Calls for a radical budget – business news 13 August 2020.
13 August 2020.
James Salmon, Operations Director.
Calls for a radical budget, the deepest recession, productivity figures, concern for freelancers, house prices, markets, covid-19 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.
Radical Budget needed to lift Britain out of recession, Sunak told
Rishi Sunak has been urged to use his autumn Budget to slash taxes or face long-term economic damage.
Lobby groups have called for national insurance cuts, support for retail rents, deregulation and a huge investment in innovation.
Mike Cherry, chairman of the Federation of Small Businesses, said: “We need the most probusiness, pro-self-employed Budget ever this autumn, one that lowers the costs of innovating and bringing great goods and services to market and eschews tax rises.”
Suren Thiru, head of economics at the British Chambers of Commerce, said measures must include “a cut in employer national insurance contributions and targeted support to help businesses under local lockdowns.”
UK suffers deepest recession on record
The UK economy shrunk by a fifth and fell into its deepest recession on record in the second quarter. Official data released on Wednesday confirmed a 20.4% fall in GDP quarter on quarter, a decline double that of the US.
The contraction followed a 2.2% dip in the first quarter, sending the country into a technical recession.
In Germany, GDP fell 11.9% in the first half, Italy shrank 12.4%, France 13.8% while Spain suffered the worst second-quarter slump of any leading economy of 18.5%.
Responding to the figures, Rishi Sunak, the Chancellor, said: “Hundreds of thousands of people have already lost their jobs, and sadly in the coming months many more will. But while there are difficult choices to be made ahead, we will get through this, and I can assure people that nobody will be left without hope or opportunity.”
Samuel Tombs, of Pantheon Macroeconomics, said the length of the lockdown in the second quarter worsened the performance, a view shared by former Treasury minister Lord O’Neill, who added: “It’s not as though our system-wide shutdown resulted in better health outcomes.”
Productivity crash worse than 3-day week
Figures from the Office for National Statistics (ONS) show productivity fell at the fastest pace on record during lockdown, driven by social distancing on building sites and production lines and difficulties in organising work from home arrangements.
Productivity was even lower than when the three-day week was temporarily introduced by Ted Heath in 1974. However, FTSE 100 stocks rose to a three-week high on Wednesday on the back of “encouraging” June figures, which showed the economy grew 8.7% as lockdown measures were lifted.
Concern as freelancer numbers nosedive
The Telegraph’s Harry Brennan reports that over a quarter of a million self-employed workers returned to full-time employment between April and July, as the coronavirus crisis “dealt a crushing blow to the freelancer dream.” Andrew Chamberlain of the freelancer trade body IPSE said the “concerning decline” was bad news for the economy. The economic impact of coronavirus combined with Government policies that favoured employees has created “the perfect storm,” he said, adding that a “nimble and innovative” workforce could help the nation recover from the economic malaise. “We need these entrepreneurial workers to help companies grow and then leave early so businesses have funds to reinvest in themselves.”
PwC chair says some staff wary of returning to offices
Chair and senior partner of PwC UK, Kevin Ellis, has told City AM’s The City View podcast that some workers remained fearful about returning to the office. He commented: “When people have come into the office and I have chatted to them they have said they have got used to working from home, they were more nervous about coming in, but now they have come in they have enjoyed it… and they have also said they will be back more often,” after the firm moved 6,000 of its 22,000 staff back to the office since lockdown restrictions were lifted.
Restaurants and bars struggle to get back on their feet
The UK’s largest restaurant and pub chains suffered a 50% slump in sales in July as hospitality businesses reopened for the first time after lockdown. Mark Sheehan, managing director of adviser Coffer Corporate Leisure, which produces a business tracker alongside consultancy CGA and accountant RSM, said: “Despite the fanfare over the July 4 reopening date for hospitality, in reality trade is recovering slowly. The restaurant sector, already under severe pressure pre-Covid has been decimated by the lockdown. The pub sector has proven to be more resilient as expected and is now bouncing back strongly in many areas.” Elsewhere, the FT cites Russell Nathan, head of hospitality at HW Fisher, who says although the Government’s discount eating out scheme offered “good money” to struggling businesses, many said customers were spending less per head: “There is a limit to what people will spend even with t he £10 voucher. It is attracting a lot of young people who don’t spend as much as older people.”
UK house prices move out of negative territory
UK house prices moved out of negative territory last month for the first time since lockdown began as the Government’s stamp duty holiday motivated buyers. However, the bounce is expected to be short-lived, as Government support schemes wind down in the winter. However, London house prices continued to fall in July, new data revealed today, despite an increase in demand from new buyers.
Simon Rubinsohn, of the Royal Institution of Chartered Surveyors, said: “There remains rather more caution about the medium term outlook with the macro environment, job losses and the ending or tapering of government support measures for the sector expected to take their toll. Significantly, some contributors are now even referencing the possibility of a boom followed by a bust.”
Trade war
The United States has said it will hold off an a threatened hike in tariffs on $7.5bn worth of European and UK goods that it imposed as punishment for subsidies for plane-maker Airbus. The move comes as the two sides wrestle to put to an end their 16-year trade battle over state aid for Airbus and American rival Boeing.
Covid-19 general news
Global cases top 20.6 million as deaths pass 749,000
A major survey in England of 100,000 – the largest survey to date in the world according to the government – shows that 6% of the English population or 3.4 million have contracted Covid-19. The study shows a wide range regionally though. In London 13% of those surveyed had antibodies while in the South-West it was less than 3% according to the findings released by the Department of Health and Imperial College London. Also those from Black, Asian and other minority ethnic (BAME) groups (17%), care workers (16%) Healthcare staff (12%), and people living in larger households were among the most likely to have been infected.
The burden of Covid-19 “has fallen particularly heavily on ethnic minority groups and key workers, particularly in care homes and healthcare,” said Professor Helen Ward, one of the researchers involved. “Those in deprived and densely populated areas are most likely to have been exposed to the virus, and we need to do far more to protect people from any future waves of infection.”
The study suggested one in three people with antibodies showed no symptoms, a feature that increased among the over-65s.
Two patients in China who recovered months ago tested positive for Covid-19, raising concern about the the virus’s ability to linger and reappear in people who it previously infected. A 68-year-old woman in Hubei, where the virus first surfaced in December, tested positive on Sunday, six months after she was diagnosed with Covid-19 and recovered. Another man found to have contracted the disease in April after returning from abroad tested positive in Shanghai on Monday.
Germany’s leading infectious diseases institute said yesterday the first vaccine against Covid-19 could be available as early as autumn but warned that it may take longer to control the pandemic. The impact of any vaccine could be tempered by viral mutations or by the resulting immunity only lasting a short time immunity, the institute said. Germany recorded the highest number of new cases in more than three months.
India’s virus death toll has surpassed that of the U.K., pushing it to the No. 4 spot globally.
The recession gripping Sweden may be much softer than first predicted, with economists pointing to the absence of a full lockdown as a key reason behind the development.
New Zealand, touted as a model for keeping the coronavirus under control, is dealing with a new outbreak, while hospitalizations in Texas, one of the U.S. hot spots, are declining.
Markets.
The “risk-on” rally continued Yesterday with UK stocks finishing sharply higher. The FTSE 100 closed ar 6280, up more than 2% as investors continued to focus on recovery and the prospects of a Coronavirus vaccine rather than the dire state of the UK economy. The Eurostoxx 50 was up 0.93% as European stocks also rallied. The Europe GDP contraction was notably better than the UK with the Eurozone recording a 15% drop. In the US the S&P climbed 1.4% approaching a new record high despite the stalemate on the latest stimulus package andd the NASDAQ climbed 2.13%. Asian stocks were mostly higher and are set to erases their losses for the year.
The Oil price rose after an industry report showed U.S. crude inventories last week fell more than analysts had expected, raising hopes regarding fuel demand in the world’s biggest economy. Gold stabalised above $1900 after falling rapidly and is currently at $1931
London City Airport
London City Airport Ltd. will pause the building of the next stage of a 480 million pound ($628 million) expansion due to a slower-than-expected recovery of the U.K. aviation industry from the Covid-19 pandemic.
Companies desperate for cash must be better corporate citizens
ShareAction CEO Catherine Howarth says private and individual investors “have a mandate to insist on companies adopting more ambitious social and environmental standards” in a post-Covid world.
Natwest
Natwest Group said it will cut at least 500 jobs across its retail business and shutter one of its London offices as it battles to cut costs. The bank said it will carry out a voluntary redundancy plan affecting 550 roles in its branches and premier banking service.
Profit warnings up 139%
Research from EY shows companies issued 165 profit warnings between April and June, with 84% citing the pandemic. The figure marked a 139% increase on the same time a year ago.
Government consults on rates reform and online sales tax
The Government has issued a call for evidence for a consultation on reform of the business rates system and a new online sales tax. In a statement, the Government said: “Some stakeholders continue to advocate for alternative or complementary systems of taxation to business rates, as highlighted by the Treasury Select Committee’s 2019 report. More recently, COVID-19 and associated public health measures have significantly affected how non-domestic property can be used. COVID-19 has also, in the near-term, increased the use of online shopping.” It continued: “Historical trends in online retail sales, and the more recent increases driven by COVID-19, suggests that while an online sales tax would not replace business rates, it could still provide a sustainable and meaningful revenue source for the Government.”
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.
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.
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 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