ONE IN TWELVE small businesses operate illegally and one in five have cut staff or stopped recruitin...
ONE IN TWELVE small businesses operate illegally and one in five have cut staff or stopped recruiting in a bid to cope with mounting insurance premium bills, writes the Scotsman.
Research published today by the Federation of Small Business shows that premiums for liability insurance - covering against potential claims by employees injured at work - have surged in the past 18 months as payouts have increased and as firms financial weaknesses have become more apparent.
According to the survey, about one fifth of small firms have seen their insurance premiums rise 100% or more this year.
This has left 20% cutting staff or stopped recruiting and about 8% has ended trading illegally by operating without cover, which is required by law.
Almost 25% of the small firms questioned said that it was either difficult or impossible to obtain a policy and many deemed that the mounting insurance costs had left them with no choice but to perform illegally.
AS SMALL FIRMS seem to be struggling, fears that the UK's economy has weakened mounted yesterday after reports indicated that most companies are cutting back investment and fighting to rebuild their profits after the recent collapse in share prices.
According to the Telegraph, this explains why the Bank of England's decided to cut interest rates to a 48 year low to 3.5% last week.
This comes as several recent surveys suggest a market decline. Grant Thornton survey shows that 58% of companies predict their business to either remain levelled or drop over the coming year, and Lloyds TSB latest research suggests that more than 2,000 businesses are abandoning their investment plans as profits decline.
Figures also show that 25% of companies are predicting that they will have to slice their investment expenditure, and one in two firms reported that they are not capable of increasing their spending.
Three out of four firms also say they won't be able to hire anymore staff, and almost every second company announced a drop in profits over the first half of the year.
ALSO REPORTED in the Telegraph is that a former civil servant has been appointed by the government's spending watchdog to scrutinise a £3.6bn government property deal, which he helped to set up.
Managing director of property consulting firm Faro John Mason has been hired by the NAO to investigate the sale of Job Centres to the UK's largest property company, Land Securities Trillium - an appointment which most certainly will create some stir in the City as he has worked for both parties.
Mason has previously worked both for the Department of Social Services - where he was crucial in the sale of its £2bn property portfolio - and for Trillium, where he worked as the managing director of business development.
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