Social Chapter ‘will threaten small firms’

Design groups are among the companies that the Federation of Small Businesses says will suffer most from the introduction of the Social Chapter next year.

The FSB has called on the Government to exempt small businesses from the Social Chapter. It believes they have enough to contend with during the run up to the millennium and that implementing the measures before then will cause many to go bankrupt.

Last year 36 368 UK companies went bankrupt, a drop of 5000 on 1996. This is the lowest figure in seven years, according to research by the Dun and Bradstreet business information service. The figures have not been broken down by sector.

But the FSB fears this trend could be reversed if the proposed social measures are brought in.

“We estimate a lot of businesses will face problems in the run-up to the millennium with European Monetary Union and the millennium bug to deal with,” says an FSA spokesman.

The two main issues of the Social Chapter are the introduction of a minimum wage and parental leave for men as well as women. The minimum wage is unlikely to affect design groups much, says the FSB spokesman.

“But let’s say you have a design group with four people, the extension of parental leave to men could prove really tough and we urge the Government to exempt small companies from it,” the spokesman adds.