Newsletter - November 2007

In this edition:

• Government to review flexible working
• Darling defends strength of UK economy
• FSB ‘disappointed' with Competition Commission report
• Online spending reaches record high
• HIPs blamed for ‘decline' in homes for sale
• Report shows gender pay gap is ‘widening'
• 25 million records lost in data security breach
• Business groups welcome new training scheme
• FPB welcomes delay to Companies Act
• New rules to guarantee cheque payment
• HIPs to be required for all properties
• Businesses face ‘severe' penalties for illegal workers

Government to review flexible working

The Government is to consider extending flexible working rights for parents of older children, it has been revealed.

Under current legislation parents have the right to request flexible working if their children are under six years of age, or are disabled.

In yesterday's Queen's Speech, the Government promised to launch an independent review into the matter to ‘help people achieve a better balance between work and family life'.

The announcement has been welcomed by the Trades Union Congress (TUC). Commenting on the announcement, Brendan Barber, TUC general secretary, said:

‘For most parents, the right to request ceases to exist the minute their child turns six, yet parents of school age children are perhaps those most likely to need a degree of flexibility from their employers.'

‘Being able to work flexibly would be a real bonus to parents with children at schools that have no breakfast or after school clubs, and others would jump at the chance to alter their hours so that they can spend more time with their children during school holidays,' he added.

The review will be conducted by Sainsbury's human resources director, Imelda Walsh, who is due to report back in Spring next year. A formal consultation will then follow

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Darling defends strength of UK economy

Alistair Darling has defended the strength of the UK economy, despite admitting that major banks are set to see a sharp decline in profits.

The Chancellor was speaking in the wake of the resignation of Citigroup boss Charles Prince, after it was revealed that the bank has suffered losses of more that £8bn in the recent credit crisis.

Talking to BBC Radio Four, Mr Darling said he expected banks to lend more ‘cautiously' but insisted that the UK economy is strong enough to withstand the pressures thrust upon it.

‘We need to get to a far better situation where there is a great deal more transparency, more openness, so people understand the risks to which these banks have become exposed and they can avoid being so exposed in the future,' he said.

‘Despite this international uncertainty, which started from the problems in the US housing market, there are grounds for believing that we will get through this,' he continued.

‘We have a strong economy [and] its momentum will carry us through.'

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FSB ‘disappointed' with Competition Commission report

The Federation of Small Businesses (FSB) has spoken out against the Competition Commission's findings into the grocery sector, claiming the regulator has ‘failed to acknowledge the adverse impact of the supermarkets on independent retailers.'

The Commission's report found that there was not a large enough variety of retailers in certain locations, but stated that in most areas the grocery market was delivering ‘a good deal for consumers.'

However, the FSB has reacted unfavourably to the Commission's conclusion, arguing that supermarkets have ‘been let off the hook.'

Clive Davenport, FSB Trade and Industry Chairman, said: ‘The Competition Commission's report seems to recognise problems such as below-cost selling and the shoddy treatment of suppliers, but claims that small independent retailers are not affected. This is absurd.'

‘The specialist retailers and independent stores that offer consumers real alternatives are suffering from the anti-competitive practices of the supermarkets. The Competition Commission's latest report does nothing to address this,' he added.

The Commission's final recommendations are expected to be published in April next year. Supermarkets will have the opportunity to respond to its findings before this date.

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Online spending reaches record high

Online spending in the UK is expected to reach a new £40bn high this year, according to a recent study.

Comparison website uswitch.com is predicting this figure will quadruple to £162bn by 2020, when internet shopping will make up 40% of retail sales.

Cheaper broadband deals and faster internet connection speeds are thought to have fuelled the online spending boom. Over three quarters of British homes are now believed to have broadband internet.

Commenting on the findings, Steve Weller, head of communications and services at Uswitch , said: ‘Not only does shopping online save you time and money, but it can actually pay for itself.

‘Each household can save £500, which pays for your annual broadband cost nearly three times over.'

Meanwhile, Forrester Research has forecast that online Christmas shopping will climb to £13.8bn this year, a 42% increase on 2006.

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HIPs blamed for ‘decline' in homes for sale

Home Information Packs ( HIPs ) are leading to fewer properties coming onto the housing market, estate agents have warned.

According to the National Association of Estate Agents (NAEA), the number of homes for sale with three or more bedrooms is down by over 10% when compared with figures collated at the same time last year

All homeowners in England and Wales who wish to sell a property with three or more bedrooms have been required to produce a HIP since September this year.

‘These figures show that there is an anomaly between instructions on properties where a HIP is required and where one is not,' said Peter Bolton King, chief executive of the NAEA.

‘With sales slowing and normally a traditional Autumn bulge in instructions, it would be normal to expect stock levels to be significantly higher.

‘This once again appears to show the adverse effect HIPs are having on the market, the lives of consumers and indeed the overall economy,' he added.

However, the Government has rejected the NAEA's claims and reaffirmed its confidence that the packs with benefit homebuyers.

‘All serious commentators recognise that it is wider issues, such as interest rates and other economic facts, that are impacting on the housing market, ' said a spokesman for the Department of Communities and Local Government.

‘HIPs are providing more early information into the market for consumers - that is a good thing'

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Report shows gender pay gap is ‘widening'

The pay gap between male and female directors has widened, according to a recent report.

In a survey of 3,945 jobs, the Institute of Directors ( IoD ) discovered that, on average, women are paid 22% less than their male counterparts. This compares to a 19% pay difference last year.

The study found the biggest gap to be in the service and voluntary sectors, where women are paid up to 26% below that of their male equivalents. This disparity equates to an average salary of £56,933 for a female director and £70,657 for a man.

The public sector had the smallest pay gap of 5%.

The IoD has expressed disappointment over the new figures, which impede the progress for gender equality in the workplace.

Commenting on the findings, Miles Templeman , IoD director general, said: ‘It is extremely disappointing that this year the survey shows that the gender pay gap is 22%.'

‘Unless we can achieve equality of opportunity in the near future, we will inevitably face further regulation in this area,' he added.

‘The only way to rebut this is for business to act quickly. It is wholly unacceptable in this day and age that it appears that women in comparable positions do not receive the same rewards as their male counterparts.'

However, statistics from the Office for National Statistics reveal that the gender pay gap for the working population as a whole has fallen from 17.5% to 17.2%.

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25 million records lost in data security breach

Two computer discs containing the personal details of around 25 million people have been lost in the post by HM Revenue and Customs, Alistair Darling has told MPs.

The Chancellor revealed details of the security breach in an emergency statement to the House of Commons yesterday, following the resignation of HMRC chairman Paul Gray.

The discs, which contain the name, address, date of birth, National Insurance number and, in some cases, bank details, of all UK families claiming Child Benefit, were mailed in the internal post by a junior official at HMRC on 18 October.

Mr Darling described the error as an ‘extremely serious failure on the part of HMRC to protect sensitive data entrusted to it' and has apologised ‘unreservedly'.

The Chancellor went on to add that the police have no reason to believe the data ‘has found its way into the wrong hands' and that there is no evidence to suggest the information ‘has been used for fraudulent purposes or criminal activity.'

Banks across the country are now monitoring those accounts affected by the security breach, while the Government has called for people to remain alert for any ‘unusual activity'.

Following the announcement, Shadow Chancellor George Osborne accused ministers of failing in their duty to protect people.

‘Half the country will be very anxious about the safety of their family and the security and the whole country will be wondering how on earth the Government allowed this to happen,' he said.

Meanwhile, the Acting Leader of the Liberal Democrats has questioned the method used by HMRC to store data and has called for CD data transmission to be replaced with a more modern system.

The Independent Police Complaints Commission is investigating the security breach.

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Business groups welcome new training scheme

Business groups have welcomed Government plans to create 7.5 million training places to help boost the skills of British workers and reduce the need to recruit skilled migrants.

Last week skills secretary John Denham announced that 150,000 new apprenticeship places will be made available under the programme by 2011, 30,000 of which will be aimed at adults over the age of 25.

Mr Denham said the move emphasised the Government's ‘drive to put Britain in the premier league for skills,' and declared that the new scheme would ‘help ensure the future economic competitiveness of the country.'

Commenting on the proposals Brendan Barber, General Secretary of the Trades Union Congress, said: ‘We welcome the Government's ambitious plan to raise skill levels across the UK by expanding Apprenticeships and the Train to Gain programme .

‘Increasing investment in skills will support economic growth and productivity, help employees to progress at work and provide more sustainable employment opportunities for those seeking work.'

Meanwhile, the British Chambers of Commerce (BCC) has also praised the initiative, but warned that the scheme may only be ‘half the solution' to getting more people back into work.

‘Unless the welfare system is reformed to give an incentive to the young unemployed to enter the world of work, then any attempt to get people back into employment won't work and companies will continue to employ migrant workers,' said David Frost, BCC director general.

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FPB welcomes delay to Companies Act

The Forum of Private Business (FPB) has welcomed the Government's decision to postpone the implementation of next stage of the Companies Act until 2009.

Matt Hardman, the FPB's campaigns manager, said the delay will help firms by giving them more time to fully comply with the new legislation.

In a letter addressed to the Government Mr Hardman wrote: ‘The process of turning legislation into regulation is often rushed and, as a consequence, the cost in terms of compliance, for smaller businesses in particular, can be severe.'

‘The FPB will now have more time to brief its members on the changes coming into force and will be able to signpost them to the appropriate guidance,' he continued.

‘We see this as a positive step towards the Government listening to, and taking on board, the needs of smaller businesses.'

The decision to postpone the implementation of the Act from 2008 to the following year was announced in Parliament earlier this month.

In a statement to the House of Commons Steven Timms MP said the ‘Government recognised that businesses need certainty about the timetable for implementation.'

He also confirmed that the delay will include ‘ provisions relating to company formation, share capital, company and business names, and directors' residential addresses.'

A limited number of changes may still go ahead as planned on 1 October 2008.

Please contact us for more information on the Companies Act and how it may affect your business.

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New rules to guarantee cheque payment

Cheques paid into bank accounts will guarantee payment even if they later bounce, under new rules that come into effect from the end of the month.

From 30 November banks will no longer be able to recover money paid into an account using a cheque that later proves to be fraudulent. Cheques will now definitely clear within six days of being paid in.

The changes are just part of the banking industry's efforts to clarify the cheque clearing system following pressure from the Office of Fair Trading.

The maximum time for banks to credit cheque payments has also been confirmed - interest will be credited no more than two days after paying in a cheque , while the money can be drawn out after no more than four days.

‘The big change concerns certainty of funds,' said a spokeswoman for the banking organisation Apacs .

‘It's only in the last few years that it has become an issue due to organised gangs getting into cheque fraud.'

While cheque fraud fell from £46m in 2004 to £31m last year, it remains a problem for some businesses, namely those that hand over products before cheque payment is finalised.

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HIPs to be required for all properties

Home Information Packs ( HIPs ) will be required for all properties sold from 14 December 2007, the Government has revealed.

Since September, all homes with three or more bedrooms have been required to purchase a HIP before selling their property.

The packs, which include an Energy Performance Certificate (EPC), grade homes on a scale of A - G according to their energy efficiency, information that the Government says will benefit consumers.

The announcement follows the unveiling of a new Green Homes Service by the Prime Minister. Properties given a poor EPC rating will receive additional support from the new service.

Commenting on the decision to roll-out HIPs , Housing Minister Yvette Cooper said: ‘ HIPs and EPCs are already helping consumers to save hundreds of pounds off their fuel bills and are cutting search costs too.'

However, the packs have proved somewhat controversial, with housing experts claiming that the introduction of HIPs has led to a decline in the number of properties coming onto the market.

Criticising the Government's latest announcement, a spokesman for the Royal Institution of Chartered Surveyors (RICS) said: ‘Rolling HIPs out to one and two-bed properties could find first-time buyers caught between a rock and a hard place as accessibility to the market would go off the scale.'

‘If the Housing Minister genuinely wants to improve the plight of first-time buyers, she should not continue with this flawed policy,' he added.

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Businesses face ‘severe' penalties for illegal workers

New penalties for businesses that employ illegal migrant workers have been announced by the Government.

Under new measures outlined by the Home Office, employers who negligently hire illegal workers could incur a fine of up to £10,000, while businesses that knowingly take on illegal migrants could face an unlimited fine and imprisonment.

The new penalties, which are part of a series of changes aimed at tightening illegal working and immigration control, will take effect from next February.

An Australian-style points system will also be introduced during the next 12 months to restrict migrant workers to those with skills that will benefit the UK economy.

Outlining the new measures, Home Secretary Jacqui Smith said: ‘The new civil penalties are a more effective way of dealing with employers who use slipshod or exploitative recruitment methods.

‘By working together with employers and others we have developed a system that delivers the migrants the UK needs, but which also keeps out those that it does not.'

Meanwhile, Chris Gillespie, HR Director of NCP Services urged businesses not to neglect their responsibility.

‘Illegal working cannot be tackled by the Government alone and it's every employer's duty to ensure that they conduct the proper checks on prospective employees,' he said.

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