Business groups defend zero-hours contracts

26 Feb 2015

Both the Institute of Directors (IoD) and the Confederation of British Industry (CBI) have spoken in favour of zero-hours contracts.

Such contracts have proved controversial in recent months, with political parties in the run up to the General Election promising an outright ban, and a clamp down on exclusivity clauses which may prevent employees from working the hours they need.

However, Christian May of the IoD said: ‘For hundreds of thousands of workers and employers these contracts represent an extremely attractive proposition. A flexible labour market, of which zero-hours contracts are a vital component, has protected the UK from European levels of unemployment’.

A recent publication from the Office for National Statistics showed 697,000 people, or 2.3% of all UK workers, are on zero-hours contracts. Eurozone average unemployment levels currently stand at 11.4% while the UK is now at 5.7%.

CBI Director for Employment and Skills, Neil Carberry, said: Flexible contracts offer an important source of job creation that supports business growth and employees who need to manage different responsibilities.

‘The range of options on offer in the UK is why we are continuing to create thousands of new jobs, and have lower unemployment than many other countries.’

Business groups respond to suggested minimum wage rise

25 Feb 2015

Business groups have broadly welcomed the recommendation that the National Minimum Wage (NMW) should rise by 3% in October 2015.

In its annual review of the NMW, the Low Pay Commission (LPC) has recommended that the main adult rate should increase from £6.50 to £6.70 an hour, representing an above-inflation increase of 3%.

The recommendations from the LPC would also see the hourly rate for 18-20 year olds rising by 3.3% to £5.30, while the rate for 16-17 year olds would see a smaller increase, rising to £3.87, and the apprentice rate would increase to £2.80.

Commenting on the LPC’s report, Katja Hall, director-general of the Confederation of British Industry, said: ‘The LPC has struck a careful balance. As the economic recovery cements, the Commission has reconciled a desire to reflect this in pay packets while recognising that productivity growth – the key to sustainable pay rises – remains weak.

‘We welcome the commitment to review next year’s rise if the improved business environment doesn’t materialise.’

Meanwhile, Dr Adam Marshall, executive director of policy and external affairs at the British Chambers of Commerce, said: ‘A 3% rise will be a welcome boost to many staff, and comes at a time when firms are healthier, more confident and more able to afford an above-inflation rise’.

The TUC expressed some disappointment, arguing that recent reports of a strengthening economy would support the case for a bigger increase in wages for low paid workers.

However, the LPC warned that sharper increases in the NMW could pose a risk to jobs and increase the pressure on small businesses.

CBI figures show surprise fall in retail sales

24 Feb 2015

Retail sales in February fell compared with the same period a year ago, according to a survey by the Confederation of British Industry (CBI).

The CBI’s quarterly Distributive Trades Survey of 138 firms, including 62 retailers, showed that both volume of retail sales and orders failed to meet expectations of growth in February, following six months of ‘very buoyant’ sales.

Although sales volumes rose strongly for cultural goods and chemists, this was offset by poorer performances elsewhere, particularly among grocers and department stores.

The survey also found that employment was down on last year and – in keeping with official figures on inflation – that prices fell for the first time since May 2006.

Rain Newton-Smith, CBI Director of Economics said: ‘After a strong start to the year, retailers were disappointed by the unexpected halt in sales growth. In particular, continually heavy discounting in the grocers sector seems to be weighing on activity.

‘Looking ahead, the outlook for the retail sector is fairly positive, with the boost to household incomes from falling inflation likely to support spending. Indeed, firms remain upbeat about the businesses situation over the coming quarter.

However, as this survey shows, overall trading conditions on the high street remain challenging’.

First real wage rise predicted since 2007

23 Feb 2015

Economic forecaster the EY ITEM Club has released a report showing that UK workers are likely to see an overall increase in real wages of 1.8% this year.

GDP growth is also expected to improve, with predictions revised from 2.4% to 2.9%, continuing into 2016. Cheaper oil has been cited as a major boon for businesses that may see cheaper transport costs and also petrochemical product prices lowering. Inflation measured by the Consumer Price Index (CPI) has been predicted to average zero this year and temporarily reach negative figures in the spring.

The likelihood of improved wages has led many to consider how consumers are likely to spend their money. Ed Hudson of the EY ITEM Club referenced their Special Report on Consumer Spending, saying: ‘The expectation in that report was that the prospective winners from the relatively gradual increase in discretionary spending would be hotels, restaurants and consumer technology including smartphones’.

He added: ‘Overall, the latest forecast is encouraging news for consumer, retailers and consumer goods producers. They’ve all had a rough ride in recent years now it’s time for some payback’.

Apprenticeships focus of election campaigns

20 Feb 2015

Labour leader Ed Miliband has promised to create 80,000 new apprenticeships, should the party win the general election in May.

The proposal is to make available a high-quality apprenticeship to every school leaver who gets the necessary grades, providing level 3 qualifications or above, with each placement lasting at least two years.

Mr Miliband said: ‘It is time to match the aspirations of our young people with the high quality apprenticeships they deserve.

‘So under the next Labour government, if you get the grades at 18 you will be guaranteed an apprenticeship. This is what I mean by a better plan for working people, a better plan for Britain’.

A spokesperson for the Conservative party said that 2.1 million apprenticeships had been created since the coalition Government, with most of those going to individuals under the age of 25. They added that an average of 87,000 more young people are opting for this route to employment.

Mr Miliband continued: ‘Our plan is based on the idea that it is only when Britain’s working families succeed that Britain succeeds. Not the old idea that it is only from the top down that wealth flows’.

Employment at highest rate on record

19 Feb 2015

Recent figures released by the Office for National Statistics (ONS) show that unemployment in the UK has fallen to 5.7% of the working population.

The figures show that 103,000 more people found work in the three months to December 2014. The employment rate now stands at 73.2%, marginally higher than the pre-crisis levels recorded in 2008.

Prime Minister David Cameron welcomed the information as proof that the Government’s economic plan is working. He said: ‘I’m not saying we have solved all our problems in the British economy in the last four and a half years, but we are on our way’.

Average earnings rose to 2.1%, the ONS said, although excluding bonuses that figure drops to 1.7%.

With the economy showing signs of steady improvement and more competition in the jobs market, Chief Economist at the Institute of Directors (IoD), James Sproule, said: ‘Two-thirds of IoD members are planning pay rises at least in line with inflation over the coming months’.

Charities Digital Service launched

Feb 2015

HM Revenue & Customs (HMRC) has launched an online service which will allow charities to register for tax purposes.

Until now a charity was required to fill out a paper form, although they were able to reclaim tax online. The new service is named ‘Get recognition from HMRC for your charity’, and is expected to help the 15,500 new charities which are registered each year.

Chief digital and information officer at HMRC, Mike Dearnley, said: ‘We are completely changing the way we work with our customers – including charities. Our new digital services are straightforward, easy to use and convenient. The charities service minimises the risk of making mistakes, so applications are less likely to be returned to the organisation’.

The paper form to register as a charity, ChA1, will no longer be available. All registration must now be done online, providing all necessary details and documentation through the official website here.