Business news bites


New rules for switching

Consumers who run up arrears on their electricity or gas bills and then switch to another operator before settling their accounts could find it harder to change provider under new rules. The energy regulator last night confirmed it had decided to bring in a new system of “flagging” any gas or electricity account where there were arrears.

This is likely to put a stop to so-called debt-hopping by customers who switch to other providers before settling their existing bills. If someone runs up a bill with one operator and then tries to change supplier before paying the arrears, the operator they want to switch to will be able to refuse to take them on, the regulator said. This is because the new “debt flagging” system will make it obvious to all utility companies if someone has run up arrears on their electricity or gas account.

Redundancies at RTE

RTE has announced a voluntary severance package to cut at least 70 jobs which would save the broadcaster €5m per year. The state broadcaster is confident the package, which it describes as “fair, prudent and realistic”, will meet the redundancy targets that it needs to break even by 2013. The redundancies will bring the number of RTE staff down to less than 2,000. It was more than 2,300 at the height of the boom. The figure of 70 is a minimum one and management in RTE will accept more redundancies if the uptake is in excess of that. The package will allow staff to claim six weeks per year of service up to a maximum of 130 weeks. It is particularly tailored to those coming up to retirement. Those over 55 will receive an ex-gratia lump sum of up to €60,000 depending on age.

Germany backs rate cut

Ireland has received the backing of Germany for a 1pc rate cut on the EU portion of the €67.5bn bailout loans. Tanaiste Eamon Gilmore held talks with German foreign minister Guido Westerwelle in Luxembourg, after which a spokesperson said the Germany is backing Ireland’s call for a reduction in the interest rate payable on the bailout funds. The government has sought a 1pc reduction in the interest rate, a call blocked by France which is insisting that Ireland raise its 12.5pc corporation tax rate as a condition to any changes to the bailout terms.

Irish labour costs fall more than 2pc

The cost of labour to Ireland’s employers fell by more than 2pc last quarter, according to EU statistics agency Eurostat.
Only Greece (-6.8pc) and Ireland (-2.2pc) saw a fall in labour costs per hour in the first quarter of 2011, while the 27 EU member states saw an average increase of 2.6pc. The largest drop in wages was in the construction sector, which saw an 11.6pc drop in wages – 10.9pc in overall labour costs – compared to a 1.1pc decrease in the previous quarter.
The overall cost of labour takes into account wages, including overtime and bonuses, and non-wage costs such as PRSI and other taxes charged to employers. The cost of wages nationally fell by 2.6pc, while the other costs of employing staff increased by the same amount. The largest increases were seen in Bulgaria (7.8pc) and Hungary (5.6pc).