Efficient Energy 
With businesses continuing to struggle through these tough economic times, it would be beneficial for businesses to make changes in order to save money on energy bills that are continuing to soar. However, a new survey by British Gas Business has revealed that businesses are failing to take measures to reduce their energy costs by “ignoring energy efficiency”.

This news follows a warning from Centrica, the owner of British Gas Business, who said that energy bills are set to rise even further during the upcoming winter months. This is because its margins are being squeezed as the price of gas and power soars. Therefore, businesses should make changes now to avoid hard-hitting bills during the forthcoming winter.

The survey questioned 900 medium-sized businesses and found that 70 per cent are not currently carrying out energy efficiency measures, and one in three said they had no plans to carry out such measures in the future.

For those surveyed, energy bills represented almost a fifth of their annual operational running costs.

Following world events, such as the unrest in the Middle East and the earthquake in Japan, energy prices have already risen by 25 per cent in the last six months.

Even though energy prices are soaring, British Gas Business believes that the higher costs of energy did not “automatically” mean higher bills for businesses.

So what methods can companies use to ensure their energy bills are lowered, if high bills are not the fault of energy suppliers?

The survey found that 70 per cent of the companies had devices which allowed them to monitor usage and analyse data to control their consumption - these companies saw a return on their investment within 18 months.

If companies used devices such as this combined with employees making behavioural changes (i.e switching off unnecessary lighting and turning off plug sockets), British Gas Business said companies could expect to lower their energy bills by 10 per cent.

Help is also at hand from The Carbon Trust who is asking SMEs to use its online certification tool to recognise where they can cut their energy bills. And it would appear to be beneficial for small businesses to do so as the organisation claims small firms using the service had cut their energy costs by an average of £2,000 per year.

For more information, please visit www.milsted-langdon.co.uk

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Missing the Target 
Figures released later today are expected to reveal that the UK’s top five banks are not meeting their targets for lending to small businesses, which were set under the agreement with the Government’s Project Merlin scheme.

The figures, which will show if Barclays, Lloyds, HSBC, Royal Bank of Scotland and Santander are on target in lending the agreed £190 billion to businesses throughout 2011, will be published today by the Bank of England.

Back in February, in order to make funding more available for businesses that have been struggling during the economic crisis, the banks agreed that they would pledge £190 billion to British business under the Project Merlin agreement in 2011. This is compared with the £179 billion lent in 2010.

In the first quarter of 2011, lending is expected to collectively total £16.8 billion compared with the target of £19 billion, therefore a shortfall of around 12%.

Vince Cable last week said that he expected the banks to miss their lending targets and sent a warning to the banks that action would be taken by the Government.

“If the banks don't deliver, there are options open to the Government, including taxation,” he said.

However, the business secretary said that the banks would have the remainder of the year to increase their lending to meet the agreed amount under Project Merlin.

The Federation of Small Businesses says its members are continuing to struggle to get bank loans and other credit.

The Project Merlin deal was positive news for SMEs across the UK back in February. If the banks have not met their lending targets in the first quarter of 2011, let’s hope that the Government take action to ensure that these targets are met throughout the rest of the year and that funding is more readily available.

For more information, please visit www.milsted-langdon.co.uk

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Retail Overhaul  
This week it was announced that the Government has appointed retail guru, Mary Portas, to review the country’s high streets in a bid to decline rising shop vacancy rates and a move from consumers to spend in out of town shopping centres.

Apart from a general squeeze on consumer spending, highlighted by the Ernst & Young ITEM club report published on Tuesday, there is a move for shoppers to avoid shopping in town centres, as there is very little new or exciting to tempt them to spend their hard-earned cash.

This has led to a doubling of vacancy rates over the last two years and a plethora of chain stores and charity shops where independent stores used to thrive.

Figures released by the business department showed that more than a third of shops were vacant in the worst-hit town centres, such as Margate and Leigh Park in southeast England.

Town centres have also seen their share of total retail spending fall to 42 per cent last year from just under 50 per cent in 2000. Town centre sales grew 1.5 per cent from 2005 -10 compared with the 11.5 per cent increase enjoyed by out-of-town retailers.

"The high street should be at the very heart of every community, bringing people together, providing essential services and creating jobs and investment," Prime Minister David Cameron said. "So, it is vital that we do all that we can to ensure they thrive."

However, Portas will have her work cut out to rejuvenate high street spending and slow down the rate of ‘doughnutisation’ – the trend for shoppers to move out of the middle to out of town locations.

Since we have less to spend and busier lives, we are more likely to shop somewhere where we can get everything under one roof and make one trip in the car. It will be interesting to read her report, due out in the Autumn.

For more information, please visit www.milsted-langdon.co.uk

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Pensions Gap  
Male workers could retire with as much as 50 per cent more pension than their female counterparts, a survey showed yesterday. And while this might seem shocking news in the age of equality, at least the gap has narrowed from last year.

The Prudential’s Class of 2011 survey of people retiring this year found that the average retirement income gender gap is £6,500. The average woman retiring this year expects an annual income of £12,900 compared with an average male expected income of £19,400.

But the divide widens and narrows depending on where in the country you live and work. The gap between women and men's pensions is widest in the South West of England, where it is £11,700 a year. In this region, women retiring can expect an annual income of just £10,400 a year; while men can look forward to collecting £22,100.

Surprisingly though, in the South East, there is no gap at all – with both men and women retiring this year being on track to receive an average of £18,100. Experts said this was largely due to higher employment figures in this region.

Commenting on Prudential’s survey, Chief Executive of the National Association of Pension Funds, Joanne Segars said: “The big gap in retirement income between the genders is a serious issue, and the sums involved can make a huge difference to a pensioner's lifestyle. Sadly many women lost out on the chance to build their pension when they left work to start a family, and too many are reliant on their husband's pension.

“It's important that everyone has a pension in their own right. The gender gap may have narrowed slightly, but our society as a whole remains on a collision course with its retirement. Too many people are not saving, or are not saving enough. We have to get more people focused on putting something aside for their older age.”

For more information, please visit www.milsted-langdon.co.uk

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We Want More! 
In his sixth letter to the Chancellor since January 2010, Mervyn King, Governor of the Bank of England, warned that the rise in the cost of living may become so great that workers could begin to rebel against the lack of pay increases from their employers.

The letter to the Chancellor follows yesterday’s news of the UK inflation rate rising to 4.5 percent in April from 4.2 percent in March, a revelation from the Bank of England that took the City by surprise. A 4.2 percent rise had been forecast.

Mervyn King was forced to write a letter of explanation to the Chancellor as inflation has been a full percentage point higher than the Government target of two percent for three consecutive months. In the letter he also warned inflation was likely to continue to hit consumers for many months to come.

Workers’ standard of living would almost certainly be hit, he wrote, and many had been forced to accept a pay freeze or very modest pay increases.

Mr King wrote: “The continuing experience of high levels of inflation may push up on inflation expectations, or lead to some resistance to the erosion of real take-home pay. Either of these mechanisms could put upward pressure on wages and prices looking ahead."

Business groups believe that employees’ tolerance of the recession will dwindle and calls for pay rises to match the cost of living will be heard.

John Philpott, chief economist at the Chartered Institute for Personnel and Development, said: "If the employment market improves, employers will find it very hard to resist the calls for pay increases to make up for the increase in the cost of living. The Bank could possibly make things worse for many workers if it increases interest rates... because it would increase their mortgage payments, which could be the straw that breaks the camel's back. This could encourage demands for wage increases, fuelling inflation once again."

For more information, please visit www.milsted-langdon.co.uk

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