Cost of Living: Fears Leeds businesses could be lost as living standards face 'significant threats'
More than two thirds of companies in West Yorkshire are “concerned about the survival of their business”, according to research released by West Yorkshire Combined Authority (WYCA) this week.
It added that more than half of businesses spoken to were not expected to increase wages in the coming year, despite inflation being at a 40-year high.
WYCA officers said this posed a “significant threat to the quality of life”, warning low income families will also be hit by the uncertainty on whether Government will increase in and out-of-work benefits in line with inflation.
The economic update report, set to be discussed by regional politicians next week, said research commissioned by WYCA shows 67 per cent of companies are concerned about the survival of their business as a result of the cost-of-living crisis. This concern, it added, was most greatly felt among “small and micro businesses”.
Other findings from the research showed nearly half of businesses felt government energy subsidies made no difference to them, while 56 per cent of businesses said that they were not planning on increasing wages over the next six to 12 months.
The report added: “With inflation expected to remain high throughout 2023, this poses a significant threat to the quality of life in Yorkshire.”
It stated that, while the Government’s business energy relief scheme caps the unit cost of gas and electricity, it was only guaranteed to run until the end of March 2023, and that 1,751 firms in West Yorkshire that are “energy intensive”, employing roughly 57,000 people. These companies could be especially vulnerable to fluctuations in energy prices.
Wages in the region are also struggling to keep pace with inflation, with median wages increasing by seven per cent and inflation sitting above 10 per cent, while the Government has not indicated benefit levels will increase in line with inflation.
“Therefore,” the report adds, “many families will be facing real-term cuts in their household incomes (from wages and benefits). West Yorkshire has a higher percentage of people claiming out-of-work benefits compared to the national average. West Yorkshire also has a higher percentage of people claiming in-work benefits compared to the national average.”
The report will be discussed at a WYCA economic scrutiny committee meeting on Wednesday, November 16.