The British Chambers of Commerce (BCC) has called for action to help firms employ more staff amidst recruitment difficulties.

A survey carried out by the business group revealed that 61% of firms are looking to recruit more employees, but many are facing difficulties in doing so.

According to the BCC, the construction sector is facing the most severe recruitment challenges, with 83% of construction businesses reporting issues with recruiting skilled workers.

The BCC has outlined a three-point plan to help businesses recruit. This plan includes encouraging firms to ‘find new ways of unlocking pools of talent’; helping employers invest in training; and reforming the Shortage Occupation List (SOL).

Jane Gratton, Head of People Policy at the BCC, said:

‘Businesses remain under huge pressure to fill jobs, but record levels of recruitment difficulty are showing no signs of improvement. Solutions are urgently needed so that firms can keep their doors open throughout these tough times.

‘We have written to the government outlining a three-point plan on how they can work with businesses to solve this.’

Internet link: BCC website

The International Monetary Fund (IMF) has warned that the UK faces the slowest rate of growth in the G7 next year.

The IMF predicts that UK economic growth will fall to 0.5% in 2023, which is considerably lower than its previous prediction of 1.2%, which was forecast in April.

Russia’s invasion of Ukraine and the Covid-19 pandemic has caused the global economy to shrink, the IMF stated. It has consequently cut its 2022 global growth forecast to 3.2%.

It also said that rising prices and higher borrowing costs are continuing to squeeze households and businesses around the world. The data revealed that in the three months to July, global economic growth contracted, marking the first decline since the onset of the pandemic.

The IMF predicts a 15% probability of recessions in the G7 economies, which include Germany, France, the US, the UK, Japan, Canada and Italy. This is almost four times higher than usual, according to the IMF.

Pierre-Olivier Gourinchas, Economic Counsellor and the Director of Research at the IMF, said:

‘The global economy, still reeling from the pandemic and Russia’s invasion of Ukraine, is facing an increasingly gloomy and uncertain outlook.

‘Higher-than-expected inflation, especially in the United States and major European economies, is triggering a tightening of global financial conditions. China’s slowdown has been worse than anticipated amid Covid-19 outbreaks and lockdowns, and there have been further negative spillovers from the war in Ukraine. As a result, global output contracted in the second quarter of this year.

‘The outlook has darkened significantly since April. The world may soon be teetering on the edge of a global recession, only two years after the last one. Multilateral cooperation will be key in many areas, from climate transition and pandemic preparedness to food security and debt distress.’

Internet links: IMF website

The Recovery Loan Scheme (RLS) will be relaunched during August 2022 as the government aims to continue supporting recovering small businesses.

The RLS launched in April 2021 and was originally scheduled to run until 31 December 2021.

At Autumn Budget 2021, the government extended the scheme by six months to 30 June 2022 and made some adjustments to its terms. The government provided a guarantee of 80% for loans made before 1 January 2022 and 70% for loans after that date. The borrower remains 100% liable for the debt.

According to the British Business Bank, accredited lenders have offered over £4.5 billion, through the RLS, to smaller UK businesses as they steer a path towards a sustainable recovery.

The relaunched RLS will support facility sizes of up to £2 million for borrowers outside the scope of the Northern Ireland Protocol, and up to £1 million for those in scope of the Northern Ireland Protocol.

The scheme will be open to smaller businesses with a turnover of up to £45 million.

Catherine Lewis La Torre, CEO, British Business Bank, said:

‘The British Business Bank is committed to supporting smaller businesses in accessing the finance they need to grow sustainably. Thousands of businesses in all sectors and from right across the UK have taken out loans under the RLS. This will better position them to confront both the challenges and opportunities that are ahead.’

Internet link: British Business Bank website

The level at which people start paying national insurance rose from £9,880 to £12,570 from 6 July.

According to the government, 30 million people across the UK will benefit from this tax cut. It says the increase will lift 2.2 million people out of paying any personal tax.

The threshold change means that 70% of UK workers will pay less national insurance, even after accounting for the Health and Social Care Levy, the government added.

Prime Minister Boris Johnson said:

‘We know it’s tough for many families across the UK, but we want you to know that this government is on your side.

‘Today’s tax cut means around 70% of British workers will pay less national insurance – even after accounting for the Health and Social Care Levy that is funding the biggest catch-up programme in NHS history and putting an end to spiralling social care costs.

‘So whether you are a receptionist, work in hospitality or are a delivery driver, this tax cut is likely to make you and your family better off.’

Internet links: HM Treasury press release

HMRC needs to demonstrate that off-payroll working rules, commonly known as IR35, can operate effectively and fairly in the real world, according to a report by the Public Accounts Committee (PAC).

The tax authority should also investigate whether the costs and unintended consequences of IR35 are proportionate to the additional tax revenue that the reforms raise.

The PAC concluded that it is too difficult for workers to challenge incorrect status determinations.

It also said that HMRC is not doing enough to understand the impact of the reforms on workers and labour markets.

Dame Meg Hillier MP, Chair of the PAC, said:

‘While workers in the gig economy have challenged their work and tax status in the courts, there is no recourse for workers deemed subject to IR35 tax rules despite the confusion and non-compliance that persist even in central government itself.

‘After years of fiddling with these reforms and with central government spending hundreds of millions of pounds to cover tax for individuals wrongly assessed as self-employed, the fundamental problems underlying UK taxation of work remain.

‘It is now up to HMRC to demonstrate that the system can work fairly in the real world; to prove that it is correctly claiming revenues under the system and that the additional revenues raised are worth the costs and unintended consequences in the labour market.’

Internet links: UK Parliament website