'Drip-feed' order small firms hit by flight ban

Aircraft are beginning to travel once more in UK airspace, but business groups are warning that small firms have been hit particularly hard by nearly a week of grounded flights arising from the Icelandic volcanic eruption.

On Tuesday the Civil Aviation Authority, the UK's independent regulator, announced new guidelines to open up airspace, after manufacturers agreed on increased aircraft tolerance of low-concentrations of atmospheric ash.

However, companies have had to put contingency plans into action due to the UK's reliance on air freight and 'just in time' deliveries, CBI deputy director-general John Cridland said.

Over the last week some businesses have been able to re-route their goods over land or sea. But while Tesco chief Sir Terry Leahy told the BBC of the supermarket's ability to fly Kenyan fruit and flowers to Spain then drive it by lorry to the UK, there are nevertheless reports of food rotting away in warehouses around the world.

And despite big business having the capacity to make such contingency plans, smaller companies have not had this option, according to Federation of Small Businesses spokesperson Stephen Alambritis.

"Small firms haven't got the luxury that large companies have, of ordering in huge bulk and storing it," he told BBC News.

"Small firms order on a drip-feed basis, on a daily basis.

"And if those goods aren't coming in - and let's not forget they've already been paid for - then that's very, very difficult for small firms, [and] could land them in trouble with their customers and with their bank."

Alambritis also underlined the possibility that the disruption could cause cash flow problems for small firms.

"There is huge concern that it will be hard for people to put money into the bank, as well as putting their reputation at stake and making it hard to attract new customers," he told the Guardian.

In addition, he suggested that small companies could be left in the situation of missing a VAT payment if the responsible staff remain stranded abroad, arguing that HM Revenue and Customs should be understanding about late payments.

"If a taxpayer is stranded and not able to return their quarterly tax form on time ... it should be treated as a reasonable excuse," he added.

Meanwhile, TUC general secretary Brendan Barber urged employers to show leniency and not penalise staff who have been stuck abroad because of "events outside their control".

Employers are not obliged to pay staff for days they do not work, and employees stranded oversees outside of booked holiday are technically on unauthorised leave - meaning they would not normally be paid. Employment lawyers have suggested that one way around this is for firms to deduct the extra days' absence from employees' existing holiday allowance, allowing them to still be paid.

Barber said: "We would ask bosses to be sympathetic to the plight of their employees and be flexible in their approach to resolving the situation.

"Docking wages is an extreme reaction.

"In situations where staff have run out of leave, it would seem fairer to come to some arrangement of allowing employees to use leave days from the following year, if employers are not prepared to allow staff extra time off."

IMAGE AP Photo/Michael Probst

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