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As 2025 unfolds, the impact of the budget and other measures intended to champion worker protections is becoming acutely apparent for Cornish businesses, writes Alex Duff.
Although measures that mandate for an increased Living Wage, the abolition of zero-hour contracts, and first-day employee entitlements like sick pay are commendable, they also bring significant financial implications, especially for businesses in the people-dependent sectors crucial to the Duchy’s seasonal hospitality and retail industries.
Tom Howe and Alex Duff of CHAOS Radio spoke with John Brown, CEO of Cornwall Chamber of Commerce, and Tanya Williams, proprietor of the 16th Century Polgooth Inn, near St Austell. They explored whether the government’s recent budget changes will prove to be courageous or calamitous for employers and employees alike in Cornwall.
The cost of doing business
“We were being prepped for a budget that would encourage growth, but what we got really is a budget that encourages staying small—not giving that extra pay rise, not hiring that extra person for fear of rising business costs,” says John.
“I’m hearing eyewatering figures from organisations—hundreds and hundreds of thousands of pounds extra on their bills. That won’t be felt by customers, because businesses can no longer pass down those costs. Instead, workers are going to suffer.”
A disconnected government?
“I don’t think this government has done a good job at understanding Cornish business. Cornwall has an extraordinary amount to offer this economy – hospitality, agriculture, and retail are the cornerstones of our industry that we excel in – and to not even have a cursory mention of this in the budget highlights a government that is detached from the Cornish reality,” John adds.
“There isn’t a single business owner I know who doesn’t want to pay their staff well. They all want to ensure their team is well rewarded. But with the rise in employer national insurance contributions, the increased minimum wage, and all these other factors adding to the cost of doing business, it’s an awful lot for businesses to stomach.”
The view from the ground
Tanya, who has spent the last 15 years running the Polgooth Inn, which employs 45 mainly part-time staff, is facing tough financial challenges.
“The impact of this budget is going to be quite catastrophic for small businesses like mine as we are still trying to rebuild from COVID,” explains Tanya.
“The increase to the living wage alone will add about £4,600 a month to my wage bill,” explains Tanya. And that’s in addition to her added monthly national insurance bill, which is also rising thousands. This all must come straight off her pub’s bottom line, which means she’s unable to reinvest in rebuilding the business or offering more hours to staff.
“It’s like the Government wants to get rid of pubs,” Tanya reflects, echoing the sentiments of many in the hospitality sector who feel the budget is a tax on businesses reliant on employing people. “You can’t run a pub or a restaurant without people. We don’t have the option for self-service. People come here to be cared for, and that requires staff.”
Under Tanya’s management, the Polgooth Inn has won multiple national awards and serves up much more than food, drink, and employment opportunities; it’s a community hub.
“In addition to having raised more than £10k for local charities, we organise craft and community days, and the pub acts as a meeting space for local clubs like Polgooth’s Garden Club,” says Tanya.
While she acknowledges the government’s ambition to support employees, she feels they are missing the larger picture. “All these measures mean I will have to limit my staff and control my business in a very different manner to make it sustainable.”
Moving forward
So, what can be done? John’s advice is clear: “Don’t get disheartened.” He highlights the importance of engaging in consultations that call for input from businesses and citizens alike. “The worst thing you can be is apathetic and completely silent… now is the time to work with your politicians and Chambers as a unified voice to really highlight what needs to be done to support Cornish business so that our voice is heard and we get the investment we deserve as a Duchy.”
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