Business news 6 June 2024

Some of the business news that we thought would interest our members.

James Salmon, Operations Director.

Private sector economy maintains solid growth

The UK private sector economy grew faster than expected in May, while inflation eased to its slowest pace in three years. Joe Hayes, principal economist at S&P Global Market Intelligence, said: “The PMI survey for May showed another reasonable rate of expansion in the UK service sector. Taken in tandem with our earlier-released manufacturing survey, the PMIs imply GDP growth of around 0.3% so far in the second quarter.” Inflation across the private sector fell to its weakest level since February 2021, indicating that price pressures are continuing to loosen and boosting hopes of a summer rate cut.

Rishi Sunak accused of lying about Labour tax plans

Sir Keir Starmer has accused Rishi Sunak of “deliberately” lying about Labour’s tax plans. In Tuesday evening’s TV debate, the Prime Minister claimed a Labour government would result in £2,000 of tax rises per working household to cover for a £38bn black hole in the party’s plans. Speaking to the media for the first time since the debate, Sir Keir said: “Last night really mattered because what you saw was a Prime Minister with his back against the wall, desperately lashing out and resorting to lies – and he knew he was lying. And I don’t say that lightly.” The UK’s official statistics regulator, the Office for Statistics Regulation, is looking into the claim. But Conservative Treasury Minister Laura Trott denied Mr Sunak had lied and insisted independent analysis had identified a black hole in Labour’s spending plans. She said: “This is underpinned overwhelmingly by Treasury analysis so if people think Labour are going to win this election they need to start saving.”

Britons need over £1m for comfortable retirement

New research suggests that Britons planning to retire early now need a “seriously large” pension pot worth over £1m for a comfortable retirement. The calculations show that a 55-year-old now needs a pension pot worth £1.3m if they retire in 2024, an extra £495,000 compared to retiring at the state pension age of 67. For a moderate retirement, a 55-year-old needs a pension pot of £857,000. Alice Guy, head of pensions and savings at interactive investor, said the figures were “thought-provoking” considering Labour is rumoured to be considering reintroducing the lifetime allowance.

TUC warns Labour: Increase public sector pay or risk strikes

A Labour government risks public sector strikes if it fails to increase workers’ pay, warns the president of the Trades Union Congress, Matt Wrack. He urges Keir Starmer not to enforce tight public sector pay settlements, adding to the financial pressures facing Rachel Reeves if she becomes chancellor. Wrack also urged Sir Keir to resist pressure from business leaders to water down Labour’s workers’ rights plan. Separately, the Rail, Maritime and Transport union (RMT) has warned of an “even more vicious assault” on workers’ rights if the Conservatives win the general election, urging members to vote Labour.

Starmer challenged to rule out property tax rises

Sir Keir Starmer has been challenged by the Chancellor to explicitly rule out property tax increases if Labour wins the general election. Writing in the Telegraph, Jeremy Hunt reveals a new Conservative pledge not to increase capital gains tax, stamp duty or the number of council tax bands and asks the Labour leader to match the promises. The “family home tax guarantee” is made up of pledges in three specific areas of property tax: no new council tax bands, council tax revaluations and council tax discounts; the maintenance of private residence relief, where people do not pay capital gains tax on their main home when it is sold, and a promise not increase the rate or level of stamp duty. Tory insiders said the move was prompted by the shadow chancellor’s past interest in property taxes and Welsh Labour’s move to expand council tax bands.

IA calls for shares tax to be scrapped

The Investment Association (IA) has called on the next government to scrap stamp duty on shares to help revive the fortunes of Britain’s beleaguered stock market. Chris Cummings, chief executive of the IA, said the move was an obvious way to boost the attractiveness of UK equities. The tax charges investors 0.5% when buying UK shares but nothing if they put money into foreign firms. Cummings argued that greater reforms to the listings environment were needed. “In a post-Brexit world, the UK needs to signal clearly that we are open for business,” he said.

City predicts Labour will backtrack on tax pledges

Investors believe Sir Keir Starmer will break his promise not to raise income and corporation tax, a poll by Nomura shows. About 60% of City institutions surveyed expect Sir Keir to raise taxes if Labour wins power. George Moran, Nomura research analyst, said: “The view is that Labour would most likely break its pledge to not raise corporation or income tax. Without any major changes in interest rates or the growth outlook, Labour will face tough choices on fiscal policy. It would be optimistic for Labour to rely on improvements in the economy.”

Public believes Tories more likely to raise taxes

The public believes that the Conservatives are more likely to raise taxes than Labour, according to a recent poll conducted by Savanta. The survey, taken before the tax issue dominated the first TV leaders’ debate, found that 41% of respondents do not believe the pledges from either party not to raise major taxes such as income tax, national insurance, and VAT. The online survey of 2,217 UK adults also revealed that only one in six believe Rishi Sunak, Chancellor of the Exchequer, will not raise major taxes, compared to one in four for Sir Keir Starmer, leader of the Labour Party.

Whistleblowers under pressure to not to use hotlines

More than half of whistleblowers have felt pressured not to use internal hotlines to raise red flags at large global businesses and public bodies, according to a global EY survey. The number of organisations without a whistleblowing hotline has halved since a similar survey in 2022. However, 54% of those who have used such channels said they faced pressure not to do so. The survey, which involved 5,464 board members, senior managers, managers, and staff in 53 countries and territories, revealed that employees fear they would be ignored and their careers hampered if they speak up. Almost a third of respondents also feared for their personal safety. Four in 10 board members said they had faced retaliation themselves or witnessed adverse consequences towards someone who reported misconduct. The survey also showed that more employees would consider dishonest behaviour than two years ago, with nearly 40% of all respondents and two-thirds of board members willing to behave unethically to improve their career or financial position. “Individuals must be made to feel safe, and they should also know that their concerns will be acted on, without any consequence,” said Andrew Gordon, EY’s global forensic & integrity services leader.

M&S director resigns after finance chief poached from Rightmove

A director of Marks & Spencer Group (M&S) is quitting the retailer’s board after being blindsided about the poaching of its new finance chief from another company he chairs. Andrew Fisher, a long-serving non-executive director, only discovered late in the recruitment process that M&S intended to recruit Alison Dolan from Rightmove as its chief financial officer. Mr Fisher, who has been chairman of Rightmove since 2020, resigned from the M&S board. It is the latest stage in M&S’s management overhaul with co-CEO Katie Bickerstaffe also stepping down from the company.

Eli Lilly executive Anat Ashkenazi named Alphabet CFO

Anat Ashkenazi has been appointed as Alphabet’s chief financial officer, succeeding Ruth Porat. Ashkenazi moves over from Eli Lilly where she helped the drugmaker achieve leadership in the weight-loss sector. Alphabet CEO Sundar Pichai said he looked forward to harnessing Ashkenazi’s skills in the tech giant’s drive to lead the artificial intelligence era.

Pensioners face being taxed over £100 a year

Tax would become due on the state pension for the first time in 2028-29 under a Labour government unless it matches a Conservative pledge to increase the personal allowance for pensioners in line with the state pension. Based on current forecasts from the Office for Budget Responsibility, full state pension is on course to rise above the personal allowance by the 2028-29 tax year. It would mean basic-rate paying pensioners lose up to £55 to tax in 2028-29, while those pushed into the higher-rate tax bracket could lose £110. This would increase to £122 for basic-rate payers and £244 for higher-rate payers in 2029-30. Baroness Altmann said: “We all pay tax, but income tax on a basic level of what is meant to be just about enough to get by would be, in my view, reflecting misjudgements about equity.”

Pent up investment demand could unlock billions

Small businesses in London are prepared to invest £500,000 each in a potential wave of growth, according to a survey by Together, a specialist lender to SMEs. However, the survey highlighted barriers to funding, including tight lending criteria at mainstream banks, and called for government support. Ryan Etchells, chief commercial officer at Together, said that the UK’s 5.5m small and mid-sized business owners are eager to realise their investment and growth plans. The study found that nationally, around 65% of SMEs are keen to invest at least £100,000 in their businesses over the next two years. If every SME invested in line with pent-up demand, the stimulus could amount to £2trn.

FCA not inclined to write detailed AI rules now

The Financial Conduct Authority (FCA) has announced that it will not rush to introduce detailed rules for regulating the use of artificial intelligence (AI) in financial services. While the European Union has already approved a new law to regulate AI, Britain is taking a cautious approach in this rapidly developing tech sector. Speaking at an event held by IA, the UK investment management industry body, FCA CEO Nikhil Rathi stated: “We are not at the moment inclined to just jump in and write lots of detailed rules.”

Confusing financial terms have cost Brits billions

Confusing financial terms have cost Brits an estimated £26bn, with 65% struggling to understand terms and acronyms used in financial documents. Paying more for something, being overcharged, and paying more tax than expected were among the consequences. A separate poll revealed that those who speak English as a second language are more likely to regret signing a financial agreement. The research was commissioned by remittance provider Remitly Global, Inc, which has created an online glossary called Quid’s English to support anyone in the UK trying to navigate the nuances of money language.

Food bank use could be halved with new commitments

Food bank use could be halved over the next parliament if a new government commits to measures around benefits, debt, and social housing, according to the Trussell Trust. The organisation is calling for a guarantee to ensure Universal Credit covers basic costs, as well as more affordable debt deductions and funding for local crisis support. They also demand new workers’ rights legislation and investment in building 90,000 new social homes every year.

Why should you become a CPA member!

The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have seen many financial crises, this last one was particularly deadly for suppliers fand we are still seeing elevated insolvencies as businesses struggle.

CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers.

Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the debt value maybe!

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.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

Do you have a commercial late payer that is causing you grief? Use CPA’s no-win, no-fee, commercial debt recovery service!

If you have a particular business customer who is late paying and causing you sleepless nights, why not offer it to CPA for purchase on recourse?

CPA’s collection department will then pursue the debt. We will be liable for any costs incurred and then when we have recovered the debt, we will pay you the net principle debt recovered less our percentage.

Once you have enjoyed that success then you can consider the more cost effective membership which includes our Overdue Account Recovery service and Status/Credit reports as well as a range of other complimentary services.

Just call  020 8846 0000 and ask for Godfrey Nelson or Cris Shirley (business hours) or email debtpurchase@cpa.co.uk today.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.

Get compensated for previous late payments

Have you been paid late by business customers in the last six years?

Maybe you no longer work with them. Under legislation, you are entitled to  compensation you for those late payments you have suffered.

You put up with the PAIN – now claim the GAIN!

Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!

CPA (LPC) Recoveries is using our bespoke software and decades of experience to do just that for our clients

Check our compensation calculator to see how much your business could be owed!

Discover NOW the potential value of late payment compensation hidden in your sales ledger!

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.