Newsletter - January 2007

In this edition:

• Small business presents New Year Resolutions
• Workers 'contribute £23bn' in unpaid overtime
• Union threatens self assessment strike action
• Political changes means business uncertainty
• Business reacts to new minimum wage fines
• Climate change 'offers key business opportunities'
• Job applicants ‘making basic errors'
• Inflation hits 10-year high
• Child Trust Fund aims to tackle mothers' 'greatest money worry'
• School leaving age set to rise to 18
• Holiday entitlements set to rise

Small business presents New Year Resolutions

The Federation of Small Businesses (FSB) has presented a series of New Year Resolutions for 2007, aimed at safeguarding the UK 's small firms.

The organisation warns that unless a number of high-profile public figures use their power and influence, there will be 'struggles ahead' for small businesses. 

The FSB has applied its resolutions to party leaders, ministers, regulators and other figures. The resolutions cover issues from fair trading to local government finance, transport and skills.  

They include a call for Prime Minister Tony Blair to ensure an orderly transition of power, without affecting business confidence or the economy, and a resolution for Pensions Secretary John Hutton to make sure that new pension requirements do not bankrupt small businesses. 

Carol Undy , National Chairman of the FSB, said, 'Small businesses employ over 58% of the private sector workforce. A huge number of public figures have a major impact on these employers and their 12 million employees'. 

'To ensure that 2007 is a year in which small firms can grow, employ more people and keep their existing employees in jobs we have resolutions for many of these public figures. If they keep them 2007 with be a prosperous year for the whole country. If they don't small businesses will suffer and with them will go the UK economy.'

Top

Workers 'contribute £23bn' in unpaid overtime

UK employees are putting in unpaid overtime to the value of £23bn every year, according to a new report published by the TUC. 

The trade union has calculated that employees who do unpaid overtime contribute an average seven hours and six minutes of additional time each week – a contribution which, if paid, would be worth £4,800 based on an average UK wage.

According to the organisation, if these workers began their unpaid overtime at the beginning of the year, they would receive their first payment on 23 February.

The study revealed a small drop in the volume of unpaid overtime compared with last year, when employees worked an average seven hours and 24 minutes without pay.

However, Brendan Barber, TUC General Secretary, said, 'We work the longest hours in Europe , and too many workplaces are gripped by a long hours culture. There are some small signs that we are getting a bit better, but there is still a long way to go'.

The TUC has declared 23 February as 'Work you proper hours day', when it is urging workers to resolve to take a full lunch break and to go home on time. The organisation is also calling on employers to thank their staff for their contribution, by buying them lunch, or a coffee or cocktail after work.

Top

Union threatens self assessment strike action

One of the UK 's largest civil service unions has threatened possible strike action to coincide with the 31 January deadline for filing self assessment tax returns.

The Public and Commercial Services union (PCS) said that it is planning the action as a response to job losses, below-inflation pay offers, and outsourcing.

If the action did take place, it could affect the processing of a significant number of tax returns which are submitted at the last minute.

Mark Serwotka , General Secretary of PCS, said, 'There will be a range of very imaginative forms of industrial action. We are already planning a second wave of action, which will not be a traditional one-day strike'.

However, the Cabinet Office has warned that the civil service must change in line with public expectations and new technology.

Top

Political changes means business uncertainty

Forthcoming changes to the political landscape mean that 2007 will be a year of 'uncertainty' for business, the Confederation of British Industry (CBI) has warned.

Martin Broughton, the incoming President of the CBI, said that while the changes will offer new opportunities for businesses, the departure of Prime Minister Tony Blair and the resurgence of the Conservative party will also create uncertainty, as businesses try to plan long-term investments and strategies for the coming year.

Mr Broughton called on the Government not to derail the regulatory agenda, saying that 'the relationship between business and politicians is critical as the coming year sees legislation vital to UK competitiveness – ranging from skills to energy security and the planning system – coming before Parliament'.

The CBI President also highlighted other key issues facing UK businesses, including climate change, tax competitiveness, pensions and security.

Top

Business reacts to new minimum wage fines  

The Government has announced a clampdown on employers who fail to pay the national minimum wage to their workers, with the introduction of new fines for each affected worker.

Under existing regulations, employers who are found to have flouted the minimum wage requirement already risk prosecution, and have to pay in full any arrears in wages.

Alistair Darling, Department of Trade and Industry Secretary, said that employers who refuse to pay up within seven days could now face a fine of more than £200 for each underpaid employee.

More than 61,000 calls were made to the national minimum wage helpline between 2005 and 2006, and more than £3.2m in unpaid wages was recovered.

The adult minimum wage rates rose to £5.35 an hour in October 2006, benefiting more than a million workers.

The British Chambers of Commerce (BCC) has welcomed the announcement. BCC Director General, David Frost, said, 'Firms who flout minimum wage regulations are providing unfair competition for the vast majority of employers who do not break the law and consequently have to charge higher rates'. 

The Federation of Small Businesses (FSB) also welcomed the news, but warned that some small businesses are being hit by recent inflation-busting increases in the minimum wage.

Alan Tyrrell of the FSB said, 'While we welcome any moves to eradicate unlawful and unfair competition, this must be done without unnecessarily disadvantaging the vast majority of law-abiding small businesses'.

Top

Climate change 'offers key business opportunities'

The Trade and Industry Secretary, Alistair Darling, has highlighted climate change as potentially one of the most significant business opportunities of this century.

According to Mr Darling, 100,000 new jobs could be created over the course of the next decade, with the value of the 'green' industries rising from the current figure of £25bn to £46bn by the year 2015.

Mr Darling has called on businesses to change their approach to climate change, and to see climate change not as a threat and an expense, but rather as 'the greatest business opportunity of our age'.

'The next Bill Gates will be the entrepreneur who defines the new green industries. Just as the steam engine did for the industrial age, and the internet did for the digital age, the search is on for the new process or discovery that symbolises the post-carbon age', he said .

Top

Job applicants ‘making basic errors'

Nearly half of the CVs received by recruitment firms include spelling and grammatical mistakes, a new report has revealed.

The Recruitment and Employment Federation (REF) study found that 47% of CVs contain basic errors.

Common mistakes include incorrect use of the apostrophe, misspelling key words such as ‘curriculum vitae', ‘role' and ‘personal', and confusing common words such as ‘their' and ‘there'.

Younger applicants, in the age range of 21-25, made the most errors, and women were found to be significantly less likely to make mistakes in their applications than men.

Researchers also found that many applicants were unnecessarily detailing their personal interests and pastimes.

Marcia Roberts of REF warned that candidates run the risk of missing out on job opportunities as a result of these basic errors. ‘The findings show that jobseekers should first pay more attention to getting the basics right', she said.

Top

Inflation hits 10-year high

UK inflation jumped to a 10-year high of 3% in December, according to official figures from the Office for National Statistics.

The news sheds some light on the reasons for the Bank of England's surprise decision to raise interest rates to 5.25% in its January meeting. It also raises the prospect of further interest rate increases.

The Consumer Prices Index (CPI) is up to 3% from 2.7% in November. The Office for National Statistics claims that the largest impact on prices in December came from transport costs, which were lifted by rising petrol prices and the fuel duty increase announced in the Pre-Budget Report.

The Bank of England is tasked with keeping CPI inflation at the Government's target rate of 2%, but it has now exceeded this level for eight consecutive months. If CPI inflation rises above 3%, the Bank's governor Mervyn King will be obliged to write a letter of explanation to the Government, which would be the first such occasion since the Bank gained independence in 1997.

Top

Child Trust Fund aims to tackle mothers' 'greatest money worry'

British mothers rank their children's financial futures as their greatest 'money worry', according to figures released in The Children's Money Report.

Over 50% of the 3,483 mothers polled placed concerns about their children above those relating to their own financial security.

The report was carried out for HM Revenue & Customs (HMRC), as it seeks to raise the profile of the Child Trust Fund. The scheme is designed to encourage new parents to invest in tax-free savings for their offspring.

Parents of children born since September 2002 have been given a voucher worth £250 to invest in the Child Trust Fund. Thereafter, they are encouraged to put aside regular savings to build a sizable lump-sum for when the child reaches 18.

To date, 70.7% of all CTF vouchers issued have been used to open such funds, but the numbers taking up the offer have varied from region to region, with deprived areas showing the least take-up.

More information about the Child Trust Fund is available on the HMRC website
( www.hmrc.gov.uk/ctf/ ).

Top

School leaving age set to rise to 18

The Department for Education and Skills (DfES) has confirmed plans to raise the school leaving age in England to 18 by 2013.

Pupils will not be required to continue with academic lessons beyond the current age of 16, but they will have to continue to receive skills or workplace training should they opt to leave the classroom.

Detailed plans for funding and implementation are said to have been drawn up by the DfES, the Treasury, business representatives and prominent head teachers, with proposals expected to be published in the spring.

The proposals are designed to address the perceived problem of young people leaving education without qualifications or workplace skills. The most recent figures for England showed that 11% of 16 to 18 year olds are outside education, training or work.

Education Secretary Alan Johnson said that it was "repellent that a youngster of 16 is not getting any training".

The existing leaving age of 16 has been in place since 1972.

Top

Holiday entitlements set to rise

The Government has announced proposals to increase workers' annual holiday entitlement from 20 to 28 days.

Under the scheme, up to six million workers in the UK would benefit from an additional eight bank holidays, which are currently included as part of their 20-day annual leave entitlement.

The groups most likely to benefit include women, part-time and low-paid workers, and those from minority ethnic communities.

The Department of Trade and Industry (DTI) is proposing to increase statutory annual leave in two stages, with the entitlement rising from 20 to 24 days on 1 October 2007, and a further increase from 24 to 28 days taking effect on 1 October 2008.

The additional cost to business is expected to be around £4bn a year.

The DTI has launched a second public consultation on the implementation of the changes. Further information on the consultation can be found on the DTI website
(www.dti.gov.uk ).

Top