Tuesday, 29 December 2009

Christmas - a lovely nuisance!

I like Christmas, but from a business point of view, it's a bit of a pain in the neck!

It's not just a couple of days (Christmas Day, Boxing Day), or even three (add New Year's Day); it's at least a lost week (add the three days between Boxing Day and New Year's Day), and realistically, it's two lost weeks (finally add the week leading up to Christmas!).

A lovely period of festive fun! A fortnight of lost work opportunities - if you're in anything but retail. I wish retailers all the best, but as I'm not in retail the Christmas period is a nuisance.

People's availability to work is reduced (I use sub-contractors regularly), and companies wanting work often "shut down" partially, or even completely, during the two weeks.

I wish everyone a Happy Christmas (just missed it - I was busy having fun!), and a Prosperous New Year - and I can't wait to get to next Monday (first working day of 2010)!

Wednesday, 23 December 2009

Steal from big business, priest advises

Parish priest of St Lawrence and St Hilda near York, Tim Jones, has told his parishioners: “My advice, as a Christian, is to shoplift.”

As reported in his local newspaper, The Press, Jones said: “I do not offer such advice because I think that stealing is a good thing, or because I think it is harmless, for it is neither. I would ask that they do not steal from small family businesses, but from large national businesses, knowing that the costs are ultimately passed on to the rest of us in the form of higher prices."

He told ITN on Monday that he was directing his advice to those with nothing and who had run out of other options. He said it was an acceptable alternative for those in desperate need, and was better than burglary or prostitution, for example.

"I would say to those people that are outraged: Compare how much you are spending on yourself this Christmas compared to how much you have given to people in desperate situations," he added.

He advised those who would now be planning to steal to only take what they needed for as long as they had a need.

He also said that his advocacy of shoplifting was a "grim indictment" of society and was a plea for assistance for the most vulnerable.

Tuesday, 22 December 2009

2010 will see slow economic recovery

Steve Pateman, head of UK corporate and commercial banking at Santander, was asked by the Daily Telegraph Business Club for his forecasts for 2010.

He replied that the economic environment would probably be more stable in 2010 than in the last 18 months, but expects the economic recovery to be slow and steady.

The pound will continue to be weak against the euro, he forecast, partly because of the high level of the UK's public sector deficit.

Interest rates, Pateman thinks, will stay low through the year. "It is a difficult balancing act in terms of managing inflation, but it is unlikely they will increase much in 2010 because such a move would kncok confidence in the economy, damage recovery and raise concerns among businesses looking to borrow to invest."

Pateman thinks that now is a good time for businesses to expand, and that banks will be looking to lend, as they wish to help small businesses, but it depends on having a viable business plan and a unique selling point.

However, banks are still reluctant to lend as much as they used to, and businesses are being held back by this. It would serve businesses well to find other capital sources if possible.

Monday, 21 December 2009

"Fragile" recovery for UK economy forecast by CBI

The CBI has predicted that the UK economy will show a gradual improvement in 2010, but the economic recovery will be “fragile”.

The group believes that the end of the UK recession will end in the fourth quarter of 2009, with a boost to consumer spending coming in December, prior to VAT going back up to 17.5 per cent in January. Despite that, however, the forecast is the economy will have reached pre-recession levels even by the end of 2011. Its latest forecast for the peak of unemployment is 2.8 million – lower than its original prediction.

John Cridland, CBI deputy director general, said: “Although the first few months of 2010 will be difficult, growth will gradually pick up and increasing confidence and demand will lead the UK into a more positive 2011.

“Consumer spending looks to be slightly more resilient than we first thought, and a weaker pound will help to support export growth.

“However, the economy will be on a fragile path of very slow growth, as we continue to feel the lasting effects of the financial crisis.”

Some of the CBI’s forecasts:
  • Annual growth of 1.2% in 2010, followed by growth of 2.5% in 2011.
  • Wage growth will be constrained during 2009 and 2010, then average earnings will rise by 3.9% in 2011.
  • UK interest rates to start rising in spring 2010, reaching 2% by the end of the year.
  • Inflation (CPI) to rise sharply following the rise in VAT in January, before easing back and falling below the Bank of England's target rate of 2% in 2011.

Friday, 18 December 2009

Fall in November retail sales should not be a surprise

It may be busy at the shops just a week before Christmas, but retail figures for November show a fall rather than the expected rise.

Retail sales were down 0.3 per cent in November, according to the Office for National Statistics (ONS). The fall followed a 0.6 per cent rise in October.

The ONS said the fall was the result of a sharp fall in sales at non-specialist retailers, which would include department stores.

Economists may be surprised at these figures, but they were announced a few days after a rise in inflation to 1.9 per cent was announced.

Let’s face it, with fuel prices rising again, consumers are finding it tough out there. Figures for December will be interesting, but all the talk about huge public debt, rises in taxes, National Insurance, and the lack of certainty about jobs and wages will, I feel, result in guarded spending this Christmas.

This country’s not out of the recession yet.

Thursday, 17 December 2009

Jobless claimant numbers down in the UK

There was a fall in the number of people claiming unemployment benefit in November for the first time in almost two years. It seems to be a clear indication that the peak of the jobless count will be lower than that forecast when the recession was at its worst.

Those claiming Jobseeker's allowance numbered 1.63m, a fall of 6,300, the first drop since February 2008, according to the Office for National Statistics.

Despite that fall, the number of unemployed people was up by 21,000 in the three months to the end of October, reaching 2.49m, but the rise was smaller than expected. Nevertheless, it is the biggest unemployment count for over 14 years, and the unemployment rate is 7.9%.

The good news is that the climb in unemployment figures is lower than expected. One of the reasons the numbers have been kept down is that employers have frozen pay and cut working hours in a bid to limit redundancies.

Chancellor Alistair Darling was surprisingly cautious about the figures. He said that the figures werer "very encouraging", but it would be "a mistake to believe that the corner has been turned. We still think unemployment will rise next year."

Wednesday, 16 December 2009

Inflation set to take off again

Inflation (the consumer prices index (CPI)) went up to 1.9% in November, from 1.5% the previous month. It stands at its highest since May when it was 2.2%.

Although 1.9% is as close as CPI has been to the government target of 2% since it was 2.1% in November 2007, there are fears that it is about lurch upwards, possibly to 3% in January.

The rise was mainly caused by higher petrol prices, which we have all suffered in recent weeks. Last November petrol prices were down by 8.3% on October; this time prices are up by 2.3% on the previous month.

Simon Ward, chief economist at Henderson, commented: "There is a risk that sharply higher headline rates will destabilise inflationary expectations in the absence of any policy response. With fiscal plans widely judged to lack credibility, the UK can ill afford any loss of confidence in the Bank's inflation-fighting determination."

It's a worrying trend.

Tuesday, 15 December 2009

If you get bad service ... tweet it!

There is a sign that many businesses use - particularly those with close connection to their customers, such as restaurants, or car servicers - which they hope will promote their business to others, and at the same time give them notice of any problems.

It runs along the lines of:

"If you're happy with our service, tell your friends; if you're not, tell us."

The trouble is that the modern world is a very different beast. Apparently, dissatisfied customers are now tweeting their feelings via Twitter and other online social networks straight away, rather than complaining to the service provider.

Robert King, professor of consumer behaviour at Kingston Business School, who analysed the change in consumer behaviour, says that such instant exposure means that companies have to act fast to repair their reputations with customers.

It is to be hoped that improved service all round will be the result.

Monday, 14 December 2009

Great Yarmouth's fishing industry is finished

Great Yarmouth’s last full-time fisherman is to quit the industry. The once-great Norfolk fishing centre has seen the industry decline over the years thanks to European union rules and environmental concerns over fishing stocks.

Jason Clarke, 39, is the fourth generation of his family in the fishing industry, but he will be the last. He said he was “bitter” and blamed the EU quota system for destroying the town’s fishing industry in the last ten years.

With a meeting sue to start in Brussels tomorrow to discuss fishing quotas for 2010, fisheries minister Huw Irranca-Davies has warned that negotiations will be “tougher than ever”.

Mr Clarke decided not to wait any longer. “It is an absolute farce and I've had enough of it,” he said. ”I don't want to give up but there is only so much you can take. I will miss the fishing but it has been ruined by bureaucracy. The boat needs to make £2,000 a week minimum to make it pay and you can't get anywhere near that any more because of the restrictions. It is really sad for me and the family, after four generations of fishing. But I have been forced out by Brussels. It is sad for the town too.”

I find it sad that a town’s whole fishing industry has been sapped and destroyed. No one can stand in the way of progress and changing times, but sometimes you can’t help but feel suspicious about the motives of the EU (and I am no anti-European).

Mr Clarke went on to say: “There is so much fish in the sea, despite what you hear,” he said. “If I was leaving because there were no fish out there, it would be easier – but is just isn't so.”

“This fallacy about no fish in North Sea makes my blood boil. This last year, we could have made a very good living, but the system doesn't allow you to catch anything,” he added.

Friday, 11 December 2009

Pre-budget report aims all environmental issues at vehicles

It would be nice if your business could support environmental measures to help reduce carbon emissions in the UK.

I already work from home so my carbon footprint starts out low without the need to travel to work.

But did the Chancellor announce any support for businesses to improve their carbon footprint in his pre-budget report?

Any support seemed to be mainly in the area of vehicle use.

• support for electric vehicles. From April 2010:

  - all electric cars will be exempt from Company Car Tax for a period of 5 years

  - all electric vans will be exempt from Van Benefit Charge for 5 years

  - a 100 per cent first-year allowance will be provided for the purchase of electric vans, subject to confirming compatibility with State aid rules

That’s an incentive for company car fleets to switch to electric cars.

• from 2012, the CO2 emissions thresholds for Company Car Tax (CCT) bands will be shifted down by 5g CO2 per km, and the graduated table of CCT bands will be extended downwards to a new 10 per cent band for cars emitting up to 99g CO2 per km, in place of the existing 10 per cent band.

That’s a punitive incentive, aimed at getting more money out of companies with cars emitting more carbon.

• changes to the company fuel tax regime. From 6th April 2010, the figure used as the basis for calculating the benefit of private fuel received for a company car will rise from £16,900 to £18,000; and for a company van from £500 to £550.

Again, this is a punitive incentive with less fuel benefits than before.

• subject to clearance under the state aid rules, businesses will be able to claim 100 per cent first-year allowances for expenditure on new and unused electric vans incurred on or after 1 April 2010 (Corporation Tax) or 6 April 2010 (Income Tax).

This is also a positive incentive for companies to switch to electric vans.

I couldn’t see anything else in the business arena on environmental topics. It would be nice to have seen more positive incentives and other incentives than based on vehicle use. It all seems a bit narrow-minded somehow.

Thursday, 10 December 2009

Chancellor moves to reduce youth unemployment

The Government says that unemployment was 2.46m in Quarter 3 of this year. It will come as no surprise that many parites expect it to continue to rise into 2010.

The CBI forecast unemployment will peak at 2.99m in Q2 2010. The National Institute of Economic and Social Research (NIESR) suggests it will reach 2.95m in Q1 2011. The British Chambers of Commerce's (BCC) prediction is a peak of 2.7m in Q2 2010, and the Ernst & Young Item Club predict the same level at about the same time - mid-2010.

In the pre-budget report yesterday Alistair Darling said that the Government will halve the length of time 18-24 year-olds will have to spend of Jobseeker's Allowance befor being offered training or a job. Previously a year, the new six-month timescale came into force yesterday.

In addition, the Chancellor announced plans to support 10,000 graduates from low-income families with internships, which will be short, unpaid jobs in professions with "historically poor access". This may start next summer.

Director of The Work Foundation, David Coats, said: "Mr Darling is moving in step with the other G20 economies by putting the highest priority on the reduction of unemployment."

Wednesday, 9 December 2009

Darling's pre-budget report delays some rises for 'next government'

Alistair Darling has delivered his pre-budget report. He said he wanted to promote growth without "wrecking" recovery.

He was forced to admit that the recession in the UK had been worse than he predicted last year, and that the economy would shrink by 4.75 per cent in 2009 compared with his Budget estimate in April of 3.5 per cent. The public finances were deeper in the red with a deficit of £178bn this year compared with the £175bn he had predicted.

Although Mr Darling has been under pressure to show how Labour would halve the UK's budget deficit in four years, he said could not give details where the spending axe might fall because the spending review has been delayed until after a general election. However, he did say that frontline public services would be protected.

There will be a one-off tax on bank bonuses over £25,000, which he claimed would raise £0.5bn.

The National Insurance is to go up by another 0.5 per cent, on top of plans unveiled in last year's pre-Budget report to increase the tax by 0.5 per cent in April 2011. However, the National Insurance threshold will be raised so that noone earning less than £20,000 will pay it. Mr Darling claimed the changes would raise £3bn a year.

The CBI attacked the move as an "extra tax on jobs" which would harm the UK's recovery.

Mr Darling said that unemployment would continue to rise for some time, but said that tackling it would remain the government's top priority.

He also announced that a 1p increase in Corporation Tax for smaller companies is to be deferred, leaving the 2010 tax rate unchanged.

It looks like he’s holding back on several things for “the next government” to put in place. I wonder if he’ll regret that if Labour gets back in!

Tuesday, 8 December 2009

Vanishing searches will not help Google

An article in today's Daily Telegraph talks about how a business's website disappeared from Google's searche engines.

The business - Onenewspage.com - saw its visitor traffic dive after it had disappeared from Google's results. Google accounts for 70 per cent of all internet searches. Visitors to websites these are critical to the success of many businesses, and they take a great deal of trouble to work on the Search Engine Optimisation (SEO) of their sites. It is hard work to get near the top of a keyword search. Google, it seems, can negate that overnight.

Google's standard response is not very helpful. It says: "We've processed your reconsideration request for X. We've now reviewed your site. When we review a site,we check to see if it's in violation of our guidelines. If we don't find any problems, we'll reconsider our indexing of your site. If your site still doesn't appear in our search results, check our Help Centre for steps you can take."

A Google spokesman said: "We don't comment on individual cases..." blah, blah, blah.

This is not good PR by Google. I have noticed this myself with my own sites and others. They sometimes seem to vanish in the Google world. Unless Google sorts this 'problem' (for it must be so) out, it will not retain its mighty position for very long.

Be warned, Google. Nothing stays on top for ever. As you know.

Monday, 7 December 2009

Sick notes vary wildly in time given off

It appears that there is a wide variation in the time patients are signed off for by different GPs across the country for the same condition.

There is government guidance on how long should be given off, but research found GPs generally ignore the advice.

The study, carried out by the University of Manchester and published in Occupational Medicine asked GPs how long should be given off for hernia repair, hysterectomy and heart attack. Responses were very different, for example, ranging from two to 13 weeks for a hysterectomy, and a third of respondents suggested four to six weeks more time to recover from a heart attack than recommended by the Department of Work and Pensions.

Further questions revealed that only a third of GPs knew that the government gave guidelines for sick leave.

The government is working on replacing sick notes with ‘fit notes’ in which a GP would outline what work a patient could carry out.

Leader of the study, Dr Richard Roope, said: "There is good evidence to show that work is generally good for health. We need to get across to GPs and patients alike that 'being signed off' may actually be bad for the health of the patient, their employer and the country as a whole."

Dr Tony Stevens, president of the Society of Occupational Medicine, said: "There needs to be culture shift amongst employers and patients and more support for GPs so that we can offer a more flexible approach that facilitates early rehabilitation to work."

Friday, 4 December 2009

Bailed-out banks fail to meet business lending targets

A National Audit Office (NAO) report has revealed that the state-owned banks in Britain will miss their targets for lending to small businesses for the year.

RBS and HBOS were given massive taxpayer support in the autumn of 2008, and at the time they promised to lend an additional £27bn to businesses, plus another £12bn to households. The NAO report says that "lending to businesses is not on track to meet targets". Indeed RBS has actually reduced its net lending to businesses by £9.1bn.

At the time of the bail-out Chancellor Alistair Darling said: "In return of this we have made it clear that we expect the banks to enter into legally binding, specific and quantifiable agreements to increase the amount of
credit in the economy."

If small businesses are unable to borrow as much as they would like, the wider economy is hit further, with failing businesses and rising unemployment.

A source from the Treasury said that the failure to meet the lending target does not necessarily mean that avilability of lending has gone down, but demand from businesses for loans has fallen as they re-assess their requirements.

Thursday, 3 December 2009

UK services sector grows to boost hopes of end to recession

Figures from the Chartered Institute of Purchasing and Supply (CIPS) released today show that the services sector in Britain grew again in November, as it did in October.

The continuing growth is good news for the economy as a whole as the services sector accounts for nearly three-quarters of the total economy. For this reason the services sector is often called the “engine room of the economy”.

The business activity index of CIPS was at 56.6, slightly down from the October peak of 56.9, and companies reported that new work coming in was at its fastest rate for over two years. British businesses are reporting confidence levels at their highest for two years as well.

CIPS’s chief executive David Noble said: “The services sector is continuing to grow but at a steady rather than spectacular rate.

“In contrast to the more fragile construction and manufacturing sectors, the UK services industry has shown growth for seven months now, which looked very unlikely in the dark days at the start of the year.”

The figures will be welcomed by Chancellor Alistair Darling who will deliver his Pre-Budget Report next Wednesday.

Although Britain is the only major economy still in recession, it is fairly clear that it will emerge from that status come the next quarterly figures in January. Nevertheless, it has been the longest recession since 1945.

Wednesday, 2 December 2009

Giving to charity is a side-pleasure of owning a business

One of the most surprising pleasures of running a business is ... giving money away!

Yes, incredible as it may sound, giving money away is a side-pleasure of being the owner of a business. But, of course, you want to give it away to deserving causes, by which, of course, I mean charity.

I own a business that doesn't have a huge turnover, and I make enough money to get by, rather than get mega-rich. Yet still I find it a great pleasure to give around 10 per cent of my profits to charity. Although my business could be international it tends to provide a local service, so I have so far given to local charities (and it's my business so it's my decision!).

I would much prefer to give money to charity rather than the taxman, who'll use it for his own purposes, many of which I might not agree with (and don't even start me on MPs' expenses!).

When I first gave money to charity from the business I was amazed at the sense of pride I felt. Yes, I had managed to make a little bit of money for the company, and give some away to a worthwhile cause. Marvellous.

As long as the business continues to make a profit, I will continue to contribute to charity. If you're a business owner and you're not doing it already, I suggest you try it too.

Tuesday, 1 December 2009

Business start-ups are down in the UK

Official figures show that there were four per cent less new businesses starting up in the UK last year. The number was 270,000.

However, the rate of business closures was only two per cent worse, to 219,000, in spite of the credit crunch and then the recession.

Most new businesses were set up in professional, scientific and technical ventures, which saw 54,000 new businesses. The highest closure rate was in construction, which lost 33,000 businesses.

Late payments slow down

Meanwhile, the late payment of bills eased to 21 days in October, according to Experian, the business information company. This is two days better than the 23 days of October 2008, and the quickest rate since April 2008. The biggest improvement came from large companies, down to 23.4 days on average, and the area seeing the best improvement was the South West.