In the shadow of Piccadilly Station business owners are wary about their future

In the shadow of Piccadilly station, dozens of people work at some of the city’s most unique businesses. Craft brewers, vintage retailers and specialist food stockists are among those based in the industrial pocket of central Manchester.

Several independent firms have made their home on Piccadilly Trading Estate and the surrounding streets. They are among the businesses which will feel an extra strain when the measures announced in the recent Budget come into effect.

Warnings have already been sounded about the potential impact that increases to minimum wage and employer national insurance contributions could have on firms and the jobs market. But among the independent businesses tucked behind Piccadilly, opinions are mixed.

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The racks at Vintage Folk are a real treasure trove. The company sells pre-loved clothing online and at pop-up thrift markets across the country, while on the final weekend of the month, the warehouse doors open up for customers to browse and buy direct.

Many of the company’s staff are young workers who fall into the minimum wage bracket. “I want the minimum wage to increase – I would rather pay people more,” said co-owner Jenny Keates.

“But I don’t want that to be at a cost to the business, it needs to be balanced somewhere else.” The business has taken on another unit at Piccadilly Trading Estate and has been looking to expand.

But hopes of growing the workforce could now be on hold, following the Budget. From April 2025, the rate of national insurance employers pay will rise from 13.8 per cent to 15 per cent, while the threshold at which they start paying the tax will be cut from £9,100 to £5,000 per year – although 865,000 of the country’s smallest employers will benefit from the employment allowance doubling from £5,000 to £10,000.

Vintage Folk will be stung by the national insurance hike, while it will also see a 6.7 per cent increase in the minimum wage, while workers aged 18 to 20 will see their minimum wage go up by 16.3 per cent. Jenny said: “It just means that we are probably going to have to freeze hiring, which is a shame.

“It feels like, for small business, we are in this situation where we are working people as well as business owners. It feels like we are being punished for being business owners. I would like to hire as many people as we can, but we’re in a situation where I don’t think we can, or at least not to the extent that we would have done.

“As a smaller business I feel there should be more incentive to hire. We’re quite a young workforce, most of our staff. I just think it would be nice to have some help – whether it’s a grant, or a bit of help with national insurance.

“We have people who have not chosen to go to university, but want to start a career in sustainability. It feels we’re being penalised, not helped.”

The pay hike will also affect those earning more than minimum wage at Vintage Folk – as the business ‘can’t just put up lower paid staff wages’ without increasing others. The measures come after a turbulent few years, with the cost of living spiralling in the UK.

It has affected Vintage Folk’s largely young customer base – and Jenny is determined not to pass the extra cost on. “We’ve seen with the cost of living, turnover is down this year,” she said.

“We keep our prices really low, we can’t put our prices up because it’s aimed at students, we wouldn’t want to do that. We are getting as many people through the door as before, but the average sale price is lower. We’re not getting the same cash into the business.”

In the hospitality sector, customers have already seen rising prices in the last couple of years. The cost of meals has risen in many restaurants and takeaways, as businesses grapple with the rising cost of food and energy.

Italian food warehouse Amato Food Products Ltd supplies many hospitality businesses across Greater Manchester. “Prices will have to go up,” co-founder Bob Amato said.

“It means we’ll have to increase our prices, not just to cover wages but also national insurance contributions. I think the general public are quite wary – people are cost-conscious.

“I go out to eat in restaurants, I find the prices can be quite high. I’ve eaten out recently and been astounded by how expensive it can be – but I get it, I get why. A lot of our customers are looking at ways to save, to keep prices low, so they don’t have to put them up.”

The hospitality sector has been vocal in its opposition to the national insurance rise in recent days. It’s a change which comes at a time the sector has already been facing difficulty, with closures across the country following the pandemic and the rising cost of living.

“A lot of restaurants are closing, they are struggling,” said Bob. “Everyone is going to see it through to Christmas, but it’s January, February [which will be tough]. A lot of places do offers – people will still go out, but they won’t go out as often, or they will restrict what they are eating and how much they are drinking.”

When chancellor Rachel Reeves unveiled her Budget last month, she spoke of the ‘difficult decisions’ she had faced. She insisted the choices made would help to drive investment and support public services – while also plugging a ‘£22 billion black hole’.

Bob says small businesses have been ‘caught up’ – but the government has been dealt a difficult hand. “Do we boost the economy by not paying nurses, by not paying lower paid workers more?” he said.

“We have to do that, but the money has to come from somewhere. What do we want? Do we want people to be well-paid or still have them on strike?”

Paul Jones shares Bob’s outlook. He’s the managing director of Cloudwater Brew Co, which has a major presence on the Piccadilly Trading Estate. The firm launched in 2015 and has grown to become one of the country’s best loved craft brewers.

It takes up several units on the estate – with a brewery, a taproom, a barrel store, a cold store and a head office. Paul says the Budget measures will ‘no doubt’ put costs up for Cloudwater – and the 1.7 per cent drop on draft duty is ‘not going to make up for it’.

But he is more focused on the bigger picture. “Our economy has become very unattractive to a new generation of younger people,” said Paul.

“I want the Budget to achieve the feat of making this country somewhere that people want to stay, want to work and want to move to. If that’s what it achieves, then I don’t care what the Budget costs. If we don’t stem the flow of people going elsewhere in the world, to places with better infrastructure, that’s a much bigger problem than a short-term margin loss.

“It’s a national Budget, it’s not for a single business. It has to be for a longer term perspective… that’s what you do in government. You try and take decisions that lead us in a direction to be competitive in the decades to come. I hope the short-term pain leads to a greater sense of optimism and buoyancy as people show they are willing to stick to this country for the long term.”

Paul says that craft beer businesses like his already some of the most taxed ‘cottage industry’ firms across the world, and the national insurance hike will only increase that burden. But he is hopeful the Budget could be a step in the right direction for the country after a difficult few years.

“I think overall, recovery has felt patchy in the last few years,” he added. “We’ve definitely felt as though we’ve been blown around left, right and centre.

“If you step back – what’s the stock market saying, the Bank of England, what are the majority of global lenders doing? None of them seem to have referenced anything other than at worst neutrality, if not optimism.”

As she announced the Budget on October 30, Ms Reeves said the ‘difficult decisions on tax’ meant the Treasury could ‘stabilise and support our public services’ – including a £22.6 billion increase in day-to-day health spending. She added: “This is a moment of fundamental choice for Britain.

“I have made my choices. The responsible choices: to restore stability to our country, to protect working people, more teachers in our schools, more appointments in our NHS, more homes being built, fixing the foundations of our economy, investing in our future, delivering change, rebuilding Britain.”

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