News that unemployment levels have risen to 2.494 million in the second quarter of the year indicates that the private sector is struggling, at the moment, to take up the slack caused by lay offs in the public sector.

That was the view of the Chartered Institute of Personnel and Development (CIPD) following the announcement of the latest official data on the UK’s jobs market.

John Philpott, the CIPD’s chief economic adviser, said that, after a few surprisingly upbeat quarters, the UK employment market has finally caught up with the reality of weaker demand in the private sector and the impact of mounting public sector job cuts.

Dr Philpott assessed the statistics as “a mix of ups and downs – unfortunately most of them bad news”.

Unemployment is up (by 38,000 to 2.49 million on the quarterly Labour Force Survey measure and by 37,100 to 1.56 million as indicated by the number of people claiming the Jobseekers’ Allowance).

Jobs were up for men (49,000) but down (24,000) for women, a clear signal, the CIPD said, of the impact of job cuts in the public sector.

Youth unemployment climbed by 15,000). Redundancies were up (32,000) but vacancies were down (22,000). While the number of people working part-time because they were unable to find a full-time job grew by 83,000 to 1.26 million.

Dr Philpott concluded: “The jobs market has clearly taken a turn for the worse since the start of the year with unemployment on the headline measure as well as the claimant measure now increasing.

“All that remains to be seen is how bad things get, but given everything else we know about the economic outlook for the UK economy this year and next it looks like the only way is up for unemployment.”

The Government should press ahead with plans to make flexible working available to all workers or else run the risk of creating a two-tier employment environment.

In its response to the consultation on Modern Workplaces, the Chartered Institute of Development and Personnel (CIPD) argued that businesses of all sizes can enjoy distinct benefits from flexible working.

Under Government plans, all employees will have the right to request flexible working packages by 2015.

These include flexible parental leave and equal pay rules, as well as the right to ask for alternative employment practices such as homeworking and flexi-time.

There has been pressure on the Government to exempt the very smallest of employers from the rules.

But the CIPD has countered by saying that flexible working should not be seen as a perk for parents and carers but as a genuine aid to running a progressive and efficient business operation.

Any exemption would impose a divide between larger and smaller firms, one that would place those smaller employers at a disadvantage.

Research by the CIPD has shown that over a half (54 per cent) of potential employees look for employers who provide a good pay and benefits package as opposed to job satisfaction.

Mike Emmott, the CIPD’s employee relations adviser, said: “The truth is that many employers ­large and small have anticipated the Government’s proposals and are willing to consider requests from any employee. They see the business benefits of helping employees balance their work with their personal commitments at a time when organisations need to be driving a competitive edge through their workforce.

We believe that the flexible working regulations are a great example of light-touch legislation and we see no case for excluding micro-businesses and start-ups when the regulations are extended. Excluding businesses of any size from the application of employment regulation would tend towards the creation of a two-tier labour market and could be a perverse disincentive for small businesses to expand.”

A significant proportion of the UK’s small firms may be relying on the personal finances of their owners in order to continue trading.

That was the finding of a survey conducted by the think-tank, the Centre for Economic and Business Research (CEBR).

Polling some 750 enterprises employing 20 workers or fewer, the CEBR reported that, on average, business owners have been directing £20,000 from personal assets into their firms.

Of those who responded, 27 per cent admitted to requesting loans from family and friends in order to keep the businesses solvent.

A similar proportion (26 per cent) conceded that they had taken out personal overdrafts or bank loans, or had turned to their credit cards, to maintain their business activities.

More alarmingly, 13 per cent had re-mortgaged their homes to provide their businesses with liquidity.

The survey was carried in partnership with price comparison website, Make It Cheaper.

Make It Cheaper’s chief executive, Jonathan Elliot said: “It is extremely concerning that small business owners have been compelled to take the drastic step of placing their own financial stability in jeopardy to keep the company afloat.

However, many small businesses feel they have no alternative, as costs rise and traditional lines of credit remain cut off. It is no surprise that so many are turning to personal loans and credit cards to survive.”

The UK’s leading employers’ group has urged greater efforts to encourage more teenagers to study core science subjects.
 
The CBI has said that pupils who obtain good grades in science at the age of 14 should study separate GCSEs in physics, chemistry and biology – subjects that are key to rebalancing the economy.
 
According to the CBI, four out of ten firms that rely on scientifically skilled workers are struggling to recruit with the right level of qualification in technology, engineering and maths.
 
Not linking the way that science subjects are studied in schools to the needs of employers will only further hinder economic recovery, the CBI insisted.
 
Demand for science skills are increasing all the time in industry sectors such as low-carbon technology, pharmaceuticals and digital media.
 
The CBI pointed to recent figures showing that, despite the fact that 46 per cent of 14-year-olds received high marks in science in 2009, reaching level six, one above the standard expected of the age group, a mere 20 per cent actually went on to take GCSEs in all three major science subjects.
 
In the CBI’s view, taking triple science at GCSE would instil both a proper
understanding of the subjects and a confidence needed to continue study at both A-level and university.
 
According to the Department for Education, three quarters of triple science pupils achieving the highest grades progress to A Level science subjects, while only 59 per cent of double science pupils achieving the highest grades progress to A Level science subjects.
 
The CBI also pointed out that employers are willing to pay a premium for staff with science, technology, engineering and maths skills. Some 40 per cent of companies in science and IT and 33 per cent in construction reported that STEM graduates earn more than other graduates.
 
Katja Hall, the CBI’s chief policy director, commented: “The UK’s economic recovery will rely on businesses being able to access the talent they need to deliver sustainable growth.
 
“As the economy rebalances, we will need more highly-skilled employees, particularly for young people with STEM degrees, but businesses are struggling to recruit good graduates from the UK.
 
“At the same time that the English Baccalaureate has effectively made GCSE history and geography compulsory, the Government has neglected the sciences. It must pay more attention to getting students to study physics, chemistry and biology as separate GCSEs.
 
“At the moment only 18 per cent of young people study physics and chemistry as separate GCSEs compared with 26 per cent who study religious studies and 19 per cent who study physical education.”

The Government has moved early to close a loophole affecting capital
allowances.
 
The loophole concerns accelerated first-year capital allowance claims for
plant and machinery. It meant that firms could receive early tax relief.
 
The loophole was to have been dealt with by April 2012, but the Exchequer
has decided to bring forward changes to the law preventing such early
claims.
 
As a result, the new legislation came into effect on 12 August 2011.
 
Justine Greening, the Economic Secretary to the Treasury, said: “The
Government is determined to reduce tax avoidance in order to protect the
Exchequer, which provides funding for public services, and to maintain
fairness for the taxpayer.
 
“By ending this loophole we will preserve important revenue while
maintaining a fair system of capital allowances to support business
investment.”

Following the recent disturbances across a number of English cities, the Government has issued advice for those businesses that have been affected by the riots.

The information in full can be found at: http://www.bis.gov.uk/news/topstories/2011/Aug/riots-advice-for-business

HM Revenue and Customs (HMRC) has put forward recommendations that all VAT-registered businesses with a turnover below £100,000 should file their returns online.

Such businesses will also be required, under the plans, to make their payments electronically too.

HMRC has set a consultation in motion to pick up views on the changes.

It is proposed that the new regulations would come into effect as from 1 April 2012.

As part of the switch, businesses might also have to register, deregister and alter their details online.

The consultation closes on 31 October.

Small businesses think that environment-friendly policies can help improve profitability but also believe that tax and regulations are hindering them in their efforts to go green.

Those were the findings of a survey by the Forum of Private Business (FPB).

In the poll, just 10 per cent of respondents admitted to having done nothing to cut utility bills, while 41 pr cent have streamlined business processes, 28 per cent have reduced energy usage and the same proportion have embraced more energy efficient equipment.

Although 77 per cent of business owners disagreed that being green is impossible in the present economic climate, over a half (52 per cent) argued that green taxes inhibit their ability to invest in reducing energy use and three-quarters said that environmental legislation focuses on the needs of larger businesses rather than small firms.

In all, 52 per cent of the small businesses questioned believe they cannot become more environmentally friendly until they are able to be more profitable.

Phil Orford, the FPB’s chief executive, commented: “Small businesses see the benefits of green practices and technologies to the environment and, given rising energy costs, to their bottom lines. They are clearly taking steps towards introducing them but the lack of adequate support from the Government and utilities providers is frustrating.

“We need better information about the choice of support and equipment that is available, and incentives to help business owners embrace environmental processes and trade more sustainably locally, regionally and internationally, rather than ever more taxation. Small businesses should be at the forefront of thinking about the green agenda.”

The FPB wants the Government to take a series of measures to help encourage smaller enterprises to embrace green policies.

It should ensure that regulations are simple, proportional and clear to give business owners the greatest opportunity to understand and, where appropriate, implement government policy.

The green agenda should carry obvious business benefits so that environmental taxes can be seen as more than a revenue raising exercise.

The business case for energy efficient technology should be made clearer and better information on the choices available should be provided.

More support should be offered those firms that adopt green measures early, such as rewards for large-scale property improvements in the form of tax relief and soft loans.

And more emphasis needs to be placed on local schemes, forging closer links between small firms and the communities in which they operate. This might involve allowing retailers to use Energy Performance Certification to show off their green credentials.

The UK’s major banks look likely to meet their small business lending targets as agreed with the Government.

According to the British Bankers’ Association (BBA), the main five high street banks (Barclays, HSBC, Lloyds, RBS and Santander) loaned £37.4 billion to SMEs in the first six months of the year.

Under the terms of Project Merlin, to which the banks signed up as part of Government plans to boost the levels of credit and finance available to smaller firms, the target for the whole of 2011 is £76 billion.

A spokesperson for the Merlin banks said: “The first half year performance demonstrates the banks’ commitment to providing businesses with the financial support they need to invest and grow and the significant progress made this year.

“The banks’ efforts to encourage customers to come forward with borrowing proposals are set against the overall economic environment which remains challenging and business demand for credit which remains weak.”

Large numbers of smaller employers are not ready for a major change in employment law which comes into effect as from October.

The default retirement age of 65 will finally be scrapped as from 1 October this year, a measure that has been phased in since April.

This means that employers will no longer be able to force workers to leave their jobs once they hit 65 simply on the grounds of age alone.

However, a survey carried out by Employment Law Advisory Services (ELAS) revealed that a significant proportion of the SMEs polled were unaware of the legal implications that the move will involve.

Of those employers that offer private health cover, more than half (57 per cent) did not realise that the cost of provision for such benefits would rise markedly for employees aged over 65.

Peter Mooney, ELAS head of employment law, said: “Most businesses we speak to are now aware that they cannot force staff to retire due to age alone, but it seems many businesses haven’t actually thought through how the new law will affect them in practice.

“Expensive healthcare benefits is just one example of how employing older workers will affect businesses -  risk assessments, access requirements and adjustments for disability may also need revision as workforces grow older.”