Small firms fear the new Employment Rights Bill will harm recruitment, according to a survey by the Federation of Small Businesses (FSB).

The research shows that 92% of small employers have concerns about measures in the Bill.

One of the main concerns cited in the Bill is changes to unfair dismissal legislation, which would expand the grounds for employees to take their new employer to a tribunal from their first day in the job.

In addition, 67% said the Bill would see them recruit fewer staff while 32% said they would reduce headcount before the measures become law.

Tina McKenzie, FSB’s Policy Chair, said:

‘Small firms have made it crystal clear that the Bill will not motivate them to hire more whatsoever. Their feedback is emphatic, resounding, and overwhelming.

‘Ministers must show they get the risk to jobs and avoid a cavalier, dogmatic or patronising approach to the loud and clear feedback from small businesses. The economy is in no fit state for a ‘war on work’. 

‘If employers fear they will be sued, fewer will hire – with knock-on effects including a rising benefits bill and a lasting drag on living standards across the UK.’

Internet link: FSB

The UK economy grew for the first time in three months in November, according to the Office for National Statistics (ONS).

ONS figures showed an expansion of 0.1% in GDP after the economy shrank in each of the two previous months.

But the figure was lower than economists had expected, with declines in manufacturing and business rentals and leasing.

Figures showed the services sector drove the marginal growth in November, with pubs, restaurants and IT companies performing well.

UK inflation dipped in December for the first time in three months, the ONS reported.

Prices rose 2.5% in the year to December, down from 2.6% the month before, ONS said.

The ONS said while hotel prices and tobacco prices had fallen last month, the decreases were offset by the cost of fuel and second-hand cars rising.

Ben Jones, CBI Lead Economist said:

‘After a string of disappointing data, it’s good to see that growth returned to positive territory in November, though the economy is still only on track for a very modest expansion at best over the final quarter of last year.

‘In the wake of the Autumn Budget a mood of caution seems to have settled over UK businesses. Many firms are entering 2025 with a focus on reducing operational expenditure, which is likely to weigh on pay, hiring and investment in the months ahead.

‘The government can help shift the UK’s economic narrative with more determined focus on measures that could underpin growth.’

Internet link: ONS ONS CBI

Parliament’s spending watchdog has accused HMRC of deliberately running down its phone services to force people to go online, according to a report.

The Public Accounts Committee’s (PAC) report into HMRC’s customer service levels found that the average call waiting time has passed 23 minutes.

It also found that 44,000 customers were cut off without warning after being on hold for more than an hour last year.

The report said:

‘HMRC’s customer services have deteriorated even further since this Committee last reported a year ago.’

It continued:

‘HMRC says it has not been adequately resourced to meet telephone demand from customers, but it must take responsibility for its own failings to offer sufficiently effective digital services to customers. We are concerned that it has sought to degrade its telephone service to drive taxpayers to digital channels.’

It added:

‘HMRC has been too willing to let its telephone services fail in the hope this forces people to use its digital services instead.’

The PAC report made this recommendation:

‘HMRC should ensure it understands how far its digital services can replace telephone services and what level of telephone service it needs to retain to meet customers’ needs – including those of small businesses. HMRC should ensure it meets a minimum level of service for all customers, including those seven million customers HMRC estimates can’t use digital services.’

Internet link: Parliament

The government has commissioned an independent review of the Loan Charge.

The Exchequer Secretary to the Treasury made a Written Ministerial Statement announcing that Ray McCann, a former President of the Chartered Institute of Taxation, would lead the review.

The review will examine the barriers preventing those who are subject to the Loan Charge but have not already settled and paid their tax liabilities in full from reaching resolution with HMRC. It will recommend ways in which they can be encouraged to settle with HMRC.

The reviewer will report and present their recommendations to the Exchequer Secretary to the Treasury by summer 2025.

However, the announcement drew criticism from campaigners.

Steve Packham, from the Loan Charge Action Group, said:

‘What the government has announced today is not a review at all, as it actually astonishingly excludes reviewing the Loan Charge. It is a complete sham and a betrayal of the promise made by Rachel Reeves last year.

‘The terms of reference start by justifying the Loan Charge and the whole approach taken and instead of being any review of the issue and scandal, is just about how people can be persuaded to give in and pay the unfair and disputed demands. This will not only not get to the truth, it will not resolve the matter and cases will unfortunately drag on and on.’

Internet link: GOV.UK Loan Charge Action Group

The UK economy shrank for the second month in a row in October, according to the Office for National Statistics (ONS).

Official figures showed a 0.1% drop in gross domestic product (GDP) for October. The economy had been expected to return to growth following a fall during September.

However, the ONS said that activity had stalled or declined, with pubs, restaurants and retail among the sectors reporting weak months.

David Bharier, Head of Research at the British Chambers of Commerce (BCC), said:

‘With growth of just 0.1% in the three months to October and an unexpected fall in the monthly GDP, the UK economy was already fragile ahead of recent policy announcements.

‘The full impact of the Budget since then is yet to be seen. However, our research has already shown a spike in anxiety over tax and employment policy. Many businesses are telling us that increased costs are likely to have an impact on their investment and recruitment plans. Firms of all shapes and sizes are facing tough decisions in early 2025.

‘The Industrial Strategy due in the Spring has the potential to boost business growth for the long-term. Companies are also eager to see Government plans on business rates reform, trade and infrastructure.

‘Getting sustained economic growth will only be possible if the environment is right for businesses to invest, recruit and export.’

Internet link: ONS BCC