businesses will bear the brunt of both worker shortages and supply chain problems until at least 2023.
Business leaders from a variety of sectors have spoken with the House of Commons business, energy, and industrial strategy committee about how small businesses will be significantly affected by the labour shortages and price rises, that have hit the country this year.
Ian Wright, chief executive of the Food and Drink Federation, has told MPs that, “six months ago our businesses all thought this was transitory, now every business I know expects this to last into 2023 and 2024. Every single one.”
Wright also added that along with the supply chain crisis, inflation in the food and hospitality industry has risen to a “terrifying” 14 to 18 per cent.
“I remember inflation going to 27 per cent under the Callaghan government in 1977, and I remember a lady going around Sainsbury's with stickers twice in the same hour to change the prices. We cannot go back to that.”
Rising prices would inevitably be passed on to consumers, Wright said: “If the Prime Minister is – as I know he is – serious about levelling up, inflation is a bigger scourge than almost anything because it discriminates against the poor.”
The chief executive of Make UK, Stephen Phipson, has warned that it will only be a “matter of months, probably six months, before we start seeing failures in business”, particularly among SMEs that have served large manufacturers.
Meanwhile, the Road Haulage Association (RHA), who were previously concerned by the shortage of around 100,000 drivers, have said the situation still hasn’t improved, despite the government’s efforts.
The committee learnt that around 1.4m workers in the EU are estimated to have returned home during the coronavirus pandemic, which has left the UK with staff shortages, just as free movement of labour with the EU ended due to Brexit. A further 500,000 UK-born workers have now also either retired or remained in education.
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