Marketing Newscast

A quarter of businesses are planning redundancies, according to a survey of 2,000 HR directors by the Chartered Institute of Personnel and Development (CIPD). CIPD CEO Peter Cheese blamed the costs the new Labour Government is putting on business as a result of a 6.7% increase in the minimum wage, a steep rise in Employer National Insurance Contributions (NICs), and plans to introduce new workers’ rights that are likely to make hiring and firing more difficult for employers. He noted the survey represented “the most significant downward changes in employer sentiment we’ve seen in the last 10 years, outside the [covid] pandemic... Employer confidence has been impacted by planned changes to employment costs, and employment indicators are heading in the wrong direction.” As well as making redundancies, one in three companies are either laying off staff or taking on fewer workers, while 42% are raising prices to cover the higher tax bill and a quarter are cancelling plans to invest or grow their businesses, the CIPD found. However, 58% of HR workers in the public sector said they expect recruitment to become easier in the coming years, and 56% anticipated fewer staff would leave their jobs.

A separate study by the Federation of Small Business (FSB) also suggests business confidence among its members has collapsed, to a five-year low. Its index of sentiment has dropped to its lowest score since the opening months of 2020, when the nation was forced into covid lockdowns. A quarter of small businesses expect to shrink in the first quarter of the year, with confidence particularly gloomy within the hospitality, wholesale and retail industries. More than two-thirds of bosses cited the tax burden as a critical barrier to growth. FSB Policy and Advocacy Chair Tina McKenzie said: “The upcoming Employment Rights Bill is a major source of stress for small firms, with nine in ten business owners saying they are concerned about its introduction, and this is undoubtedly a major cause of the very subdued confidence levels seen in our research.”

Commenting on both surveys, Shadow Business Secretary Andrew Griffith said: “This latest research joins a pattern of reports all demonstrating that business confidence is on the floor and a huge proportion of businesses are likely to cut jobs or hiring”. “A change of course by the Government is long overdue. You can’t be serious about growth if you impose a jobs tax followed by the union-inspired, jobs-killing Employment Bill,” he added. A Treasury spokesman said the Government had capped Corporation Tax and made full expensing permanent to encourage investment, adding: “We delivered a once-in-a-Parliament Budget to wipe the slate clean and deliver the stability businesses need to invest and grow, while protecting working people’s payslips from higher taxes, ensuring more than half of employers either see a cut or no change in their National Insurance bills, and delivering a record pay boost for millions of workers. Now we are going further and faster to kickstart economic growth and raise living standards, with a majority of business leaders confident that the Chancellor’s plans will help drive business investment.”

Meanwhile, Employment Minister Justin Madders has said concerns over the new rights the Government is giving to workers, including giving them ‘day one rights’ represent “misplaced fear”. Madders told City AM he believes firms recognise the benefits of “giving people more certainty at work” and argued the new legislation would help firms in “treating their workforce well” and that “doing so is good for business”. “We think [it] will be a real step forward in sending the message out that if you treat your staff well, you’ll have better recruitment, better retention, better productivity and overall, a better, successful business,” he said on a visit to a branch of Richer Sounds in London.

Britain’s chemicals industry is at “breaking point” because of high energy costs and carbon taxes, Ministers have been warned, as companies including Ineos, Dow, Johnson Matthey and Croda say plant closures are “inevitable” unless the UK became more competitive. In a letter to Business Secretary Jonathan Reynolds, the Chemical Industries Association trade body also accused ministers of appearing to show “disinterest” despite dire warnings, adding that a “failure to act will inevitably lead to more closure announcements”. The fact the letter was sent on 22^nd January, but that no reply had yet been received, has also prompted further claims that Reynolds is failing to take the crisis seriously. Steve Elliott, CEO of the Chemical Industries Association, said: “Chemicals is the foundation industry of manufacturing in this country. “There is collective dismay across our membership at the lack of interest and urgency being shown here by the Government.” The chemicals sector is the country’s second-biggest source of exports and employs more than 130,000 people. It provides the raw materials used in around 96% of manufactured goods. However, a recent report revealed the chemical industry’s output has tumbled by 40% since January 2021, the Telegraph reports, adding that production is now at its lowest level since 2013. Last week, an ammonia factory in Hull – the last of its kind in Britain – was mothballed by Yara, the Norwegian chemicals giant, and on Friday, American chemicals giant Dow confirmed that its plant in Barry, Wales, was under threat of being scaled back. Last year, Ineos, the petrochemicals empire of Sir Jim Ratcliff, revealed plans to close Scotland’s last remaining oil refinery, in Grangemouth, with Labour’s 2030 ban on new petrol car sales partly blamed for the closure, along with soaring energy costs and carbon taxes levied because of the Government’s net zero policies. CF Fertilisers UK also closed an ammonia plant in Billingham, Teesside, in 2023, because of high gas costs. A Whitehall source told the newspaper they “didn’t recognise” claims that Reynolds was not taking the issue seriously enough. A government spokesman said: “Our chemicals industry exported nearly £32bn last year and is a crucial part of delivering our Plan for Change with investment and reform to deliver growth and putting more money in people’s pockets. We do however recognise the need for a long-term plan that gives industries like these the certainty and stability to succeed, and that’s why our industrial strategy will focus on advanced manufacturing as a key growth sector to boost our competitiveness and unlock investment.”

The Pound rose to its highest level against the US dollar all year on Friday, trading at $1.26, up 0.3 per cent on the day.

The consultation on plans by the Financial Conduct Authority (FCA) to “name and shame” financial institutions when they are under investigation but not found guilty of any wrongdoing ends today. The House of Lords Financial Services Regulation Committee is known to have opposed the plans, saying earlier this month they are unacceptable and would unfairly damage innocent companies. Miles Celic, CEO of TheCityUK, has also issued a warning today, telling the Telegraph that if the FCA presses ahead with the controversial plans it will become “harder to attract companies to the UK, not easier”. “The risk is you create a presumption of guilt rather than a presumption of innocence,” he said, adding that the proposals could create a “run on institutions”. “This is a social media age – it is very difficult to contain information, particularly misinformation, once it is out”. Investigations by the FCA take an average of three to four years, and in 56% of cases it takes no further action against the companies it has looked into, the Telegraph says. An FCA spokesman said: “Our aim is to improve accountability, public and whistleblower confidence and information for consumers and firms. In response to significant feedback, we amended our proposals and we welcome acknowledgement that there may be a case for confirming investigations reactively and announcing investigations into unregulated firms, which make up over 60% of cases. We’re carefully considering further feedback before making a final decision”.

Clayton Dubilier & Rice (CDR), the private equity backer of Motor Fuel Group (MFG), one of Britain's biggest petrol forecourt empires, is exploring the sale of a 25-30% stake in a deal that could value it at about £7bn, Sky News has learnt.