An award-winning manufacturing firm, Bowers & Jones, has stated that recent changes to the minimum wage have made it too expensive to employ apprentices. The company, which makes precision equipment for the steel industry, told City AM that the investment required for an apprentice, before they become productive, is "close to, if not over £100,000".
Jane Somerville, who led a management buyout of Bowers & Jones in 2020, noted that the variable cost of operating their factory has increased from £36 an hour to nearly £56 an hour since then. She attributes this rise to factors including doubled energy costs, increased labour costs due to minimum wages and inflation, and higher transport costs.
The British Chambers of Commerce has labelled the current situation a "cost of business" crisis, affecting millions of small firms. According to a new calculator from the lobby group, domestic policy decisions have led to an average 70% rise in small firms' cost bases over the last decade, with a quarter of this increase occurring since Rachel Reeves' first Budget in 2024.
Somerville suggests that government ministers need to help shoulder more of the cost to enable engineering companies to take on apprentices, which she believes would help her firm employ at least one or two.