Agency Workers Gaining Additional Rights 
New legislation coming into force on Saturday will see agency workers gaining additional rights in pay and benefits.

Agency workers will be entitled to similar rights to permanent staff, as of October 1, after they have completed 12 weeks of service in a temporary job role.

These include pay, overtime, shift allowances, holiday pay and bonuses attributable to individual performance, as well as maternity rights.

The rules are being brought in after long negotiations between unions and the Government.

Stefan Martin, an employment lawyer with law firm Allen & Overy, said: "It won't give them equal rights in terms of protection from dismissal."

"What it is going to give them is equal rights in relation to pay and other basic employment rights.

"It's going to be extra basic pay, [and] extra shift allowances potentially, where those workers are not paid at the same level as the equivalent permanent employee.”

Various legal protections are already in place for agency workers, which include the minimum wage and basic holiday rights. However, under the new European rules, agency workers will also be entitled to the use of the same facilities as staff.

From the first day of employment, they can use a creche, canteen or transport services. They will also be entitled to information about internal vacancies at the company they are working for, and to be given the opportunity to apply for them.

Business groups suggest the new rules will cost firms up to £2bn a year, with concern that the new legislation will lead to more red tape for already struggling small firms who depend on agency workers.

There have also been fears that some agency workers will simply be laid-off after 11 weeks so they do not benefit from the increased rights.

Agency workers, however, will not be entitled to all the same benefits, such as occupational sick pay, redundancy pay and health insurance.

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

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Don’t Cut Lending, Cut Bonuses 
The Bank of England’s Financial Policy Committee (FPC), the financial sector’s new super-regulator, yesterday advised banks to cut their dividends and bonuses in order to strengthen their balance sheets.

Following its second quarterly meeting, the FPC, which is due to take over from the Financial Services Authority, released the statement yesterday which also warned about the eurozone crisis being a risk to the financial stability of the UK.

The minutes from the FPC meeting recommended that banks "strengthen their levels of capital and liquidity so as to increase their capacity to absorb flexibly any future shocks, without constraining lending to the wider economy." It also stated that these efforts should include "ensuring that discretionary distributions reflected any reduction in profits".

The FPC also advised that banks should allow their capital ratios to run down in the event of an overseas financial shock, rather than attempt to protect their buffers by cutting lending.

However the Bank of England’s quarterly Credit Conditions Survey showed signs that the squeeze on domestic UK borrowers continues.

The survey said that the supply of secured credit to households increased slightly in the three months to September, however, lending to businesses remained low. And the findings also led the Bank of England to warn that “adverse wholesale funding conditions” might restrict future lending to the British economy.

In its statement, the FPC also suggested that it will need regulatory tools to carry out its works on ensuring financial stability in the UK. These would include powers to set maximum leverage ratios for banks and the authority to dictate maximum loan-to-value ratios on mortgage lending.

The FPC, which is chaired by the Bank of England's Governor, Sir Mervyn King, is currently an advisory body but it will gain formal powers once legislation, presently before Parliament, is passed.

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

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UK Not In Favour of EU Financial Tax Proposals  
A financial tax has been proposed by the European Commission, but the UK has said it will “resist” the financial transaction tax on EU members.

Under the proposals, the financial tax would be levied at a rate of 0.1 percent on all transactions between institutions when at least one party is based in the EU. The tax would raise about 57 billion euros a year and would begin from the start of 2014.

A spokesman for the UK Treasury said it would “absolutely resist” any tax that was not introduced globally.

“We would not do anything that is not in the UK's interests," the spokesman said.

In order to be implemented across the EU, the tax would need to be approved by the UK. But the commission said if the UK did not give the tax approval then it would look to having it implemented across the eurozone instead.

Commission president Jose Manuel Barroso said Europe was facing its “greatest challenge” and banks must "make a contribution".

The commission said the tax was “to ensure that the financial sector makes a fair contribution at a time of fiscal consolidation in the member states".

It also said that financial firms were “under-taxed” compared with other sectors, and that they had played a role in the current “economic crisis”.

The commission also stated that the "significant additional revenue" raised would contribute to public finances.

City of London officials have said that about 80 percent of the revenues of any Europe-wide financial tax would come from London.


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Labour to Launch Battle Against Bad Business 
Labour Party leader Ed Miliband will today criticise companies who have the “wrong values” by not creating jobs, invest in other companies or train their staff.

Mr Miliband will speak today at the Labour Party Conference, where he is expected to warn private equity firms and businesses believed to be “asset strippers” that they will face higher taxes under a Labour Government.

The Labour leader is also expected to tell the party’s conference that businesses would no longer be equally taxed and regulated. Firms would instead be judged by the ways in which they make their money.

Financial incentives would also be offered by the Government to businesses that behave responsibly and contribute to society.

Labour’s controversial plan is expected to receive its fair share of criticism, as ministers will have to defend their labeling of businesses as being either “good” or “bad”.

Mr Miliband is also expected to call for a “new bargain, based on a different set of values”.

He will tell the conference: “Let me tell you what the 21st-century choice is: are you on the side of the wealth creators or the asset strippers?

“For years as a country we have been neutral in that battle. They’ve been taxed the same, regulated the same, treated the same, celebrated the same. They won’t be by me.”

Mr Miliband will also propose reforms to the tax and regulation system to give incentives to businesses that “make a wider contribution to the economy”.

The City have often accused the Labour leader as being anti-business, and private equity companies will argue that they have enabled failing businesses to carry on employing people and adding to the economy.

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

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Tax Break for Entrepreneurs who Back Small Firms 
The Treasury is to announce a £100 million tax break for entrepreneurs who back Britain’s growing businesses in a bid to make the UK “the best place to start, finance and grow a business”.

In a move to expand the Enterprise Investment Scheme, the Chancellor George Osborne is expected to go ahead with the plans to “give a bigger tax break to those who take risks for growth”.

The measure was firstly unveiled in the Budget in March; however, the European Commission has only just given the scheme the green light.

The Government is keen to help small businesses with the potential to expand rapidly and the Treasury hopes the tax breaks will encourage greater investment in some of the UK’s fast-growing, smaller businesses. It hopes the measures will increase the amount of investment directed at the high-growth small business sector

The plan involves raising the income tax relief from 20 percent to 30 percent for EIS investments, backdated to April 2011, and doubling investor limits to £1 million in April 2012.

George Osborne said: "We want to make the UK the best place to start, finance and grow a business. These changes will give a bigger tax break to those who take risks for growth and jobs in Britain by investing in the small companies that have the potential to be fast growing."

Since being established in the 1990s, EIS has supported more than £11 billion of investment, Treasury figures have revealed. In 2008, during the worst recession since the Second World War, the EIS helped to raise £500 million for 1,800 small businesses.

The Chancellor is confident that the new measures will increase the amount of capital available to small businesses and will be an alternative option to bank credit.

As complaints mount over the failing of UK banks to lend to small firms, the Government is under pressure to improve the access to financing for small businesses.

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

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