Lancashire business group calls for action as input price inflation rockets

Responding to the Office for National Statistics figures which show producer input price inflation (the prices of goods bought by UK companies), at a record-high 18.6 per cent, and the consumer prices index at 9 per cent, FSB national chairman Martin McTague said: “The gulf between the rate of input and consumer price growth underscores business efforts to absorb costs rather than pass them on.

“Small firms in particular find it hard to pass higher operating costs onto customers, fearing that doing so will hamper competitiveness.

“More and more are being left with no choice, however, as inflationary pressure collides with an increasingly tight labour market, making it harder and harder to find the right people, and pushing up the wages needed to keep them.

“We hear a lot from politicians about the cost of living crisis, but very little about the cost of doing business crisis which underlies it.

"The Government must now look at targeted interventions. It can’t control the wholesale price of oil and gas, but it can go further to help small firms with property costs – increasing the ceiling for small business rates relief and extending the energy support issued via the council tax system to the rates system.

“Our debilitating poor payment culture worsened over the pandemic. Here we have an area where government can take action – by making audit committees directly responsible for supply chain practice – without it costing a penny.

“More widely, with so many firms lost over lockdowns, we need policymakers to come forward with the Enterprise Strategy that we were promised a long time back – clearly outlining how, now we’ve lost the New Enterprise Allowance, government intends to spur those thinking about starting up to turn vision into reality, thereby shoring up our already foundering recovery.”