‘Collapse’ in holiday work hitting job prospects for young, claims IPPR

A study by the Institute for Public Policy Research (IPPR) claims that a fall in summer work is harming the work experience opportunities available to young people.

The research found that the number of 16 to 17-year-olds in full time education working in the summer has almost halved compared to 20 years ago, and the number of 18 to 24-year-olds working during the summer has fallen by a fifth.

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According to the IPPR, in the late 1990s over 40% of 16 to 17-year-olds did some work while studying – for example, in Saturday jobs. Currently, however, just over 20% do so. For 18 to 24-year-olds there has been a decline of seven percentage points in just ten years.

Without work experience, the think tank claims, it is hard for young people to demonstrate the ‘soft skills’ employers are looking for, directly harming job prospects. Immediately after the recession in 2009, 23% of young people with no work experience were unemployed, compared to 14% with that experience.

Carys Roberts, Research Fellow at the IPPR, said: ‘Our analysis shows that young people want to work both in the summer and alongside studying, but often can’t.

‘Government, business, schools and universities need to work together to create opportunities for young people. This should include high-quality work experience at school, apprenticeships with qualifications attached and university-brokered paid internships for their students.’

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Services sector optimism falls, survey suggests

Optimism within the services industry has fallen significantly following the UK’s vote to leave the EU, a survey by the Confederation of British Industry (CBI) has suggested.

The CBI’s latest quarterly Service Sector Survey was conducted between 28 July and 12 August, and questioned 61 consumer services firms and 136 business and professional services firms.

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It found that the balance of firms in the consumer services sector who were optimistic about their business situation fell by -37%, constituting the fastest decline in this sub-sector since 2009.

Meanwhile, business and professional services firms reported that their business confidence had dropped by -30% – the fastest decline since 2011.

However, business volumes and profits for this sub-sector remained mostly unchanged during this quarter in comparison to the previous quarter. Additionally, consumer services companies experienced moderate growth in business volumes.

Anna Leach, Head of Economic Analysis and Surveys at the CBI, commented: ‘To shore up confidence across the economy, the Government must clearly communicate plans for negotiations to leave the EU, and demonstrate its commitment to stimulating growth and driving investment with an ambitious Autumn Statement.’

Significant surge in contactless card usage

Contactless card usage reached record levels in the first half of this year, with consumers spending over £9 billion using this method of payment.

Data from the UK Cards Association revealed that more contactless card payments were made in the first six months of 2016 than in all of 2015: 1.1 billion contactless transactions were carried out during the first half of this year, compared with 1.05 billion in the whole of last year.

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The figures also show that contactless payments now account for 18% of card spending – up from 7% a year ago.

However, cash is still the most common method of payment, according to the data.

Richard Koch, Head of Policy at the UK Cards Association, commented: ‘Contactless cards are firmly entrenched as the preferred way to pay for millions of consumers who expect to be able to use them for everyday purchases.

‘We anticipate the use of contactless cards will continue to increase, particularly as charities and transport operators outside London recognise the benefits this technology can bring.’

Manufacturing boosted by exports, CBI survey finds

Manufacturing output grew while total orders remained steadfast, according to the latest monthly Industrial Trends Survey conducted by the Confederation of British Industry (CBI).

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The survey of 505 firms found that export order books in the month to 23 August reached a two-year high, suggesting that the depreciation of sterling since the end of last year may be increasing overseas demand for British exports.

The key findings included:

  • 19% of businesses reported total orders to be above normal (compared with 18% in July), and 24% said orders were below normal, giving a balance of -5%
  • 21% of businesses reported export orders to be above normal and 27% below, resulting in a balance of -6% – the highest since August 2014 (-3%)
  • 34% of businesses reported a rise in output volumes, and 23% reported a fall, giving a rounded balance of +11%, down from +16% last month, but better than expected (+6%)
  • Output growth is expected to remain steady over the next three months, with 30% of companies expecting a rise and 19% expecting a fall, giving a balance of +11%
  • Chemical manufacturers accounted for just over half the improvement in export orders.

Anna Leach, Head of Economic Analysis and Surveys at the CBI, said: ‘It’s good to see manufacturing output growth coming in stronger than expected, and some signs that the fall in sterling is helping to bolster export orders. But the pound’s weakness is a double-edged sword, as it benefits exporters but also pushes up costs and prices.

‘Manufacturers will welcome the new Government’s focus on industrial strategy as well as the Chancellor’s recent guarantee over EU funding, which will help to provide certainty for universities and businesses investing in innovation and research and development.

‘The most significant effects of the vote to leave the EU will flow over the medium to long-term. Therefore firms need to see ambitious decisions in the Autumn Statement that will secure the UK’s economic future as changes to trade, regulation and access to skills loom on the horizon.’

Small businesses financially hurt by unfair contract terms, survey suggests

A new survey suggests that over half of small businesses have been hurt financially by unfair contract terms with suppliers, costing nearly £4 billion in the last three years.

Research by the Federation of Small Businesses (FSB) found that 52% of small businesses complained of having suffered from unfair supplier contracts.

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The main complaints were: suppliers failing to make auto-rollover clauses clear up front (24%); being tied into lengthy notice periods (22%); high early termination fees (20%) and concealing details in small print (20%).

One in ten of those affected by unfair terms claimed to have lost more than £5,000 dealing with a single problem with a supplier, while 37% had been set back by more than £1,000.

Mike Cherry, National Chairman of the FSB, said: ‘Small firms on the bad end of a deal are losing out to the tune of £1.3 billion each year. We have identified persistent problems with suppliers across sectors treating small firms unfairly. This suggests the market is failing to deliver value-for-money products and services for small business customers.

‘Small businesses don’t have the time, expertise or purchasing power to scour the market to find and negotiate the best deals. Small business owners behave in a similar way to consumers, but they don’t have the same guarantees of quality or legal redress in an unfair situation.’

Some 40% of the small businesses surveyed claimed that they felt powerless to do anything about unfair contract terms because the supplier was too important or large to challenge.

The FSB has called on the Government and regulators of energy, financial services and telecoms to ‘more routinely and explicitly focus on small business vulnerabilities’, and argues that ‘Trading Standards should also be given the power to take action against suppliers imposing unfair terms’.

Gender wage gap ‘wider for mothers’, report suggests

Women with children face a widening gender wage gap, new research from the Institute for Fiscal Studies (IFS) has suggested.

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The report, which was funded by the Joseph Rowntree Foundation, revealed that the gender wage gap for mothers widens gradually for 12 years after the birth of a first child – by which point, women receive 33% less pay per hour than men.

The IFS suggested that this widening gender wage gap may be attributed to some women working fewer hours after having a child, which means that they could be more likely to miss out on pay rises and promotions.

The data also revealed that, on average, women currently earn 18% less per hour than men. This figure is down from 23% in 2003 and 28% in 1993.

Robert Joyce, Associate Director at the IFS and an author of the report, stated: ‘Women in jobs involving fewer hours of work have particularly low wages, and this is because of poor pay progression, not because they take an immediate pay cut when switching away from full-time work.

‘Understanding that lack of progression is going to be crucial to making progress in reducing the gender wage gap.’

Government unveils proposals for Apprenticeship Levy and incentives

The Government has announced detailed proposals for how the new funding arrangements for apprenticeships will work under a reformed system, including additional financial support for firms that are small enough to be exempt from the Apprenticeship Levy.

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Under the plans, employers that are too small to pay the levy – around 98% of employers in England – will have 90% of the costs of training paid for by the Government.

Extra support – worth £2,000 per trainee – will also be available for employers and training providers that take on 16 to 18-year-old apprentices or young care leavers. Employers with fewer than 50 employees will also have 100% of training costs paid for by the Government if they take on these apprentices.

Apprenticeships and Skills Minister, Robert Halfon, said: ‘The Apprenticeship Levy will help create millions of opportunities for individuals and employers. This will give our young people the chance they deserve in life and to build a highly-skilled future workforce that the UK needs.’

The proposals also include plans to:

  • allow employers to use levy funds to retrain workers in new skills, even if they have prior qualifications
  • allow levy-paying employers – those with a pay bill of over £3 million that want to spend more on training than is in their digital account – to also benefit from Government support, with 90% of their additional apprenticeship training costs being funded
  • enable employers to determine exactly what training their apprentices receive and what provider they receive it from
  • introduce a new register of training providers from April 2017 to improve the link between training providers and employers.

The proposals come very soon after the Federation of Small Businesses (FSB) released a report showing that small businesses could ‘double’ the number of apprentices they take on, given the right funding and incentives.

Mike Cherry, National Chairman of the FSB, said: ‘This announcement sends a clear signal that Ministers are listening to our members’ concerns.

‘Getting apprenticeship reform right, including changes to existing funding arrangements, is key to apprenticeship growth among small businesses and the Government achieving its target of three million new apprenticeships over the course of this Parliament.’

However, others have called for the introduction of the levy to be delayed. Carolyn Fairbairn, Director-General of the Confederation of British Industry (CBI), stated: ‘Though business understands the fiscal challenges, it would be a great mistake to rush ahead before a viable scheme is ready.’

The Government is inviting feedback on the proposals until 5 September. The Scottish Government is also running a consultation on the best use of the Apprenticeship Levy in Scotland, which closes on 26 August.