Wages Rising and Businesses Falling

Posted on Jun 13, 2023. by NTI

With a report this morning (Tuesday 13 June) that wages grew at their fastest pace in nearly two years as workers benefited from new pay deals and a rise in the national minimum wage, it is hardly surprising the accompanying soundtrack is one of a growth in Administrations and Liquidations.

Official figures from the Office for National Statistics showed average weekly earnings, excluding bonuses, rose from 6.7 per cent to 7.2 per cent in the three months to April, ahead of economist forecasts of a jump to 6.9 per cent. We shouldn't be too surprised about economists predictably getting their forecasts wrong; they said there would be cold drizzle over the majority of the UK today and that Nadine Dorries is a lady.

To be fair, these figures are, in greater part, a reflection on the increase in national minimum and living wages in April, but it is still gloomy news for SMEs trying to keep a lid on costs and grope their way out of the tunnel of crippling energy costs and high interest charges on their loans.

It is too late for the majority of the 2,200 workers who work for Tuffnells Parcels Express who have just been laid off, following Interpath being appointed as Joint Administrators at the company. Our mate Rick Harrison, who is filling one of those roles, said that: “With deliveries suspended and with no prospect of them resuming in the immediate term, we have had to make the majority of staff redundant.” It is always the toughest part of the job. 

Tuffnells is a leading distributor of mixed freight with 33 depots across the country, but was hit hard by the impact of Covid-19, soaring cost inflation and an increasingly competitive market. Only 128 staff have been retained, while about 500 contractors will also be affected. Deliveries from transport hubs and depots to businesses, including Wickes and Evans Cycles, will be suspended until further notice.

A very similar fate has befallen the Leeds-based Meatless Farm, which makes vegan burgers, sausages, pasties and mince. Kroll is preparing to be formally appointed as Administrators and will immediately set about looking for a buyer who can understand how a sausage roll can have no meat in it. Soaring costs and disruption caused by ingredients shortages are being blamed.

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