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No minimum wage increase, urges business group

The British Chambers of Commerce (BCC) is urging the Low Pay Commission (LPC) to recommend a zero per cent increase on the National Minimum Wage (NMW).
According to the BCC, an increase would risk adding to unemployment, which it forecasts will reach three million by 2010.

David Frost, director general of the BCC, says: ‘We’re not opposed to the minimum wage going up when employment is high and the economy is doing well, but when jobs are being lost daily and a recession is in full swing, it makes no sense to increase the NMW.’
Businesses would bear the burden of an extra £300 million, if last year’s rise was repeated, the group estimates.
The LPC will make its recommendations for the NMW in March.

SMEs hit by manufacturing slump

Small businesses involved in manufacturing are being hit hard as the sector experiences its deepest downturn for 17 years.

A survey of 600 manufacturing companies by the Chartered Institute of Purchasing & Supply (CIPS) revealed that small businesses in the beleaguered sector were underperforming compared to their larger counterparts.

The CIPS Purchasing Managers’ Index, which indicates the industry is contracting if it falls below 50, showed a slight overall improvement for the month of December, with an increase of 34.3 from 32.2 in November.

However, for small businesses the figure only rose to 33.1 compared to 32.2 the previous month.

Roy Ayliffe, director of professional practice at CIPS, says: ‘While businesses of all sizes have suffered a sharp drop in levels of output, it was the smaller firms that experienced the fastest rate of contraction.’

Ayliffe adds: ‘As bigger companies are reducing their purchases to keep costs down, it is the smaller ones at the end of the supply chain which are being most affected by fewer orders.’

According to CIPS, the overall performance of manufacturing companies during 2008 was the weakest since the survey began in 1992.

Pensions 'not deciding factor'

Companies may no longer need to offer attractive pension and employee benefit packages as jobseekers do not see it as a determining factor, according to one group.

Gerwyn Davies, public policy adviser from the Chartered Institute of Personnel and Development (CIPD), says as there are not currently many jobs on the market people are now focusing on the opportunities available, rather than the whole package.

The expert states pensions and other employee benefits were more of a factor for jobseekers years ago, when there was a choice of employment on the market.

Davies says that now jobs are 'few and far between' people are accepting the best opportunity and pensions are not a 'determining factor'.

According to research from the CIPD, three-quarters of firms are planning to recruit in the next three months, compared to a figure of 81 per cent in the summer.

Fewer companies are planning redundancies than last winter, the research also suggests.

Small firms 'good for your health'

Small business owners say running their own firm is better for their health, with the majority saying it is not more stressful than being employed.

Research from Premierline Direct found 82 per cent of small firm owners do not feel more stress while half say it is less tense being your own boss.

Of the 635 adults questioned, 81 per cent say they now have a better night's sleep and half have never found work problems cause them to wake up at night.

The company owners reported other health benefits, as they drink less alcohol, feel they have a better work-life balance and a third have more leisure time to pursue hobbies.

Chris Little, managing director of Premierline Direct, says: 'It's great to hear that business owners are reaping the rewards of being their own boss.'

Recent research from Barclays Wealth found that for European entrepreneurs, the most common reason for going into business is to be your own boss and manage your own time.

Businesses shut down for long Christmas break

Half a million small businesses are closing their doors for the two-week period over Christmas, which is the highest figure since the 1990s.

Near ten per cent of the small, non-retail, businesses in the UK have closed for the full 14 days, according to research from the Federation of Small Business (FSB).

According to the organisation, it is the highest number to take a long Christmas break since the early 1990s.

Stephen Alambritis, a spokesperson for the FSB, says this year companies are motivated to shut down by the potential cost savings in electricity and fuel bills.

'Obviously small retailers won't be closing, but small manufacturers and self-employed workers such as electricians and plumbers will be downing tools,' he states.

The Daily Mail reports some firms have chosen to close their business until January 19th, sending workers home for an extended break.

Many retailers are choosing to begin their sales on Christmas Eve or Christmas Day this year, to improve takings.

Some shops will launch their traditional post-Christmas sales online to lure people into buying when shops are usually closed.

Consumer confidence is boosted

Figures from market research group GFK NOP show a rise by two points in the level of consumer confidence, reaching -33 for December.

The faith of buyers still remains low, but the organisation says the reduction in petrol prices and interest rates has gone some way to boosting the market.

The index which measures confidence in making large purchases jumped by ten points to -29, but is still 15 points lower than 2007's figures for December.

Rachael Joy from the consumer confidence team at GfK NOP says high street deals and the 2.5 per cent reduction in VAT have 'improved customer's views' as this is the second month in a row an increase in confidence has been seen.

'The crucial question for the economy is whether the improvement in this index will be translated into activity on the high street during Christmas and the January sales,' she adds.

The confidence figures come as the Office of National Statistics reports a 1.7 per cent rise in retail sales in November, compared to the same period last year.

Surprise rise in retail sales

Retail sales rose year-on-year in November as shops slashed prices.

Figures from the Office for National Statistics show sales increased by 1.7 per cent in the three months to November, compared to 2007's figures for the same period.

Sales rose by 0.3 per cent between October and November, with household goods driving the increase, seeing a 3.9 per cent rise.

Analysts were surprised by the figures as they had been expecting a 0.6 per cent drop in November.

James Knightley, an economist at ING, says: 'Early Christmas shopping could explain part of the strength, but it doesn't really tally with the weakness in consumer confidence nor the data seen in the CBI [Confederation of British Industry] and British Retail Consortium (BRC) surveys.'

Stephen Robertson, director general of the BRC, describes the figures as 'hard to explain', saying big discounting, the drop in interest rates and VAT cuts have helped to boost sales.

Office workers lie for boss

The majority of office workers have admitted to lying on behalf of their manager, with many taking the heat for a managerial mistake.

Research from HireScores, a recruitment scoring website, found 82 per cent of office workers have lied for their boss, compared to 19 per cent of retail employees and 13 per cent of manual workers.

The study of 1,322 staff also found more than half of office employees have taken the blame for their manager's error.

HireScores' managing director Lisette Howlett says: 'On the face of it, most lying within an office environment is for convenience and speed but when does a minor lie become a major.'

Employer groups welcomed plans, revealed earlier this year, indicating that sick employees may be forced to undergo lie detection tests in a move to cut absenteeism, following positive trials of the product with false benefit claimants.

High-tech voice analysis systems, created by Capita, could be used to detect the reliability of the staff member's illness claims.

Staff could be limited to 48-hour week

Small businesses may be forced to limit their employees to a 48-hour working week, after MEPs voted in favour of ending the UK's opt-out of the working time directive.

The European Union directive dictates that no member of staff should work for more than 48 hours each week and could come into force in three year's time, if approved.

Britain does not have a veto on the issue, so will campaign other Euro politicians to retain the opt-out.

The Trades Union Congress supported the move, saying it would allow Britain's hardest workers to get a better work/life balance.

However, the European Small Business Alliance (ESBA) says the development will further restrict they way people can run their company.

The organisation says it is important small business workers are able to work as hard as they want to, in order to ensure the survival of the business.

President of the ESBA Tine Sommer says: 'The European parliament's decision is a serious blow to small businesses and a further burden that small firms just don't need at this difficult time.'

Latest News | small business news and advice Mon, 05 Jan 2009 10:01:21 UTC

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