Lock-down starts – business news 5 November 2020.
James Salmon, Operations Director.
Lock-down starts and business goes remote, BOE to launch further QE, Service sector slows and a new report highlights the importance of SMEs. Plus covid-19, market and other business news.
Here are CPA we want to share the business news stories we have seen that we think will affect our members and readers. Many of us are busy fighting to protect our businesses and therefore might have missed some of the news that could impact small businesses, their owners and those that sell on credit.
Sorry there was no post yesterday but due to circumstances outside our control, it was not possible to prepare a news summary.
Business goes remote as lock-down starts
With England today entering its second nationwide coronavirus lockdown, the Telegraph looks at the measures the business world is taking, noting that many firms that had started to return staff to offices in recent months will once again ramp up remote working. The paper highlights that PwC “has been a proponent of offices during the crisis”, with around half of its 22,000 people in the UK having returned to the office at least once in recent months. BDO says it expects offices to be shut until at least December 2, saying it will close its 16 English sites today and tomorrow while it reviews the Government’s final guidance. Deloitte, it is noted, is set to permanently close four offices and require about 500 staff to work from home permanently.
BoE set to launch further QE
The Bank of England is expected to launch a fresh round of quantitative easing (QE). The measure, set to be announced today, comes with Britain facing a double-dip recession, with Samuel Tombs, chief UK economist at Pantheon Macroeconomics, warning: “Hopes of a V-shaped recovery are dead and buried.” Experts predict that, having already cut interest rates to a record low of 0.1%, the Bank’s Monetary Policy Committee will opt against a move toward negative rates, instead choosing to roll out further QE worth £100bn. This would add to the £300bn of emergency cash created through QE since the outbreak of COVID-19. While analysts say the Bank is unlikely to move toward negative rates at this point, PwC economist Hannah Audino said policymakers “continue to flirt with the idea” of taking them below zero.
The quantitative easing measures announced by the Bank of England today will be welcomed by businesses across the UK as the latest COVID-19 measures come into effect. SMEs in particular will welcome the news that the Bank of England is predicting that we will avoid another recession and that the deadline to apply for the Government’s Bounce Back Loans Scheme has been extended. However, businesses should look to capitalise on the measures put in place to structure their debt and ensure they are resilient in the face of the upcoming adversity to the sector.
SMEs have shown a great deal of adaptability and resilience in the face on changing consumer behaviour and as such it is critical that economic and monetary stimulus in tandem with government schemes work in partnership with lenders to continue to support the sector so that we can return to pre-crisis growth levels as soon as possible. We are determined and absolutely focused on working with these companies to protect those robust businesses operating in sectors that are resilient and ultimately will grow stronger
LSE report: SMEs vital for recovery
The London Stock Exchange Group’s 1,000 companies to Inspire Britain report says SMEs will be crucial in rebuilding the economy, post-coronavirus. The annual report, which examines the economic environment facing smaller businesses, shows that between them the 1,000 firms listed recorded an annual average revenue growth rate of 41.2%. The report also notes that the firms generated more than 42,000 jobs in the two years to December 2019. London Stock Exchange Group CEO David Schwimmer says the report “highlights the vital role of SMEs in driving economic growth, leading innovation and providing jobs across the UK.” Dr Adam Marshall, director general at the British Chambers of Commerce, says that while the pandemic will make pressure for SMEs “acute”, the crisis presents the UK “a historic opportunity to recast the UK business environment”. “Disruption for some will mean opportunity for others,” he adds.
Labour calls for six-month economic plan
Labour has called on Chancellor Rishi Sunak to provide a six-month plan designed to help Britain navigate the economic challenges brought about by the coronavirus crisis. With Mr Sunak, who has vowed to “do whatever it takes” to protect jobs and businesses during the pandemic, having confirmed an extension of the furlough scheme as England nears its second national lock-down, shadow Chancellor Anneliese Dodds accused him of “very panicked, last-minute decision-making.” Ms Dodds told BBC Radio 4’s Today programme that businesses need certainty so as to avoid a jobs crisis, “not endless chopping and changing by a Chancellor who is always playing catch-up.” She also accused Mr Sunak of a “stubborn refusal to address problems of his own making until the last possible minute”.
Businesses urged to plan for the unexpected
Johnston Carmichael has advised firms that ongoing uncertainty makes cash flow management and access to sufficient funding a priority, adding that scenario planning is crucial to help “prepare for the unexpected”. The firm’s finance director Alan Hamilton comments: “Business resilience planning has never been more important”. The Credit Protection Association has been assisting businesses to improve their cash flow for over 100 years.
Services sector recovery slows in October
The IHS Markit/Cips services purchasing managers’ index (PMI) was down to 51.4 last month, from 56.1 in September. The measure of the services sector, which accounts for three quarters of economic activity, shows a slowdown in its recovery and marks the slowest monthly growth since June. Tim Moore, IHS’s economics director, said the service sector was “close to stalling” even before the latest lockdown announcement, adding that the economy “seems on course for a double-dip recession this winter and a far more challenging path to recovery in 2021”. Pantheon Macroeconomics economist Samuel Tombs said the data suggests the recovery “essentially ground to a halt in October”, adding the impact will be seen in lower GDP growth. The EY Item Club forecasts that there could be a GDP contraction of 5%-8% in Q4, with chief economic adviser Howard Archer saying there seems “little doubt” that the national lockdown will cause the economy to contract, “and, very possibly, by an appreciable amount.”
Job vacancies decline in October
A report by KPMG and the Recruitment and Employment Confederation shows that employers are cutting back on permanent hiring amid increasing economic uncertainty surrounding the coronavirus crisis. Demand for permanent employees fell in October, having risen in September. The KPMG-REC index for permanent placements last month fell from 56 to 48.8 on an index where a reading below 50 indicates that vacancy numbers are shrinking. The index for temporary hires saw an increase, however, climbing from 56 to 56.5 in October. The survey was conducted in the two weeks before the Government announced a nationwide lockdown in England. Lames Stewart at KPMG warned that the lockdown “puts the UK jobs market in a precarious position,” adding: “While the furlough scheme extension may give a brief respite, it will fuel economic uncertainty and further dampen prospects for jobseekers, hitting hiring activity hard . ”
Government urged to help small retailers
Blick Rothenberg has claimed that small retailers should receive 75% of last year’s takings to help them through the festive period, mirroring an approach taken in Germany. The firm’s Mark Hart said the latest lockdown measures are going to “hit small retailers hard just when they were just starting to get their businesses back in shape”. He added that by guaranteeing three-quarters of last year’s income, ministers would give firms the resources to pay rent, salaries and other outgoings. Without support, he added, “many of them will not be around to trade at all in the new year”.
Covid-19 general news
The UK reported 25,177 cases on Wednesday (total 1,099,059) with 685,295 worldwide taking global cases to over 48 million as deaths reached 1,226,915
Daily covid deaths worldwide set a new record of more than 10,000, while global infections passed 600,000 in a day for the first time as the pandemic gathered pace,
With reported deaths (492 yesterday bringing the total to 47,742) from covid-19 at their highest level since May, England returns to lock-down from today. Non-essential shops and pubs will shut and people must stay at home where possible, though this time schools will stay open. The measures will further weaken a suffering economy. Credit Suisse, calculate Britain’s GDP will shrink by 5% this quarter, and by 11.8% over the year 2020. The Bank of England is expected to announce 150 billion in monetary stimulus today. The Bank’s QE has helped keep down the cost of the governments record borrowing. Ten-year bonds yield just 0.2% a year, although the cost of the covid support schemes have pushed government debt to 103.5% of GDP. A percentage that will only increase.
On the same day that Americans went to the polls to cast their vote for president, the number of new covid cases in the country reached 91,636. Yesterday they became the first country to surpass 100,000 new cases in a day.
Prime Minister Boris Johnson reassured businesses that the new lockdown in England will end on 2nd December during a speech to the CBI, but later said it would “depend on us all doing our bit”. Johnson announced a new month-long lockdown at the weekend. It will come into place tomorrow and will see pubs, restaurants, gyms and non-essential shops close.
Covid-19’s resurgence forced Italy to shut down Milan and the rest of Lombardy, the region worst battered in the spring.
Denmark decided to cull 17 million minks living in fur farms, after the animals were found to have infected humans with a new mutation of the virus.
Markets.
Stocks have rallied following the election and they appear to be responding positively to the news that although the Democrats look likely to have won the presidency, they seem unlikely to win the senate in the so called big blue wave and as a result, the senate will be able to moderate some of the more market unfriendly ideas proposed by democrats.
Brexit
The UK and European Union have so far failed to reach agreements on the three most contentious issues in their ongoing trade talks, both sides said, as Brexit talks continued this week. The pair have not been able to reach agreements on fisheries, the so-called level playing field, and settling future disputes between Britain and the EU.
Gender pay gap at 15.5%
Data from the Office for National Statistics (ONS) shows that the gender pay gap among all UK employees has fallen to 15.5% in 2020, down from 17.4% in 2019. Among full-time employees the gap was 7.4% in April 2020, down from 9.0% in April 2019. The ONS says that the reduced pay gap can be attributed to the fact that more men than women have been placed on furlough during the coronavirus pandemic, with 12.5% of men furloughed with reduced pay in April 2020 compared to 10% of women. Commenting on the report, Sam Smethers, CEO of gender equality campaign group the Fawcett Society, said that while a narrowing of the pay gap is positive, “we only have a partial picture because the impact of coronavirus means a quarter of employers are missing from the data set.” The ONS figures also show that more than 2m people earned less than the statutory minimum wage in April, with the lowest paid the most likely part of the workforce to be furloughed.
Airports face £300m hit from tax shake-up
A new poll suggests Government plans to end tax-free shopping after the Brexit transition period will cost airports £300m every year. A survey of the 20 biggest members of the Airport Operators Association shows that scrapping duty-free shopping will see them each lose an average of £15m annually. Heathrow has filed a pre-action notice in a legal challenge to halt the tax change, with tax refund specialist Global Blue supporting the airline.
Supermarkets face calls to repay rates
Callum Jones in the Times on Wedneday says supermarkets are under mounting pressure to pay back £3bn in business rates, with retail entrepreneur Julian Richer questioning why grocers have seen their bills waived as part of coronavirus crisis support measures despite strong demand from consumers and surging sales during the pandemic. Mr Richer praised the 100% discount on business rates for this financial year for stores forced to close due to lockdown restrictions but says it makes little sense for supermarkets that have “got customers queuing around the block”. The Confederation of British Industry has urged companies that had received taxpayer cash they did not need to “come together” and repay it. Deputy director-general Josh Hardie said: “It’s very difficult to make these decisions. It’s up to individual firms. I wouldn’t try and put any blanket rule on it,” but added that perhaps f irms who didn’t need or didn’t use the money should consider giving it back to the state.
Country house prices hit four-year high
Analysis from estate agent Knight Frank shows that demand for country houses in the UK has driven prices to a four-year high, with average asking prices up 2% in Q3 compared to the previous three months. Compared with the third quarter of last year, prices rose by 2.3%, the highest annual growth rate since March 2016. The figures show that prices for country homes valued at less than £1m rose by 1.8% quarter-on-quarter, while those valued at more than £1m saw growth of 2.3%. Houses valued between £3m and £4m saw values climb 2.9%.
London climbs property investment rankings
London has climbed from fourth to second in a league table of European cities with the most attractive property investment and development prospects. The survey, by PwC and the Urban Land Institute, saw London rank behind Berlin as the top city in which to invest. Investors polled said London was boosted by good liquidity and Brexit-related pricing discounts relative to continental markets. Gareth Lewis, real estate director at PwC, said: “It’s clear that, at this time of significant uncertainty, investors continue to see Europe’s core cities as safer bets and there remains cautious optimism.”
LionRock steps into Clarks
A £100m rescue deal will see the family that founded Clarks lose control of the shoe retailer for the first time in its 195-year history. Hong Kong-based private equity firm LionRock Capital is set to become Clarks majority shareholder in a deal that will see the chain go ahead with a CVA. The firm said the CVA, which is being handled by Deloitte, should allow it to keep all 320 stores open and pay no rent on 60 sites, with the remaining branches expected to pay rent based on turnover.
HMRC makes arrests over support-scheme fraud
HMRC has announced that three people have been arrested on suspicion of fraud in connection with the Government’s Eat Out to Help Out discount scheme. Meanwhile a further three arrests were made over fraud related to Bounce Back loans worth £145,000. Kath Doyle, deputy director of HMRC’s fraud investigation service, commented: “This is taxpayers’ money, and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.”
Don’t let Covid-19 bust your business!
It will if your cash flow dries up, either sooner or later.
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for sometime to come.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. Above all tactfully, because maintenance of goodwill is paramount.
To meet the needs of creditors in the current crisis, we have designed a “critical care” package especially tailored for the situation.
- The annual package costs start at very low rates
- A minimum performance warranty is provided
- Several complimentary services included
Clients instruct CPA on-line via their PC or phone, completely user-friendly. Your late paying customers are told to pay you direct (not to us).
A very recent report shows a 23% increase in the number of unpaid invoices since March 11th THIS YEAR – are you getting a build-up of late payers?
Right now, overdue accounts must be a concern and CPA has a great track record of encouraging slow-payers to pay their suppliers quickly.
It takes less than 17 minutes to see how you would benefit, do you have the time now?
No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
Do you sell on credit?
With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.
Those customers will look for the easiest option to boost their cash-flow. Don’t let it be you.
You can’t just assume your customers can and will pay you eventually, no matter how big their name is.
It is essential to have credit management systems in place to monitor and check your customers credit worthiness.
It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply on credit, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
You might be hesitant about contacting a debt collection agency. What are they going to be like?
Can they help your particular type of business?
There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.
Debt collection agencies are not all alike.
Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!
At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.
The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.
We are polite, firm and efficient when it comes to recovering outstanding debt.
“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire
“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs, with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
You put up with the PAIN – now claim the GAIN!
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Did you know that your business is entitled to a minimum of £40 for every commercial invoice paid late to you over the past 6 years?
How many of your invoices are paid late each month – 20, 50, 100 or more?
At £40 per invoice that’s claim of £57,600, £144,000, £288,000 plus interest. The more invoices the bigger the claim!
At £100 per invoice it’s £144,000, £360,000, £720,000 plus interest.
For over 20 years, CPA has calculated and recovered Late Payment Compensation on behalf of Clients!
Yes, CPA can help you boost your business cash-flow.
Don’t let your bankers control you, contact CPA today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Do you realise you could be sitting on a fortune?
Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.
If you sold B2B on credit then there may be a hidden source of capital you can call on.
If you fancy an extra bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.
Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.
We can help you uncover the pile of gold, you didn’t even know you were sitting on.
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.
Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.
You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.
That compensation could provide the cash boost your business needed.
But don’t delay, that compensation evaporates if not claimed within six years of the late payment.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.
Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.
CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.
The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping business owners who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
Those former clients who regularly paid you late can finally be made to pay.
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.