Firms urged to review health and safety risks

With employers' liability insurance (ELI) costs set to rise following the introduction of new legislation this autumn, small firms are being warned to urgently review their health and safety plans.

Under the new injury cost recovery regulations, in force from 1 October, the NHS will be able to claim back from employers the cost of treating staff injured on their premises through firms' insurance policies. Experts have claimed the change is likely to increase ELI costs for SMEs by up to 8%.

David Robertson, chief executive of Bibby Financial Services, said despite the warnings, firms can take measures to minimise the impact of the new regulations.

"Insurers have made it clear that they are willing to work with the business community to keep costs as low as possible, by reflecting responsible health and safety practices in their rates.

"Owners and managers who wish to minimise the impact of the regulations on their business should review their health and safety procedures as a matter of priority and work with their insurers towards a manageable solution."

Bibby advised businesses to ensure they register with the appropriate health authorities. All companies with at least one employee must do so.

Firms with workers in offices or shops must register with their local council, while factories should register with the Health and Safety Executive.

Business should also assess healthy and safety risks, Bibby said. Whether firms are an employer or work alone, they are legally required to assess workplace risks.

Bibby said carrying out a risk assessment is the first step in minimising the cost of health and safety by ensuring that the correct preventative measures are in place

In addition, companies must review their risk assessment on an annual basis and amend it when circumstances change such as when a new piece of equipment is bought. Outcomes of risk assessments and any corrective action taken should be recorded.

In case of an accident, companies must have suitable first aid facilities and under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) they are required to report serious injuries, diseases and dangerous incidents.

All businesses must also have an accident book that records the date and details of each accident, including the name of the injured person and what action was taken.

Ministers move to close bank holiday leave loophole

Employers who force workers to include bank holidays as part of their annual leave entitlement will be prevented from doing so under new government plans.

Releasing a consultation paper, the Department of Trade and Industry (DTI) said up to two million of the UK's lowest paid workers will benefit from additional holidays, particularly part-timers, women and ethnic minorities.

Currently, all employees are entitled to 20 days statutory leave but employers are allowed to force workers to include bank holidays as part of it.

The government proposes to phase in the additional leave beginning with an increase from 20 to 24 days from 1 October 2007.

In addition, ministers are seeking views on whether the rest of the leave should be introduced in one stage, from October 2008 or October 2009 or in two phases, increasing to 26 days in October 2008 and 28 days from October 2009.

Jim Fitzpatrick, employment relations minister, said: "The government intends to honour its commitment and make sure that workers have the right to take paid bank holiday leave and not have to use them as part of their twenty day holiday entitlement.

"When we gave everyone the right to four weeks annual leave in 1998, two million workers got paid holiday for the very first time. There are still many people, particularly the lowest paid, who have to take bank holidays from their leave entitlement. The government is determined to put this right and ensure they get the extra leave they deserve."

The consultation document is available at www.dti.gov.uk/employment/Holidays/index.html

SMEs reliant on cash

Thousands of UK small businesses would be forced to close if customers stopped using cash, new research reveals.

According to the study by Alliance & Leicester, 7% or 300,000 of the UK's small firms are so reliant on notes and coins they would face shutdown if customers switched to solely using credit or debit cards.

Another 17% of respondents admitted "significant changes" would have to be made if cash use was ditched, while 8% believed business growth would be stunted.

The report found hospitality and entertainment firms would be hardest hit by the demise of cash transactions with almost one in five believing they would be forced to permanently close their doors.

While many small businesses admitted to relying on cash for receiving payments, more than a third confessed it was also their own preferred way of settling bills. Only 21% said they use credit or debit cards for financial transactions.

Russell Carter, from Alliance & Leicester Commercial Bank, said: "The results of our survey highlight the important role the humble coin and note still plays for many UK businesses.

"Not only do many SMEs still say cash is their favourite payment method, many sectors in the UK rely on cash for the smooth running of their business and without cash many small businesses would be forced to close down."

HMRC job cuts on the cards

HM Revenue & Customs (HMRC) has unveiled new cost cutting plans which could see thousands of staff losing their jobs as the government department seeks to improve the service it offers businesses and individuals.

As part of the plans to drive up efficiency, several offices are also set to be closed as the Revenue attempts to save £30m by April 2008.

In a statement, HMRC said consultations on the "future shape and direction" of the department will begin next month.

"The department now has more buildings than it needs," it added. "Co-locating staff makes good business sense whilst providing the opportunity to streamline processes and eliminate duplication."

HMRC said it is on "its way to meet" its target of 12,500 "net staff savings" by April 2008.

"The creation of HMRC, where Customs and Excise and the Inland Revenue were integrated, means the new organisation now has more space than it needs,” added HMRC acting chairman Paul Gray.

"We are taking the opportunity to save taxpayers' money by operating with fewer buildings in a more co-ordinated cost efficient way. We are inviting all staff to comment on our proposals and to fully participate in our programme of change."

Trade unions however hit out at the announcement saying it means that current inefficiencies in the department will get even worse.

Mark Serwotka, general secretary of the Public and Commercial Services Union, said: "It is foolhardy in the extreme to think that cutting more jobs and closing more offices will improve service levels in HMRC.

"With a backlog of 1 million items of post already stacking up as the department slash 12,500 jobs, further cuts will damage service levels and undermine the ability of the exchequer to collect revenue, leaving HMRC unfit for purpose.

"We are growing increasingly fearful that as other departments also seek to cut their budgets by 15% over the same period that more job cuts will follow elsewhere.

"Time is running out for the government, who need to wake up to the fact that cuts mean deteriorating service levels and who need to realise that decent public services need people to deliver them."

Firms celebrate services directive

Businesses have welcomed an agreement which aims to make it easier for set up a company in the European Union.

The EU passed on Thursday the services directive which aims to better assist entrepreneurs in setting up in business anywhere in the union. Ministers claim it is worth up to £5bn to the UK economy and will create up to 135,000 new jobs.

Billed as a "landmark" decision, the directive aims to facilitate easier cross-border provision of services by instructing member states to screen out any legislation which may have a negative impact on incoming service providers, and to create 'one-stop shops' which detail all the legal formalities involved with starting up.

It also means that firms do not have to have a permanent establishment in a member state in order to be covered by the directive. They just need an appointed representative and an establishment that constitutes more than a letterbox.

Martin Smith, EU spokesman for the Forum of Private Business, said: "Smaller businesses often don't have the capacity to take the unreasonable risk of setting up a permanent office in another country, they need to test the market first.

"Unlike for goods, free trade alone is not sufficient for services as some services can only be delivered locally, and therefore need a local presence.

"Service providers also need to navigate their way through the regulatory minefield present in many member states. This directive will mean they can set up an operation in another member state without the same regulatory headaches that might have put them off in the past."

Brits 'most fearful of redundancy'

UK workers are the most pessimistic employees in the world about their future job security, new research claims.

A poll by human resources consultancy Right Management found 30% of British staff feared redundancy during the next year, the highest figure among the 18 countries surveyed and the biggest percentage increase since May 2006 when the survey was last conducted.

More than three quarters of UK workers believed they would struggle to find employment of a similar level if they lost their job compared to 71% six months ago.

Peter Coles, director at Right Management in the UK, said: "The drop may appear unusual with the UK economy remaining strong and the recruitment market relatively buoyant.

"However, the continuing restructuring of the labour market with the growth in outsourcing, particularly in the public sectors has led to increased uncertainty for many about their future job security. In addition many people feel they don't have the relevant experience for the new jobs being created.

"But workers should remember the UK economy is in a much stronger position than many of its global counterparts. Good workers are always in demand, so it's as important as ever for employers to maintain the morale of employees, and regularly review their recruitment and retention strategies to identify and hold onto the best talent."

New deadline for filing Tax Returns

The Government has accepted revised recommendations to bring forward the deadline for filing self assessment Tax Returns.

With effect from 2007/08, the deadline for filing paper Returns will be brought forward to 31 October; while the 31 January deadline for filing via the internet will remain unchanged.

Self-employed 'to lose out' under pensions changes

The self-employed are likely to miss out under the government's new pensions reforms, according a new report.

The Scottish Widows study, which examined the potential outcomes of the introduction of Personal Accounts as suggested in the government's Pension White Paper, said the self-employed will lose out because they will have no access to the State Second Pension and no employer to contribute to their pensions.

A self-employed man on median earnings might receive only £46 a week from a Personal Account in real terms, Scottish Widows said, if he contributes continuously from age 22 until retiring at age 65. In comparison, an employed man who contributes the same amount could receive £74 a week.

The report added that changes to the savings credit mean the average self-employed man will only be £12 a week better off at age 68 than if he had saved nothing at all, and just £2 a week by age 78.

Ian Naismith, from Scottish Widows, said: The position of the self-employed is a particular concern. Not only do they lose out on State Second Pensions and employer contributions, but the changes to means-tested benefits work against them and mean that much of their incentive to save for retirement is lost."

Late payment 'on the increase'

The amount owed to UK SMEs in late payments has risen by £5bn over the last two years, new research claims.

According to the study by BACS, an increasing number of SMEs are suffering late payments. Some 59% said they had experienced problems with delayed customer or supplier payments, almost double that of findings in 2004 which showed just a third experiencing the same issues.

The research also showed the total amount of money owed to UK SMEs is on the increase. Collectively, the amount of money outstanding to companies with 250 employees or less has rocketed from £11bn two years ago, to almost £16bn this year.

Michael Chambers, managing director of BACS, said "The fact that UK SMEs are waiting on £16bn is staggering and shows that the impact of late payments cannot be underestimated.

"Late payments now pose a considerable problem for more than half of all SMEs in Great Britain - if this figure continues to rise, the knock on effect for the UK economy could be disastrous.

"Business and financial managers up and down the country need to tackle late payment issues head on to safeguard the commercial interests of their organisations."

UK Inflation Woe 'Set To Worsen'

The outlook for UK inflation has "deteriorated markedly", the Bank of England governor Mervyn King has said.


Government figures on Tuesday showed that the rate of consumer inflation reached its highest level in 13 months driven by high food and fuel costs.


Mr King said inflation would probably stay above the government target of 2% for two years, hampering the economy.


He added that house prices were set to fall further, though no one could be certain how far they would decline.

'Tricky Position'


Mr King also spoke of the difficult balancing act the Bank had in juggling a slowing economy and accelerating inflation.


"The balancing act faced by the Monetary Policy Committee (MPC) is even more challenging than it was in February," he said as the Bank presented its latest quarterly inflation report.


"The MPC is facing its most difficult challenge yet. For the time being at least, the nice decade is behind us."


The state of the economy has put the Bank of England in "a tricky position, to put it mildly", says BBC business editor Robert Peston.


If the Bank keeps rates where they are, then the outlook for growth will be dismal and the UK could be tipped into recession.


If it cut rates, then its credibility as a "crusader against the wickedness of inflation" could be severely damaged, especially as it expects inflation to be well above target later this year, our business editor adds.


Consumer Squeeze


Mr King said that external factors, such as high food and fuel prices, and problems in the global financial markets and the subsequent credit crunch, were hitting the UK and would have a noticeable impact on the economy.


"The central projection is for growth to slow sharply in the near term," he said.


While he was expecting growth to rebound in 2009, there would be a squeeze on living standards for many people living in the UK.


"The credit cycle has turned, commodity prices are rising," he explained.


"We are travelling along a bumpy road as the economy rebalances. Monetary policy cannot and should not try to prevent that adjustment.


"The MPC must focus on bringing inflation back to the target in the medium term."


Eventually, the UK economy would absorb the problems and bounce back, helped by a weaker pound and easier access to financing in the global financial markets, he said.


Mr King explained that the slowdown in the economy would reflect a squeeze in real incomes, before credit conditions began to ease and the depreciation of sterling started to boost exports and reduce imports.


However, Mr King warned that that "the balance of risks to the outlook for growth is to the downside in the medium term".


Credit Crunch


Speaking about the problems in the global financial markets, Mr King said that financial organisations and banks were in the process of rethinking how they operate.


"In some ways we're only beginning to see the difficulties that have faced banks feed through now to conditions in the credit markets for companies and for households," he said. "We are reverting to a more sensible and prudent approach to lending and borrowing," he added.


A simple guide to inflation by Richard Scott

Referring to a plan that would let UK banks swap problem mortgages for some £50bn of government bonds, Mr King said it had been successful "so far, but it will take a long time before its effects feed through".


The Bank of England hopes the scheme will encourage banks to lend to each other again and also to homeowners, easing the credit crunch that has started to affect consumers and their spending patterns.


"It will take time to rebuild that sense of confidence in the banking system and during that period credit conditions will be more difficult than they would normally be," he said.


"I think the events of the last six to nine months are not ones that people will forget in a hurry."