BAD News
For the better informed business adviser
31 May 2005 - Issue 22
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News round up
Major review of small business finance
A major survey of small business finance in the UK carried out by Warwick Business School and the Bank
of England in 2004 has revealed that almost 40% of small firms are located in the south east of England.
Two-thirds are sole traders, and although around a quarter of business owners have a university degree,
almost a third have only basic qualifications or none at all. The report offers a great deal of detail about
small business use of credit cards, overdrafts, term loans and grants, as well as exploring the role of
banks and hire purchase.
The report can be viewed at:
http://www.wbs.ac.uk/downloads/research/sme-report-may-2005.cfm
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Taking a risk on red tape
Chancellor Gordon Brown has announced a campaign against red tape, advocating a "risk-based"
approach to new legislation which promises to reduce the number of Government inspections and form-
filling required from businesses. A new quango - the Better Regulation Executive - has been established;
it will be led by an appointee from business, and is intended to steer the necessary reforms.
You can read about the Chancellor's plans at:
http://www.gnn.gov.uk/content/detail.asp?ReleaseID=157302&NewsAreaID=2&NavigatedFromSearch=Tr
ue
And there is more about the Better Regulation Executive at:
http://cabinetoffice.gov.uk/regulation/about_us/index.asp
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Legal updates
New campaign to explain competition law
The Office of Fair Trading (OFT) has launched a campaign to increase awareness of competition law,
and particularly the 1998 Competition Act, among small businesses. Although there is awareness of the
obligations the Act brings, the OFT believes that not enough businesses have taken action to comply with
the legislation, which aims to prevent price-fixing and monopolies. It is also keen for businesses to use
the law to their advantage.
For an outline of the campaign, see:
http://www.oft.gov.uk/News/Press+releases/2005/92-05.htm
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Deaf awareness training to help firms comply with law
The Royal National Institute for the Deaf (RNID) has developed a series of awareness courses for small
businesses to help them understand their obligations to people with hearing difficulties under the
Disability Discrimination Act 1995 (DDA). The training is available to firms with fewer than 250 employees
and an annual turnover of less than £11.2 million.
More about the RNID training is at:
http://www.rnid.org.uk/mediacentre/press/2005/?ciid=271642
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Possible new powers for Patent Office
The UK Patent Office has launched a consultation on proposals to implement new powers which would
enable the Office to give its opinion on the viability of potential patents and cases of possible patent
infringement. The rights would be granted under the Patents Act 2004, and the consultation covers other
provisions under this Act that will require changes to existing patents regulations.
Download the consultation at:
http://www.patent.gov.uk/about/consultations/patact2004/patopinions.pdf
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Patents Directive under the microscope - again
Meanwhile, the European Parliament's legal affairs committee (JURI) is considering 256 proposed
amendments to the controversial draft Directive on computer-implemented inventions. The Parliament will
then consider the draft again in a second reading which is due to end early in July with a Parliamentary
vote. The proposed changes aim to limit the scope of the new law.
More information is available at:
http://www.out-law.com/php/page.php?page_id=patentsdirectivepr1114171332&area=news
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Tax and money
Insurance hikes could spell danger for firms
A change to the law could end up damaging small firms, according to research by Bibby Financial
Services. There are concerns that the introduction in April this year of the Health and Social Care Act,
which gives the NHS powers to claim treatment costs for injury where firms have been proved negligent,
could lead to a hike in liability insurance premiums. The Bibby research found that more than two-thirds of
business owners believe that such a hike would put them out of business. Firms are urged to reduce the
likelihood of this by ensuring they have effective health and safety policies in place.
There are more details at:
http://www.chamberonline.co.uk/Yci4FcloHMvRUA.html
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Banks to reduce cheque clearing times
An agreement to reduce cheque clearing times has been reached with the high street banks, reports the
OFT. Following pressure from the Bank of England, the Association for Payment Clearing Services
(APACS) has set up an investigation into how to reduce the time from the current three days to only one.
But the industry still believes it will take two years to carry out the changes.
The OFT has more information about the proposals at:
http://www.oft.gov.uk/News/Press+releases/2005/94-05.htm
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Home businesses are not properly insured
Business owners who run their ventures from home, and firms which allow staff to work from home, are
risking expensive items such as laptops, printers and fax machines by not having the correct insurance
policies in place. Many businesses which allow home working do not have a home workers insurance
policy, falsely believing that equipment is covered by employees' own home contents policies. Insurance
industry spokesman Martin Nugent said: "All too often, businesses don't find out they're not covered until
they try to make a claim and end up out of pocket."
Read more about this at:
http://www.fpb.co.uk/YfRPXkE.html
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IT
Browser wars gather pace
Last week saw Netscape launch the new edition of its Netscape 8 web browser, amid a flurry of hype
which claimed it offered superior security, including anti-phishing and anti-spyware features. However, the
software firm was embarrassed when it had to release a patch for the browser within hours of its launch.
Meanwhile Microsoft, whose Internet Explorer (IE) browser still commands around 90% of the market, has
unveiled plans to base the next version, IE 7, around 'tabbed browsing' technology made famous by IE's
main rival, the Mozilla Foundation's Firefox.
Read more about Netscape's v8 browser at:
http://www.computerweekly.com/articles/article.asp?liArticleID=138681&liFlavourID=1
Further details about Microsoft's IE 7 browser are at:
http://www.microsoft.com/windows/IE/ie7/default.mspx
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Banks join forces to beat phishing
NatWest, Halifax and Barclays banks have joined forces in an industry initiative to combat phishing. Their
plans involve delaying transfers between account holders within the same bank by up to a day in order to
introduce new security checks and validation procedures. It is hoped that these checks will help banks to
spot unusual transactions, as well as thwarting the common phishing tactic of using a UK-based
intermediary to transfer funds before sending the money overseas. Phishing cost British banks an
estimated £12 million last year.
Read more about the initiative at:
http://www.theregister.co.uk/2005/05/24/phishing_mules_security_checks/
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Hackers blackmailing users with new Trojan
A new Trojan, dubbed Pgpcoder, encrypts users' PCs when it attacks, forcing them to pay a ransom to
the hackers responsible if they want the information held on their machines unlocked. The attack is
launched when a user visits a malicious website, and exploits a flaw in Microsoft's IE browser. The Trojan
sends infected users a ransom note requesting $200 (£108) to unlock their machine. Anti-virus firms are
urging users to download Microsoft's patch immediately.
Anti-virus firm McAfee has details about Pgpcoder at:
http://vil.nai.com/vil/content/v_133901.htm
Microsoft's latest security update is at:
http://www.microsoft.com/security
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'Hostile profiling' is new attack trend
Anti-spam solutions firm Blue Security is warning of a new trend in spamming and phishing attacks,
known as 'hostile profiling'. Attackers exploit websites that use e-mail addresses as a way to identify
users. By analysing the websites visited, they can build up a detailed profile of the user in terms of
hobbies, political views, buying preferences and even health information. This information is then used for
targeted spam and phishing attacks. Blue Security found that a large number of websites, including the
US top ten, are vulnerable to this type of attack.
Read more about this at:
http://www.spamdailynews.com/publish/Hostile_Profiling.asp
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Instant messaging out of control
A new YouGov study of more than 2,000 UK businesses has revealed that 20% of people use instant
messaging (IM) at work, but 62% of firms are at risk because of failing to manage these systems. 25% of
people admitted saying something in an instant message that their boss would not approve of, while 16%
had used IM to send or receive sensitive business information or documents. A further 25% used IM to
gossip about colleagues, and others used it to download music and movie trailers, chat with friends and
send pictures.
The results are summarised at:
http://www.workplacelaw.net/display.php?resource_id=5813&keywords=
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Health and safety
Leadership vital in preventing accidents
Company directors play a vital role in health and safety and their involvement can benefit both workers
and the business, according to the Health and Safety Executive (HSE). The HSE has released a number
of case studies illustrating the importance of director leadership on health and safety matters. However,
research from the HSE shows that almost a third of organisations do not have board level arrangements
for health and safety.
There are more details at:
http://www.hse.gov.uk/press/2005/e05065.htm?hseid=aHR0cDovL3d3dy5oc2UuZ292LnVrL3ByZXNzL3B
yZXNzLmh0bQ==
The case studies can be found at:
http://www.hse.gov.uk/corporateresponsibility/casestudies
The HSE has also launched a new website about 'sensible' health and safety, focusing on the importance
of risk management:
http://www.hse.gov.uk/sensiblehealthandsafety/index.htm
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Moving Goods Safely initiative hits London
A new London initiative to improve health and safety is set to be rolled out to the rest of the country in
2006-7. The 'Moving Goods Safely' (MGS) project involves the HSE and London's local authorities, and
aims to reduce injuries arising from the movement of goods through a system of inspections of retail
premises, warehouses, wholesalers, manufacturers, hauliers and home delivery firms. Events and
seminars accompany the project to help raise awareness of risks.
Read more about this at:
http://www.hse.gov.uk/movinggoods/index.htm
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Retail and sector news
Newspaper changes could damage small shops
The OFT has issued its opinion on whether exclusive distribution arrangements between newspapers and
magazine publishers and wholesalers comply with competition law. It has tentatively concluded that the
existing system, whereby distributors have exclusive rights to deliver magazines in a certain region, is
anti-competitive and should be opened up to the wider market. Newspapers, however, would continue to
be exempt. The publishing industry is concerned that large retailers would "hoover up the best deals" if
the ruling was made law, potentially putting smaller newsagents out of business.
Read the OFT's draft ruling, which is under consultation until 17 June, at:
http://www.oft.gov.uk/News/Press+releases/2005/88-05.htm
Reaction from the Newspaper Publishers' Association is summarised at:
http://media.guardian.co.uk/site/story/0,14173,1488448,00.html
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Councils get cash to improve food safety
UK local authorities are to receive a £10 million package of grant funding from the Food Standards
Agency (FSA) to help them promote a new initiative to improve food safety standards. The 'Safer Food
Better Business' (SFBB) campaign aims to help catering businesses comply with new food safety
legislation that will come into force in January 2006. They will be offered information factsheets, a diary to
help with record keeping, and advice on good hygiene practice.
The FSA has more about the initiative at:
http://www.food.gov.uk/news/newsarchive/2005/may/sfbbannounce
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Surplus stock costs retailers dearly, says eBay
A recent survey by online auctioneer eBay found that 49% of small retail businesses are regularly being
forced to sell at a discount due to over-ordering on stock. eBay estimates that the average business is
losing £3,700 a year by being forced to discount in this way. UK eBay recently launched a business
registration facility to enable firms to sell excess stock on the site. The UK site's small business manager,
Azita Qadri, said: "Trading on eBay.co.uk is a great way for small retailers to shift their excess stock,
rather than selling it at a loss."
More from eBay is at:
http://pages.ebay.co.uk/community/aboutebay/news/pressreleases/trade/4_27_2005.html
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Growth in convenience shopping predicted
Convenience shopping will show strong growth over the coming five years, according to the Institute of
Grocery Distribution (IGD), achieving a combined annual turnover of £32 billion by 2010. Many stores
have joined symbol groups such as Spar, but a "hard core" of independents will continue to account for
46% of stores and 27% of sales over the next five years.
You can read more about IGD's findings at:
http://www.igd.com/CIR.asp?menuid=9&cirid=1626
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Fresh health and safety advice for catering sector
The HSE has revised its guidance for caterers to help businesses prevent accidents and meet legal
requirements. The advice focuses on the dangers of slips and trips, urging businesses to keep work
areas uncluttered and dry. It also highlights the importance of cleaning up spillages and maintaining floor
surfaces.
'Preventing slips and trips in kitchens and food service' can be downloaded from the HSE website at:
http://www.hse.gov.uk/pubns/cais6.pdf
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'Contracts must be fair' regulator warns businesses
The Financial Services Authority (FSA) has unveiled a new set of standards that must be met by financial
service firms when writing contracts for products or services. The group has issued a statement of good
practice to help make sure that contract terms are fair for customers. The FSA highlighted variation
clauses - which let businesses vary charges once a contract has been signed - as an area of particular
concern.
To see the code of practice, go to:
http://www.fsa.gov.uk/pubs/other/good_practice.pdf
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Late applications could lose pubs their licences
Small businesses that sell or serve alcohol, including pubs, bars, restaurants and convenience stores,
and wish to extend their opening hours under new legislation, risk losing their licences just before the
Christmas and New Year rush due to late applications. The Local Authorities Co-ordinators of Regulatory
Services (LACORS) and the Local Government Association (LGA) have released new figures which
indicate that fewer than 5% of applications expected by local authorities have actually been received,
even though the transition period for implementation of the Licensing Act 2003 ends in November.
Read more about this at:
http://www.atcm.org/news/info.php?refnum=140
Meanwhile, an independent panel has been set up to ensure fees under the Act are set at a fair and
reasonable level. More details are at:
http://www.culture.gov.uk/global/press_notices/archive_2005/dcms070_05.htm?month=May&properties=
archive_2005%2C%2Fglobal%2Fpress_notices%2Farchive_2005%2F%2C
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Regional news
New phone number for London
This summer will see the introduction of a new phone number prefix for businesses in London. '020 3' will
be introduced in addition to 020 7 and 020 8, and will apply to any business that installs a new line from
the end of this summer onwards. This could result in firms having two different codes, which some
businesses have complained may be confusing for customers.
More details are at:
http://news.bbc.co.uk/1/hi/england/london/3889351.stm
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Useful publications and services
Comprehensive guidance on direct mail
The Direct Mail Information Service (DMIS) has published a comprehensive guide to direct mail. The
guide covers how to set direct mail apart from the competition, budgeting for the costs involved, planning
a mailshot campaign, common questions, myths and pitfalls, and how to measure response rates.
The guide is available to download free of charge from:
http://www.wiseloveys.f2s.com/Guide/direct_mail_media_pack.pdf
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UK economy at a glance
Chang Chang
Change
Indicator Value e on e on
on year
week month
4986.3 +
FTSE 100 + 14.5 + 563.6
0 184.6
£ against - -
1.8172 - 0.67%
US $ 0.33% 4.98%
+ +
£ against € 1.4743 - 2.67%
0.41% 0.59%
UK inflation 1.9% + 0.3% + 0.3% + 0.7%
UK interest
4.75% None None + 0.50%
rates
* Figures are as at midday on 31 May 2005
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