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Sharp rise in small businesses contemplating staff layoffs

There has been a significant increase in the numbers of small firms that are looking at redundancies as a way of saving costs during the recession.

According to the Federation of Small Businesses (FSB), more and more employers are asking for advice on releasing workers.

The FSB said that calls from its members to its legal advice line, which provides help on employment issues, soared by 214 per cent in the final three months of last year to 8,200.

The FSB wants SMEs to be given more support in their efforts at tackling unemployment.

The business group’s own five-point employment plan includes: simplifying legislation; cutting payroll taxes; promoting part-time work; providing more opportunities for small businesses to bid for public contracts; and investing in training apprentices as solutions to rising unemployment.

Implementing such measures, the FSB argued, would not only keep people in jobs but would also create over 400,000 new ones.

John Wright, the FSB’s national chairman, commented: “Small businesses are being hit just as hard as big businesses in these difficult economic times as these worrying figures show. We cannot afford to lose our vibrant small and medium sized business sector.

“As we officially move into recession we must not forget that small businesses are the engine room of the economy and are actually in a key position to generate new jobs and avoid further redundancies. Small businesses are the sector to help pull us out of the recession and they need all the support they can get to do so.”