Small businesses concern about unemployment continues

THE Federation of Small Businesses (FSB) saw a dramatic rise in calls to its legal advice line on lay-offs and redundancies in the first two quarters of this year.

The FSB’s legal advice line saw an extraordinary 155% rise in calls on redundancies and a substantial 656% rise on lay-offs from January to June this year compared to 2008 as small businesses cut back costs and sought advice on employment issues.

During the first 3 months of the year, the FSB saw a dramatic increase of inquiries in lay-offs by a massive 1180% and redundancies by 93%. But as the rate of decline in the economy slowed down during quarter 2, there were a comparatively small number of inquiries to the legal advice line - lay-offs increased by 30% and redundancies 88%.

A lay-off is a temporary measure such as short-time work, where as redundancy is a permanent dismissal of the member of staff.

At the same time, calls to the legal advice line about recruitment nearly doubled (48%) as some small businesses fought the downturn and were looking to expand.

The FSB is calling for small and medium sized businesses – which employ over half the private sector workforce – to be given the support they need to tackle the downturn. The FSB is proposing three solutions to help small firms not only keep people in jobs, but help create new ones, including:-

* A government funded wage subsidy for employers and employees who have their work hours shortened;

* A moratorium on legislation - delaying all new employment and business legislation during the recession; and

* Cutting payroll taxes including increasing National Insurance contributions and cutting employer’s contributions.

FSB Merseyside, West Cheshire & Wigan Regional Chairman Norman Lay said:- “Small businesses are the engine room of the economy and are in a key position to help generate new jobs. The FSB is calling on the Government to ensure small firms have the tools they need to get through the recession and retain and create jobs.”

HALL HOSTS FOOTBALL HISTORY KICK ABOUT

IT’S Red versus Blue as two of Liverpool’s most distinguished historians kick off a trip down football memory lane!

The magnificent setting of St George’s Hall Concert Room on Lime Street in the city centre will provide the setting for a light-hearted derby debate on Thursday 30 July 2009 at 7pm.

It will focus on the achievements and traditions of both clubs, and seek to unearth little known facts and hidden gems of their past.

Community Historian Steve Binns MBE will be aiming to score for the Blue half of the city and famed local historian Frank Carlyle will be tackling the Reds.

Fans are being urged to go along, contribute and cheer on their favourite side to victory!

Radio Merseyside presenter Alan Jackson will be refereeing the discussion.

Tickets cost £4.95 and are available from St George’s Hall Heritage Centre, or by calling:- 0151 225 6909.

Wage freezes are not the only story for pay

THERE are good pay deals still being done, including in the private sector, according to data from the Labour Research Department (LRD) Payline database.

Pay freezes are not the only way employers have responded to the economic downturn. In fact, according to Payline, only around 23% of wage settlements since January 2009 have been pay freezes. This means that the greater majority of wage settlements, including in the private sector, have been positive. In only a tiny handful of cases have there been actual pay cuts.

However, LRD’s information shows the level of pay increases has dropped since 2008, to an overall median of 2.5% from January to June this year, while the range of pay settlements has widened, with deals in the private sector ranging from 0% to 6% or even more.

LRD’s figures are also revealing another apparent trend in pay for 2009 in the growing difference between long-term and short-term negotiated pay deals. The median since January 2009 for long-term deals is 3.2% compared to the median for new deals, which is 2%.

Settlements that are negotiated for one year (or sometimes less) with unions have also been disproportionately affected by pay freezes. Currently around 35-40% of these new deals are running at 0%.

This is in stark contrast to long-term and staged deals, often – but not always – built on a formula linked to one or other of the official measures of inflation. These deals are in almost all cases still delivering pay rises, mostly in the range 0.5%-5%. And, while in some very rare cases employers have reneged on these deals, for the most part pay promises made before the downturn have been honoured.

“It is likely that employers that sign long-term deals with their unions favour stability and good industrial relations, and know that over time the pay picture will probably even out under these deals. Freezing pay is a short-term solution, and is not sustainable in the long term. Many employers even in a downturn see the benefits of a more predictable situation where they can be sure of rewarding their staff consistently.” said Lewis Emery, LRD’s pay and conditions researcher.

The three-monthly median pay increase up to and including June 2009 was 2.3% for all deals. This is a drop from the three-month figure to May, which was 2.5%. See table below for further comparisons.

Table of three-monthly and monthly pay medians, showing all deals and new deals only.  Figures from December 2008 to May 2009.