Business is booming.

Crafts cost crunch threatens centuries-old skills

Soaring energy prices, rising bills and spiralling inflation; householders all over the UK are feeling the pain of the escalating cost of living.

But spare a thought for the UK’s 150,000 craftspeople — the men and women who turn raw materials into beautiful objects that enhance the quality of life as well as the economy.

It takes energy, lots of it, to turn sand into glass, barley into beer, clay into tiles and pots, wood into wheels and metal into castings. For such enterprises there is no escape from escalating energy costs.

Yet anybody working from a workshop or any kind of business premises, as opposed to a home, lacks the protection of regulator Ofgem’s price cap.

This month’s permitted 54 per cent rise in domestic gas and electricity costs, and the threat of more in October, has made many householders very anxious. But at least there is an upper limit to the unit price that energy companies can charge. In contrast, craftspeople not currently on fixed-price deals are fully exposed to unpredictable and uncapped upswings.

These small businesses also face sharply increasing costs for their materials and for services such as shipping. Many are fearful of passing on costs through higher prices to consumers already hit by rising inflation and tax increases.

“The only thing that hasn’t gone up is our wages,” observes Cheryl Holley, who with two fellow workers in 2018 bought William Lane Foundry, Middlesbrough’s last foundry, a 150-year-old business making bespoke castings for heritage railways and other industrial restoration clients. Only their sole employee has had a pay rise.

Craven Dunnill Jackfield recently completed a contract to supply tiles for the Houses of Parliament

Materials shortage adds to woes

Adding to the pressures are materials shortages. These have been triggered by supply chain problems and shipping logjams caused by the global Covid pandemic, plus the disruption to trade caused by Brexit. War in Ukraine has made everything worse and sent prices for commodities, including metals, surging.

“It’s been a perfect storm,” says Adrian Blundell, production director at Craven Dunnill Jackfield, a producer of decorative handmade tiles founded in 1872; flooring for the Houses of Parliament was a recent contract.

You might argue that makers of what, mostly, count as luxuries rather than necessities should see work as a labour of love. But, as London-based ceramicist Caroline Couzens points out: “It’s crucial to remind people that while we love what we do, we are businesses and thus must respond to hikes in costs as any other businesses.”

There is a strong economic case too for UK plc to care about such businesses, which range from solo craftspeople to small companies, such as tilemaker Craven Dunnill Jackfield, with 25 staff in Ironbridge, Shropshire. As well as creating employment, they support skills, cultural identity and international image. This is under-appreciated at home, Blundell fears. “There’s a lack of vision and a lack of respect for the sort of skills the UK is renowned for.”

The pressures now squeezing UK crafts businesses are extreme. Martyn Young, a director of energy consultant ZTP and energy policy chair for the Federation of Small Businesses (FSB), says that in the year to February 2022, gas prices for UK business users rose on average by 250 per cent, and electricity by 145 per cent. “It’s unparalleled, this has never happened since the market was deregulated [in the 1990s],” he says.

Phill Gregson, a 39-year-old fourth-generation Lancashire wheelwright, looks back much further. He says; “My grandfather was a young lad in the second world war. He said that even with rationing they got hold of things they needed to do the job. I never heard him talk about what we’ve had in the last couple of years.”

For many craftspeople, securing essential materials, from glazes and clay to specialist woods and metals, has become an increasingly costly headache. Some manufacturing offshored from the UK in earlier decades has returned, says Blundell, but many vital materials must now be imported. For example, a glaze he ordered from a UK supplier arrived three months late because one element, from Spain, was delayed. This then held up delivery of a US customer’s bespoke tiles order.

“We are relying on an international supply chain,” says Gregson. “Fifty years ago there was more British supply. There would have been less chance of there being shortages.” This applies to energy too — what was local is now often international.

Often, these enterprises are in rural locations lacking mains gas, so many use bottled liquefied petroleum gas. Kate Jones of North Yorkshire glassblowers Gillies Jones currently pays 52p a litre, near an all-time high.

Wheelwright Gregson runs his machinery on diesel, up in the past year from 60p a litre to £1.30. A few businesses — including salt-glazed pottery maker Errington Reay and blacksmith Stewart Dives, who are both Northumberland-based — still use coal. All worry about energy prices.

Virtually all craft businesses need electricity. “We were paying £300 a month for electricity; by May we’ll be paying £900. It’s pretty staggering,” says glass blower Philip Baldwin who with his partner Monica Guggisberg runs internationally-acclaimed Baldwin Guggisberg from Presteigne in Wales.

At William Lane, a selling point to customers is rapid lead times. But with the cost of melting a pot of metal now £69, against £30 three years ago, it has asked clients to wait, so it can group orders for a melt, or charge extra.

Energy crisis hits crafts hard

While householders are generally best off not fixing energy costs at present, the lack of a price cap for business premises means craftspeople should seek to do so, Young says. But owners are advised to shop around for the best deal.

The impetus for last autumn’s rapid increase in gas prices came from low stock levels in Europe and rising demand. Instead of price falls after the winter, the Ukraine crisis has exacerbated shortages. Prices are projected to remain extremely high for the next year before dropping but are expected to stay far above 2019 levels for a long time to come.

“You won’t find a great deal,” cautions Young. But, he adds: “It will probably be cheaper than being on the deemed [default] rate.” These tariffs, applied to businesses not on fixed contracts, are some of the highest.

Glass blower Bethany Wood in her studio
Glass blower Bethany Wood is setting up a studio with her partner Elliot Walker in Stourbridge, West Midlands © Andrew Fox/FT

Glass blowers Bethany Wood and Elliot Walker, who are setting up their own studio in Stourbridge in the West Midlands, paid 3p per kilowatt hour in Hertford, their previous location. The cheapest fixed deal quote for gas in their new studio was 9p, with no exit possible; some quotes were 15p-20p. They settled on 9.4p for three years, with an £800 early exit penalty. Walker knows some glass blowers on fixed deals — for now. For them, he warns: “The crunch will come in a year or so.”

Like most UK craftspeople, he believes the next year will be very tough. “If you aren’t doing really well it’s almost impossible,” he says. The move to the new studio is a £100,000 joint investment with Dudley Council but funded mainly by Walker and Wood, aged 33 and 30. The new studio will also house Wood’s gallery business, Blowfish Glass Art. This investment is possible thanks largely to Walker’s successful appearance on Blown Away, a kind of Bake Off for glass blowers on Netflix, which won the couple £22,000 prize money, international orders, and a temporary showcase US residency.

This helped offset lost business in continental Europe. For many UK craftspeople, Brexit brought VAT and duty charges, increased delivery costs, customs delays, red tape and confusion. This means, says Walker, “Europe has been dead in the water for us.”

The glassmaking process involves heating then cooling; the couple use gas for their furnace and electricity for the cooling kilns. They have striven to make their new studio energy efficient but, Walker says, small businesses need bigger ones to go first with technology leaps, such as hydrogen use. “The industry is going to have to change the way it works.”

Investing in energy-efficient technology costs money upfront. Guy Armitage, managing director of York Handmade Brick, wants to install advanced heat exchange systems, but observes: “It doesn’t help us invest when our energy costs and taxes, labour costs and materials costs are going up.” The business, employing 27 people near York, produces 3mn bricks a year. Despite its price-fixed utility contracts, elements of its electricity bill have still risen.

Young says some deals fix unit prices but not distribution charges. Some fixes even permit energy companies to review unit prices. “Fixed is not always fixed,” he says.

While Armitage’s business is trading profitably on £2.5mn annual turnover, he worries about UK energy-intensive companies facing international competitive disadvantage due to high energy costs.

Fear of putting up prices

Faced with doubled electricity costs — an increase of £16,000-£19,000 this year — David Holliday at Norfolk craft brewer Moon Gazer Ale, which employs seven, including him and wife Rachel, has shelved recruitment plans. Craft businesses generally are currently fearful about expansion, given soaring costs, supply chain anxieties and fragile consumer confidence.

Even the general labour shortage has had an effect. Moon Gazer has recently lost three days’ production due to a lack of delivery drivers of LPG, vital for brewing. “It highlighted the vulnerability and what we’re exposed to,” says Holliday. He cannot build reserve stocks because his tank’s telemetry, linked automatically to his supplier, determines when a delivery is due.

Moon Gazer has been buffeted on all sides. The barley is Norfolk-grown, but soaring fertiliser prices have swelled barley’s cost and hops, imported from countries including the US and New Zealand, have been hit by a quadrupling of shipping costs over the past two years. His process — steeping barley in warm water, boiling the strained liquid, adding hops, then cooling it, adding yeast and keeping the temperature steady — is, he says, “very energy hungry”.

An added anxiety is that 90 per cent of Moon Gazer’s 15,000—18,000 pints a week output goes to pubs. With consumers worrying about the rising cost of living, Holliday is nervous about raising his prices. “The hospitality market is a discretionary spend,” he says.

Fear of putting up prices divides craftspeople. Some think affluent customers will not be deterred. “People who get luxury are usually fine in any crisis,” says blacksmith Stewart Dives. But glassmaker Philip Baldwin notes that among wealthy people “when it comes to negotiating the price, the DNA is deeply entrenched”.

Wheelwright Gregson, who employs an apprentice and a casual labourer, has an acute pricing problem. His wheels, made for museums, carriage driving, gypsy wagons, wedding carriages and funeral hearses, are much in demand. His large order book became a huge backlog when Covid derailed his supply chain.

First, he could not get diesel, then steel, then timber. Some customers have been happy for him to requote but, having had people wait so long, he feels he must keep to some original agreements. But two years of disruption have exploded costs. His steel has risen by 150 per cent, his top-quality US oak from £70 to £110 a cubic foot and US ash from £40 to £80. He will now barely break even, at best, on some orders. He expects this year to pay himself £10,000 “if I’m lucky”. His sawmill has propped up the wheel business, but his strategy will be to raise wheel prices to a “respectable level”. He says: “If things do ever settle down, I have a good business and there is definitely demand.”

The threat to vanishing skills

Low earnings are common among craftspeople; Craft Council research shows most earn below the national average wage. Frequently, the biggest cost component is still their own time: many price it very low.

The FSB wants the government to offer microbusinesses assistance, including help with their energy bills. Some entrepreneurs think the government must surely step in, but many are deeply sceptical about politicians and promises of jam tomorrow.

A backdrop of economic crisis has become the norm, says blacksmith Dives. “You never get to the point where, hey, the economy’s fixed now.”

Mary Lewis, endangered crafts manager for the Heritage Crafts Association, fears that for many vanishing crafts just hanging on in the UK, “It wouldn’t take much to tip them over the edge — or be offshored.”

For many in the sector, closure is almost unthinkable. Instead, the talk is of reconfiguring products to survive, for example by rebalancing glazes, reassessing use of the most expensive materials and simplifying ranges, dropping unprofitable items.

Craftspeople won’t go down without a fight for what they love; the will to carry on is huge. For Gregson, heritage is key. “When you have four generations behind you it seems wrong to let that go.”

Passion drives them on. As Holliday, a former marketing consultant who founded his real ale brewing business 10 years ago, puts it: “We dreamt of doing it and we’ve achieved that dream. I haven’t come this far to let it go.”

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