March 2010 - Politicians should recognise importance of SMEs

I have heard Alistair Darling described as many things but the majority of them are not suitable for print! At the very least he would be described as the unluckiest chancellor in history. The role was certainly a poisoned chalice when he took over three years ago as the world stood on the verge of a huge financial catastrophe that we are all still feeling the effects of.

The tide looks to be finally turning with unemployment falling sharply, and the Bank of England predicting that growth in the first quarter of 2010 will continue at around 0.3%. If the latter turns out to be accurate when the figures are released at the end of April, there will be relief all round that the “double dip” recession has been averted. Admittedly growth at this rate is still sluggish but it is imperative that it continues to help rebuild confidence.

The chancellor was under huge pressure from the credit rating agencies to put forward concrete plans in the budget to reduce the public deficit but realistically, on the eve of a general election, Gordon Brown was never going to let this happen. The main aim was therefore to cause as little harm as possible to both the economy and Labour’s political ambitions. Inevitably the tough decisions will have to be made by whoever takes on the job as chancellor following the election.

There were some modest measures outlined in the budget to help SMEs, such as the proposed cut in business rates to be introduced in October. However these do not avoid the continued uncertainty for business owners and entrepreneurs with the prospect that all announcements could be reversed following the election. What small and medium sized businesses really require now are irreversible plans to help them recover from the difficult last few years rather than to be ignored as has happened too often over the recent years. This smacks of being too little too late but given that SMEs account for 99.9% of all businesses and more than half of UK employment and turnover they are going to have a major influence on how quickly the economy fully recovers. We can only hope that once the election is over the needs of small businesses are fully recognised and implemented.

What policy decisions would you like to see introduced following the election to help SMEs? Join the debate via our blog.

Paul Harrison, Commercial Property Solicitor

Employing school age children is a minefield as a West Yorkshire pub recently found out. The Bull’s Head in Linthwaite found itself in trouble with Kirkless Council because it was employing waitresses aged 16 but still technically under school leaving age, which is one of the tricky aspects of the rules for employing young people that employers often miss.

Young people are employed in all manner of jobs, from supermarkets, where you notice the under 18s obtaining authorisation for each sale of alcohol, to those waiting on in pubs, hotels and restaurants, shelf stacking in shops and making the coffee in hairdressing salons.

You might not be surprised to learn that, in Indonesia, 4 million children aged 10 to 17 are in work, and that 1.76 million work more than 40 hours a week. You might be interested to learn however that, in the UK, about 40% of children under 16 have some form of employment and, of those, 74% are employed illegally, with 25% under 13. It is clear that there is a hidden army of working children but any employer flouting the rules does so at their peril.

The rules concerning employing those under 18 are complex. Different rules apply to different age groups so it is worth checking before, like the Bull’s Head you find yourself on the wrong side of a local authority. For full details of these rules read Employing Young People on the Cousins Business Law website.

Keeping personal data safe and using data only for the purpose for which it was collected is an obligation set on every business owner. Although data protection rules have been around for many years, business owners are often willing to sail close to the wind in their use of data, in part due to a lack of understanding, but also believing the powers of the Information Commissioner’s Office (ICO) are very limited.

All that will change in April 2010, when new stronger powers will be introduced to help the ICO keep data protection infringers in check.

Fines of up to £500,000 will be possible for any data controller who deliberately or recklessly commits a serious breach of the Data Protection Act 1998.

A person convicted of procuring personal information from a data controller by deception currently faces a fine too, but there’s a call to see prison sentences of up to two years introduced, so watch this space!

The ICO will also soon have the powers to conduct spot checks on private sector businesses. Although these mandatory audits are likely to be designated by industry sector by the Secretary of State, following recommendations by the ICO, this comes as a timely reminder for all businesses to review and revisit their own data handling, storage and use procedures.

For more on data protection rules read Data – Keep it Safe on the Cousins Business Law website or visit the Information Commissioner’s website mentioned below.

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