ISME and SFA in spat over pay rises

A spat has erupted between the two major lobby groups for the small-business sector with ISME accusing the Small Firms Association (SFA) of being out of touch with its members.

It follows remarks this week from the SFA that the soaring value of the euro against the dollar and sterling signalled the end to an era of excessive pay awards.

Rather than castigating the small-business community for raising pay, the SFA should confront cynical vested interests which have pushed overheads towards unsustainable levels in recent years, said ISME chief executive Mr Mark Fielding.

His comments follow the SFA's warning that Irish industry must bring wage inflation under control if it is to cope with the rising strength of the euro. One in four small companies were considering shedding jobs because the surging euro was harming sales to Britain and the United States while more than a fifth were tempted to source raw materials from the UK, Mr Fielding said.

Meanwhile, climbing insurance and utility prices were crippling many businesses, a problem the SFA appeared reluctant to acknowledge. "The association seems to be out of touch with many small businesses. They are asking companies to blame themselves for their current difficulties when the truth is that many other outside factors are at fault. The SFA is playing a game of smoke and mirrors," he said.

"Many small businesses will feel that the SFA does not understand their plight, particularly in regard to the crippling rises in the cost of insurance."

The SFA shrugged off the criticism, saying ISME was misinterpreting the comments, made at its conference on Wednesday. SFA chairman Mr Kieran Crowley had told delegates that firms needed to strip out fattened cost structures or risk liquidation.

Last night he stood over his remarks, saying ISME's criticisms were misplaced. "ISME would be better off examining the substance of our message rather than choosing to misunderstand what was said," he said .