The news comes ahead of the latest round of employment statistics that are due out tomorrow, and are likely to show a further rise in those out of work.

The FSB’s own research has shown that 6.5 per cent of small firms are planning to lay off workers in the first three months of 2012, which is the highest level since the survey began.

But the FSB believes that providing small firms with incentives to create and maintain jobs could help, and that the Government should ‘think small first’, when it responds to the Modern Workplaces consultation.

The Modern Workplaces consultation focusses around flexible parental leave, flexible working, and equal pay. But the FSB believes that some of the proposals could harm small businesses.

As a result, the FSB is calling on the Government to delay maternity and paternity leave reform and to exempt micro firms from the extension of the right to request flexible working for all.

The Government must also act on the policies and initiatives that have already been announced such as those in the Autumn Statement in order to boost small business confidence and help them to invest and grow during 2012.

Commenting, John Walker, National Chairman, Federation of Small Businesses, said: “The beginning of 2012 is beginning to look bleak with confidence incredibly low and businesses looking to shed staff. However, things do not need to be so negative. If the Government makes the right choices and puts action into words we can turn this around. The Government has a good chance to make a real difference to the livelihoods of small firms when it reports on the Modern Workplaces consultation. Tinkering and increasing existing employment laws will only serve to worsen this situation. But by putting simple measures in place, such as excluding micro firms from the right to request flexible working for all, will help free businesses from the shackle of red tape so they can grow, innovate and take on new staff.”

The call comes as the latest ‘Voice of Small Business’ Index revealed that confidence amongst small businesses plummeted in 2011.

The Index also revealed that a number of businesses expect the economic situation to worsen before it gets better, which is why the FSB is calling on the Government to act on the policies and initiatives that have already been announced.

These include measures to encourage bank lending to small businesses and boost investment in business through the seed enterprise investment scheme, as well as proposed reforms to the planning system, and Government procurement contracts.

Falling inflation should also have a positive impact on smaller businesses, and recent energy price cuts look promising.

Commenting, John Walker, National Chairman, Federation of Small Businesses, said: “The message is clear – things are going to get worse before they get better. But, we are hopeful that as the inflationary pressures lessen in 2012, that businesses will become more confident. There are some good policy proposals in the pipeline too. However, the Government needs to quickly put in place the actions that it has promised. Small firms have heard what the Government has to say but are still waiting to see implementation. We believe that must be the Government’s priority: to make 2012 the year of doing, with the aim of creating a dynamic business landscape in which our entrepreneurs can grow and flourish.”

The news has not come as a surprise, as the rate of inflation first fell back in October 2011, and has since fallen by a full percentage point.

The largest downward pressure to the CPI came from petrol, gas and clothing, according to the ONS.

Leading economists believe that this is not the end of inflation’s tumble, and that it will play an important part in the UK’s economic recovery. Governor of the Bank of England, Mervyn King supports this, with a view that a sharp fall in inflation will occur this year.

If inflation does continue to fall, the Bank will be under less pressure to increase interest rates, which many think is vital to protect homeowners, particularly as unemployment is rising and repossession poses a significant risk.

Some predict that CPI inflation will fall to as little as 3.5 per cent next month, as the impact of the January 2011 VAT hike falls. Commenting, Howard Archer, chief economist at Global Insight said: “It should then head down markedly further due to the waning impact from substantially rising energy, commodity, and food prices in late 2010 and early 2011, and from sterling’s marked depreciation. In addition, weakened economic activity and ongoing muted wage growth amid significant (and growing) labour market slack is expected to weigh on underlying inflationary pressures. We suspect that consumer price inflation could fall below 3.0% in the second quarter and be down to the Bank England’s target level of 2.0% by the end of 2012.”

Prime Minister David Cameron has praised the British film industry for its ‘incalculable contribution to culture’ ahead of Lord Smith’s Review recommendations.

The film industry brings an estimated £4.2 billion to the UK economy each year, but we must help UK producers to make ‘commercially successful pictures’, to compete with the best international productions, Cameron claims.

2011 was a great year for the UK film industry, as The King’s Speech became the highest grossing British film of all time, collecting four Oscars and topping the box office charts for 20 weeks.

The praise for the industry comes ahead of Lord Smith’s Review, which is due to be published on Monday. The recommendations it makes will be aimed at building a stronger British film industry and developing and retaining the UK’s talent.

It is thought that the Review will recommend that Lottery funding is used to reward success and incentivise UK film-makers to develop ‘commercially successful’ pictures. Other predictions include recommending that the Government supports and prioritises a successful inward investment strategy in the industry, while the British Film Institute (BFI) will be encouraged to develop an ambitious international strategy and lead the way towards a more vibrant export industry in UK film.

Commenting, Mr Cameron said: “The UK film industry, the skills and crafts that support it and our creative industries more widely, make a £4bn contribution to our economy and an incalculable contribution to our culture.
“But in this year when we set out bold ambitions for the future, when the eyes of the world will be on us, I think we should aim even higher, building on the incredible success of recent years.

“Our role, and that of the BFI, should be to support the sector in becoming even more dynamic and entrepreneurial, helping UK producers to make commercially successful pictures that rival the quality and impact of the best international productions. Just as the British Film Commission has played a crucial role in attracting the biggest and best international studios to produce their films here, so we must incentivise UK producers to chase new markets both here and overseas.

“I am confident that Lord Smith’s Review will form an ambitious blueprint, and look forward to his recommendations next week.”

The call comes after the Bank’s Monetary Policy Committee voted for no change in fiscal policy this week, keeping interest rates at their record low of 0.5 per cent, and QE at £275 billion.

QE was last increased by £75 billion in October, but the Bank should be more generous with the available QE allowance in order to avoid a setback and to boost growth, says David Kern, chief economist at the BCC.

“Since the challenges facing the UK economy will increase in the first quarter of 2012, a further £50bn increase in QE to £325bn would be welcomed by hard-pressed businesses. An immediate increase in QE would strengthen confidence and help to contain sterling rises against the euro, at a time when we must maintain the competitiveness of our exports. Sterling has risen by some six per cent against the euro in the last three months and this puts unwelcome pressure on British exporters,” Mr Kern said.

Any increase should be coupled with effective credit easing measures, he adds: “But QE will only achieve its full potential to support growth if it is supplemented by effective measures aimed at improving the flow of credit to viable businesses. The government must swiftly implement its promised credit easing measures, and the Bank of England should play its full part in supporting such an initiative.”

But economists believe that markets may not be able to digest more QE at this stage, particularly because the last round is not due to finish until February. Howard Archer, chief economist at Global Insight said:

“There is belief within the MPC that the markets may have difficulty digesting extra QE at this stage. Holding back on more QE also gives the MPC more time to judge whether underlying inflationary pressures are easing, which some committee members believe is important for the Bank of England’s credibility before it goes further down the QE road.”

The Olympics may not have the positive effect that was promised according to a number of small businesses.

The latest ‘Voice of Small Business’ Survey Panel from the Federation of Small Businesses (FSB) has revealed that 62 per cent of small firms believe that the London 2012 Games will not have a positive impact on their business.

In fact, just seven per cent of the businesses surveyed believe the Olympics will benefit their business overall, while a worrying 25 per cent expect a negative impact on their business.

The FSB claims that the Government and Olympics Authorities should ensure that small firms are aware of the ways to benefit from the Games, particularly as they were sold on the basis that it would create a long legacy for the country.

Commenting, John Walker, National Chairman of the Federation of Small Businesses said: “It is worrying that 200 days before the Olympic and Paralympic Games are set to begin, small businesses think it will not benefit their business. This is even more worrying considering the London 2012 Games was sold on the basis of its legacy. We all know times are tough, but 2012 is a year of big events that small firms should be able to benefit from. The Government and Olympic Authorities must help show small businesses how they can reap the rewards from one of the biggest sporting and tourism events the country has seen for years.”

The study shows that people retiring this year expect to live on an average income of £15,500, more than £1,000 less than those who retired last year.

One in five of those due to retire this year will be forced to survive on an annual income of less than £10,000 due to inadequate retirement savings.

Commenting, Vince Smith-Hughes, Prudential’s retirement income expert, said: “The current economic climate has created the perfect storm for people in the run up to retirement. The impact of the credit crunch, banking crisis, recession, and concerns over the Eurozone, has been reflected in the fact that expected retirement income levels have hit a five-year-low.

“It is concerning that expected retirement incomes are going down, while pensioner expenditure is going up. However, there are some practical steps that workers and imminent retirees can take to ensure a more comfortable retirement. For those who are still working, it has never been a more important time to save into a pension. The longer that savings are invested in a retirement pot, the greater the opportunity they will have to grow.”

Contact us if you would like to discuss your retirement plans.

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Prime Minister David Cameron has vowed to ‘kill off’ the UK’s health and safety culture.

Speaking to small businesses and entrepreneurs at Intuit UK on Thursday, Cameron revealed plans to change the health and safety law on strict liability for civil claims so that businesses are no longer automatically at fault if something goes wrong.

He also announced that the Government will investigate the demands made by insurance companies on businesses to ensure that compliance does not force businesses to go over and above what is required by law just to secure insurance.

He said: “Talk of ‘health and safety’ can too often sound farcical or marginal. But for British businesses – especially the smaller ones that are so vital to the future of our economy – this is a massively important issue. Every day they battle against a tide of risk assessment forms and face the fear of being sued for massive sums. The financial cost of this culture runs into the billions each year.

“So this coalition has a clear New Year’s resolution: to kill off the health and safety culture for good. I want 2012 to go down in history not just as Olympics year or Diamond Jubilee year, but the year we get a lot of this pointless time-wasting out of the British economy and British life once and for all.”

Cameron also revealed that the current scheme that caps the amount that lawyers can earn from small value personal injury claims will be extended.

But his claims have been dismissed by the Trade Unions Congress (TUC) that has accused Number 10 of being out of touch with the reality of working life. Commenting, TUC general secretary Brendan Barber said:

“Workers will be astonished by the claim that there is an ‘excessive health and safety culture that has become an albatross around the neck of British businesses’. The truth is that there are two million people in the UK who have an illness or injury caused by their work – the vast majority of which could have been prevented had their employer had taken the correct safety precautions.

“It is clear that Downing Street does not have a clue about what life is like for the millions of ordinary people who work in shops, offices, schools, factories, call centres and other workplaces across the UK. Instead it is making policy in response to grumbles from elements of the small business lobby and the risible rantings of right-wing commentators.”

The figures show that activity and new business within the industry grew at the strongest rates since July.

The headline index from the survey posted a five month high of 54.0 in December, up from 52.1 in November, and boosting the gap above the benchmark of 50, which separates growth from contraction.

Commenting on the figures, Chris Williamson, chief economist at Markit said: “”The December survey rounds off a reasonable fourth quarter for the service sector, which is likely to again provide the main stimulus to overall economic growth. Services are likely to have expanded by around 0.3%-0.4% in the final quarter, down from 0.7% in the third quarter but offsetting a renewed downturn in manufacturing and sluggish growth of construction to help the UK avoid a slide back into recession, at least for now.”

The survey also found that business confidence remains low among service providers, as growth expectations slip and anxiety grows over the Eurozone crisis and austerity measures.

Williamson adds: “Uncertainty remains unusually high, and companies look to be hunkering down for a tough year in 2012. However, the upturn in services activity in December provides some encouraging news that the UK economy is showing some resilience among the many headwinds that it is currently facing.”

Employers are being urged to raise their ‘communications game’ to keep employees motivated and productivity flowing as pay freezes become the norm.

The Chartered Institute of Personnel and Development (CIPD), claims that two in five employers are failing to communicate the rationale behind their decision to raise, cut or freeze their employee’s pay.

But communication is key to ensuring that employees remain satisfied, claims the CIPD, as 2011 saw more pay cuts and freezes than in any year since 2008.

Commenting, Charles Cotton, rewards advisor at the CIPD said: “2012 looks like it will be another year of subdued pay rises for many in the private sector and pay freezes for most of those in the public sector. While inflation looks set to fall and personal allowances due to rise, these will not be enough to increase real earnings back to their pre-recessionary levels.

“The challenge for employers is to keep staff motivated at work while many employees see their living standards hit. Organisations should review how they communicate the economic realities the business faces and what needs to happen for pay to increase. Managers face a tough challenge in maintaining employee commitment and motivation but the penalties of failure will be falling national productivity and a vicious circle of continued declines in pay and jobs as we lose out to our international competitors