FSB urges government to delay National Living Wage rise

downloadThe Federation of Small Businesses (FSB) has called on the government to consider whether forthcoming rises in the National Living Wage (NLW) rate may need to be delayed if the economy cannot bear the pace of change.

 

By 2020, the NLW will have risen to £8.75 per hour. The business group has suggested that any risk to the UK economy should be ‘built into the next NLW increase’, which is currently scheduled for April 2018.

 

The NLW should not rise any higher than £7.85 next year, the FSB has suggested.

The call to delay further increases comes following the FSB’s publication of new research, which revealed that 64% of small firms affected by the NLW have taken lower profits in order to meet the latest rate rise.

43% of small businesses have had to increase their wages to meet the demands of the NLW, the research also suggested.

Mike Cherry, National Chairman of the FSB, said: ‘Small employers have demonstrated their resilience in meeting the challenges set by the NLW, with many cutting their margins or even paying themselves less to pay their staff more.

‘In sectors where margins are tight, small firms are resorting to more drastic measures to cope with the NLW.

‘It’s vital that the NLW is set at a level that the economy can afford, without job losses or harming job creation. Cost pressures on small businesses are building, and with most recent economic indicators underperforming, we are now facing the reality that the NLW target may need to be delayed beyond 2020.’

Significant number of government suppliers sign up to Prompt Payment Code

32 of the government’s biggest suppliers have signed up to the Prompt Payment Code, thereby committing to pay 95% of their invoices within 60 days.

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The government estimates that small and medium-sized enterprises (SMEs) are currently owed more than £26 billion in overdue payments.

Signatories of the Prompt Payment Code promise to pay on time, without attempting to change payment terms retrospectively. The government revealed that the 32 suppliers will aim to pay within 30 days, and will work towards making this the norm.

Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), commented: ‘It is good to see the government fulfilling one of its manifesto pledges by getting big government contractors to sign up to the Prompt Payment Code.

‘What the small business community needs now is further action to give the voluntary Prompt Payment Code even greater teeth. The government should make it mandatory for all FTSE 350 businesses to sign up to the Prompt Payment Code and introduce a tough penalties regime for repeat offenders of poor payment practices.’

Government establishes new Brexit business group

The government has created a new business advisory group, comprised of five major UK business groups.

The Confederation of British Industry (CBI), the Federation of Small Businesses (FSB), the British Chambers of Commerce (BCC), the Institute of Directors (IoD) and manufacturers’ organisation the EEF make up the new business group, and their director generals will meet weekly with the Business Secretary, Greg Clark.

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During a recent parliamentary session, Mr Clark reported that he had met with businesses, business leaders, employees and investors around the UK since the Brexit vote. The new group will seek to ensure that business has more input into the Brexit negotiations.

Dr Adam Marshall, Director General of the BCC, hopes that the new business advisory group will also help to achieve a ‘business-friendly’ Brexit outcome that addresses firms’ ‘real-world needs’.

Commenting on the creation of the new business group, Mr Clark said: ‘The government is creating a new EU exit business advisory group to ensure business is not only heard, but is influential throughout the negotiations.’

Meanwhile, Stephen Martin, Director General of the IoD, stated: ‘A good Brexit outcome is one that puts the economy, jobs and prosperity right at the centre of the negotiations, so we wholeheartedly welcome the formation of this advisory group by the government.’

Queen’s Speech outlines government’s legislative agenda

The Queen has delivered her annual speech at the state opening of Parliament, in which she outlined the government’s legislative agenda.

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This year’s speech differed to speeches given in previous years: it outlined the government’s legislative plans for the next two years, as opposed to one.

Earlier in the week, the government took the decision to cancel the 2018 Queen’s Speech in order to give MPs ‘extra time to deal with Brexit laws’.

Brexit proposals granted to the UK government include the power to make any future changes to UK laws, flexibility to accommodate trade agreements with the EU and other countries, control over the import and export of goods and the ability to end the free movement of EU citizens into the UK.

Other proposals outlined in the speech include a data protection bill designed to strengthen consumers’ rights, a national insurance contributions (NICs) bill aimed at ‘making the NIC system fairer’, and a financial guidance and claims bill, which establishes a new statutory body to co-ordinate the provision of debt, money and pension guidance.

Business groups have responded to the Queen’s Speech. Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said: ‘While Brexit isn’t the top immediate priority for many businesses, firms of every size and shape want to avoid turbulence and confusion during the Brexit transition. The government’s proposed bills on trade, customs and immigration must minimise adjustment costs and maximise opportunities.’

Meanwhile, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), commented: ‘It’s good to see commitment to special support to help British businesses export to new markets around the world, which we look forward to engaging with the government on.’

Business groups call for ‘softer’ Brexit

Five business groups, including the Confederation of British Industry (CBI), the Federation of Small Businesses (FSB) and the British Chambers of Commerce (BCC), have called for the government to secure continued access to the European single market until a final Brexit deal can be struck with the EU.

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The letter to Business Secretary Greg Clark calls for the government to ‘put the economy first’, and to ‘prioritise an early agreement on guarantees for EU citizens’ already residing in the UK.

A final agreement between the UK and the EU should guarantee certain economic principles, as outlined in the letter. These include securing tariff-free goods trade between the UK and the EU, establishing a flexible system for the movement of labour and skills between the UK and the EU, and protecting the benefits of free trade agreements currently delivered through the EU.

The letter, which is also signed by the Institute of Directors (IoD) and manufacturers’ organisation the EEF, comes as Brexit Secretary David Davis enters into formal Brexit negotiations with the EU.

Commenting on the negotiations, Mr Davis said: ‘I want to reiterate at the outset of these talks that the UK will remain a committed partner and ally of our friends across the continent. And while there is a long road ahead, our destination is clear – a deep and special partnership between the UK and the EU. A deal like no other in history.’

The UK is set to leave the EU by the end of March 2019.

Business groups react to General Election result

With the 2017 General Election resulting in a Hung Parliament, the UK’s leading business groups have been giving their reactions.

The Institute of Directors (IoD) has warned that businesses have now been ‘thrown into political limbo’.

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The Confederation of British Industry (CBI) is urging politicians to form a functioning government which offers security and places the economy at the heart of its agenda.

CBI Director-General Carolyn Fairbairn said:

‘For the next government, the need and opportunity to deliver an open, competitive and fair post-Brexit economy that works for everyone across all our nations and regions has never been more important.’

Meanwhile, the Federation of Small Businesses (FSB) has called for a delay to the beginning of Brexit talks.

FSB National Chairman Mike Cherry said:

‘It is important to go into the Brexit talks from a position of strength, focused on getting the best deal possible for trade and access to workers and skills. Negotiations should be led by a government and a Prime Minister that will be in place for the duration, and so we call for a delay to the scheduled start of negotiations rather than a rush to begin in 11 days’ time. The need for a transition period now becomes even stronger, providing the time to get Brexit right.’

The British Chambers of Commerce (BCC) also emphasised the ongoing uncertainty for business communities, and echoed the FSB‘s call for a delay to Brexit negotiations.

Dr Adam Marshall, BCC Director General, said:

‘Whilst companies have for many months done their best to screen out political noise in order to focus on their own operations, this result will prove much harder for UK businesses to ignore.

‘No business would walk into a negotiation without clear objectives, an agreed starting position, and a strong negotiating team. It is hard to see how Brexit negotiations could begin without answers on these important questions.’

FSB outlines ‘urgent steps’ businesses should take to protect against cyber-attacks

In light of the recent cyber ransomware attack, the Federation of Small Businesses (FSB) is urging UK businesses to take ’urgent steps‘ to protect themselves.

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The business group is advising businesses to put cyber protection insurance in place, as well as check for updates to their computer operating systems and anti-malware software.

Firms should also ensure that they have any essential data backed up: in the event that the worst does happen, the FSB has suggested that this would ensure that data ’cannot then be held to ransom‘.

Dave Stallon, Commercial Director at the FSB, said: ’We are raising the alarm with the UK‘s 5.5 million-strong small business community. It is vital that small businesses and the self-employed prioritise this, and that they do it today.

’These businesses have limited resources, time and expertise to deal with the current and growing cyber-crime threat, but there is specific assistance available. They should follow our guidance, and do it right now.‘

The FSB is urging businesses to keep up to date on the latest cyber security advice by visiting the National Cyber Security Centre (NCSC) website: this can be accessed here.