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Employers voice support for pension auto-enrolment
NewsMaster Bulletin - 1 September 2010
More than half of employers have given their backing to Government plans for automatic enrolment into a workplace pension scheme, a new report has revealed.
According to a study by the Department of Work and Pensions (DWP), 56% of employers and 64% of staff support the proposals, which will come into effect from 2012.
The report also found that some seven million Britons are not saving enough for their retirement. However, it is hoped that automatically enrolling eligible workers into a pension scheme will encourage more people to set aside funds for their future.
While 94% of employers contributing at least 3% to a pension scheme said they will maintain or increase levels for existing members, 81% said they plan to offer existing contribution levels or higher to non-members and new employees.
‘With only around half of employees saving into a workplace pension, our planned reforms are needed to prevent millions of Britons facing a penny-pinching retirement,’ said DWP minister Lord Freud.
‘It is encouraging that, despite the recession, the majority of employers are still in favour of pension savings. We will work with business and the industry to make automatic enrolment work, so we can give millions more people the chance to save, and an independent review team is currently looking at how we get the details right’.
Workplace parking scheme comes under fire
NewsMaster Bulletin - 1 September 2010
Government plans to introduce a workplace parking levy (WPL) have been criticised by the Forum of Private Business (FPB), which claims the charge amounts to a ‘stealth tax’.
According to recent reports, the Government is expected to impose a £250 levy on firms with 11 or more parking spaces. The charge, which is payable on each space, could rise to £350 over the next two years.
Nottingham City Council will be the first council to implement the scheme, effective from 2012. Other councils reportedly considering the initiative include Bristol, York, Devon, Hampshire, Leeds, Bournemouth, South Somerset and Wiltshire.
While ministers hope the levy will ease traffic congestion, the FPB has warned that the measure will have a ‘disproportionate impact on small businesses’.
‘It’s the equivalent of charging home owners to park on their own driveways and will increase parking problems in town centres and cities,’ said the FPB’s spokesman, Chris Gorman.
He added: ‘Businesses already contribute enormous amounts to public services through existing taxes such as business rates. Whatever its supposed justifications, the danger is that the WPL could open the floodgates to a raft of new taxes and charges being levied onto companies to pay for things which were previously paid for through general taxation’.
However, Stephen Joseph, the executive director of the Campaign for Better Transport, welcomed the move. ‘We support any move on a workplace parking levy, but it needs to be part of a broader strategy with the money linked to alternatives to the car, such as in Nottingham where the money is going into a local tram scheme,’ he said.
Details of national insurance ‘holiday’ unveiled
NewsMaster Bulletin - 1 September 2010
Details of a new regional national insurance holiday for start-up businesses have been published by HM Revenue and Customs (HMRC).
Under the scheme, new businesses in targeted areas of the UK will not have to pay the first £5,000 of Class 1 employer NICs due in the first year of employment.
First announced by George Osborne in the Emergency Budget, the holiday will apply for each of the first 10 employees hired in the first year of business.
Businesses that have set up since 22 June (the date of the Emergency Budget) will be able to claim for the scheme for 12 months from 6 September 2010 until it ends on 5 September 2013.
However, start-up firms in Greater London, the South East and Eastern region of the UK will not be eligible for the tax break.
The Government said it hopes the move will boost enterprise in those areas most dependent on public sector employment and support the ‘transition to a new, sustainable model of economic growth’.
For more information on the national insurance holiday, click here.
Pensioners and families ‘hit hardest by Budget measures’
NewsMaster Bulletin - 25 August 2010
The Chancellor’s Emergency Budget has hit pensioners and low income families the hardest, a leading economic think tank has claimed.
In a new report, the Institute for Fiscal Studies (IFS) argues that these two groups are set to lose the most in cash terms as a result of sweeping changes to the benefits system and the forthcoming increase in VAT.
According to their findings, George Osborne's tax and benefit reforms between June 2010 and April 2014 will cost the poorest 10% of households £422.83.
‘The biggest losers from the Budget are low income households of working age, while better off working age households without children lose the least,’ the analysis states.
‘Low income pensioners are less affected than other poor groups from welfare cuts, but richer pensioners lose more than richer households of working age as they do not benefit from the increased [income tax] allowance’.
The IFS concluded its report by asserting that the changes were ‘clearly regressive’.
However the Treasury said the Government ‘does not accept’ the IFS analysis.
‘It is selective, ignoring the pro-growth and employment effects of Budget measures - such as helping households move from benefits into work, and reductions in corporation tax,’ a spokesperson said.
Small business confidence is ‘on the turn’
NewsMaster Bulletin - 25 August 2010
Business confidence is at its highest level since 2007, according to a new report.
A survey of 2,300 companies by Lloyds TSB suggested that small firms are predicting rising sales and profits, driven by the promise of growing exports as a result of a ‘rebound’ in world demand for goods and a sustained fall in the pound.
John Maltby, managing director of Lloyds TSB Commercial, said: ‘Business confidence is on the turn. After such dramatic lows, this revival is a real sign that businesses are genuinely hopeful for the future, and it is clear that many firms now see better sales and profitability on the horizon.’
However, he warned that it was ‘a confidence tinged with caution.’ The survey showed that the biggest worry among smaller firms was falling domestic demand.
"Concerns about home-grown demand are unsurprisingly weighing on the minds of business owners whose success depends on domestic markets," said Maltby. "As long as businesses harbour doubts about the economic climate, they will hold back on investment spend and, while there's enough momentum behind the recovery to prevent it faltering, it is likely to be a long haul.’
Britons withdraw '£60bn from savings pot’
NewsMaster Bulletin - 25 August 2010
An increasing number of Britons are digging into their savings to cover shortfalls in their income, new research suggests.
According to a survey by investment firm Schroders, savers are thought to have withdrawn a total of Ł60 billion, with individuals taking out an average of Ł4,600.
The study found that women are more likely to raid their savings than men, while those aged over 65 are most likely to tap into their capital to help them pay for everyday living costs.
‘The amount of capital being drawn down suggests that it is not just rainy-day funds that are being drained, but a significant proportion of individuals' long-term savings,’ said Robin Stoakley of Schroders.
‘This is particularly an issue for those nearing or in retirement as they have less opportunity to rebuild their savings and declining annuity income proves insufficient to cover their day to day expenditure,’ he continued.
Persistently low interest rates are providing little incentive for saving, experts said, with spending proving to be a more sensible option for some.
Inflation slows but still remains above target rate
NewsMaster Bulletin - 18 August 2010
Inflation slowed in July but still remains above the Government's 2% target.
The Consumer Prices Index (CPI) edged down from 3.2% to 3.1% over the month. Falling petrol costs and second-hand car prices over the month helped ease CPI overall, but pressure from rising food costs has kept the CPI above 3% throughout 2010. Food prices jumped 0.7% between June and July, the biggest monthly rise for two years.
The Governor of the Bank of England has to pen an open letter to the Chancellor when CPI has been more than one percentage point above or below 2% for three months in a row.
In his letter this month, Mervyn King said rate-setters had been "surprised" at the recent strength of inflation, and warned: "How fast and how far inflation will fall are both difficult to judge, with substantial risks in both directions."
The headline rate of Retail Prices Index inflation also fell to 4.8% in July from 5% in June, the Office for National Statistics (ONS) said.
Minimum wage changes to ‘cost employers £50m’
NewsMaster Bulletin - 18 August 2010
Plans to include 21-year-olds in the adult rate of the National Minimum Wage (NMW) will cost employers almost £50 million, according to Government estimations.
Currently only those aged 22 and over are entitled to the main adult rate of the NMW, although this age restriction is set to fall to 21 from 1 October 2010.
In its impact assessment of the changes, the Department for Business predicts that the cost to companies, charities or voluntary bodies of moving 21-year-olds to the adult rate will be around £48.2 million.
From 1 October 2010 the adult rate will rise from £5.80 to £5.93 per hour, while the rate for those aged between 18 and 20 will climb from £4.83 to £4.92. 16 and 17-year-olds will be entitled to a minimum hourly rate of £3.64 from this date.
In addition, apprentices will become entitled to a minimum wage rate for the first time in October, following the Government's acceptance of recommendations from the Low Pay Commission.
The new wage will apply to apprentices who are under the age of 19, or those aged 19 and over who are in the first year of their apprenticeship.
Firms urged to register for energy scheme as deadline approaches
NewsMaster Bulletin - 18 August 2010
Businesses are being urged to register for a new energy saving scheme to help them save money on their bills.
Eligible firms must register for the Carbon Reduction Commitment (CRC) initiative by 30 September or risk an immediate £5,000 fine, and £500 for each day after that. Some experts have warned that fines could reach a maximum of £45,000.
Yet recent reports have suggested that two thirds of the estimated 3,500 to 4,000 eligible organisations have not yet registered for the scheme.
From April, firms will need to buy permits for each tonne of carbon dioxide emitted. Those organisations which do the most to boost their energy efficiency could receive a 10% bonus, while those that do the least may incur a 10% penalty.
Commenting, the Energy and climate change minister, Greg Barker, said: ‘The CRC will encourage significant savings through greater energy efficiency and importantly will make carbon a boardroom issue for many large organisations. My message to businesses today is to register now.’
He added: ‘I understand the original complexity of the scheme may have deterred some organisations and I want to hear suggestions as to how we can make the scheme simpler in the future’.
Supermarket adjudicator to investigate disputes
NewsMaster Bulletin - 11 August 2010
A new adjudicator is to be set up to resolve disputes between farmers, suppliers and supermarkets, the Government has announced.
It follows an investigation by the Competition Commission, which suggested that small suppliers were being treated unfairly by large supermarket chains.
The Groceries Code Adjudicator (GCA) will sit within the Office of Fair Trading, although it will remain independent.
It will enforce the Groceries Supply Code of Practice (GSCOP) and investigate complaints from UK and overseas suppliers, who will be able to remain anonymous.
The Government hopes that the new body will be established within the next 18 months to two years.
Consumer Minister Edward Davey said: ‘We want to make sure that large retailers can't abuse their power by transferring excessive risks or unexpected costs onto their suppliers.’
He added: ‘These sorts of pressures are bad for producers and bad for consumers - ultimately they can lead to lower quality goods, less choice and less innovation. The adjudicator will be able to step in to prevent unfair practices continuing - ensuring a fair deal for producers and safeguarding the consumer interest.’
However, the British Retail Consortium (BRC) has criticised the move, arguing that the new adjudicator is an unnecessary ‘quango’.
‘An adjudicator will just add unnecessary costs,’ said BRC Director General, Stephen Robertson. ‘With an independent budget and no direct reporting line to the OFT or Government, this is a quango. Quango's cost. This will reduce the efficiency of the supply chain and customers will pay the price.’
EU Directive to give self-employed workers new benefits
NewsMaster Bulletin - 11 August 2010
Self-employed workers and their partners are to receive the right to maternity leave and pension benefits following the introduction of a new European Directive earlier this month.
The Directive grants self-employed women, assisting spouses and life partners of self-employed workers a maternity allowance and a leave period of at least 14 weeks, should they choose to take it.
Assistant spouses and life partners will also have the right to social security coverage such as pensions on an equal basis as formal self-employed workers, if the member state offers such protection.
It is hoped the Directive, which came into force on 5 August 2010, will boost female entrepreneurship throughout the EU.
Commenting, Viviane Reding, EU Commissioner for Justice, said: ‘With the entry into force of this new law, Europe takes an important step forward in terms of increasing social protection and providing equal economic and social rights for self-employed men and women, and their partners’.
Member states will have to introduce the new entitlement into their national legislation within the next two years.
Business welcomes ‘one-in, one-out’ approach to regulation
NewsMaster Bulletin - 11 August 2010
Plans to introduce a ‘one-in, one-out’ regulatory system to help tackle the ‘red tape burden’ are being welcomed by some of the UK’s leading business groups.
From 1 September when Ministers seek to introduce new regulations which impose costs on business or the third sector, they will have to identify current regulations with an equivalent value that can be removed.
The measures are aimed at transforming the relationship between people and Government by changing how regulations are drawn up, introduced and implemented.
Announcing the changes, the Business Secretary Vince Cable, said: ‘By ensuring regulation becomes a last resort, we will create an environment that frees business from the burden of red tape, helping to create the right conditions for recovery and growth in the UK economy’.
The Forum of Private Business (FPB), which had previously campaigned for a reduction in the volume of red tape imposed on small firms, has applauded the move.
‘It is good to see the Government pushing ahead with its commitment to improving the regulatory landscape,’ said the Forum's Head of Campaigns, Jane Bennett. ‘The concept of introducing regulations only as they are needed is absolutely necessary given the existing burden on small businesses, but it will require a change in behaviour for many government departments.’
The British Chambers of Commerce (BCC) has also voiced its support for the changes, although added that the new system must ‘show tangible results - so that businesses can see the results as soon as possible’.
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