Business news 8 December 2022
James Salmon, Operations Director.
PM working on ‘tough’ new anti-strike laws. Mental health another victim of cost of living crisis. Labour to unveil new plan for supporting UK small business. Small firms happy to share trading data with lenders. Job vacancies slow amid fears for the economy. And more business news.
PM working on ‘tough’ new anti-strike laws
Rishi Sunak said on Wednesday that he would bring in “new tough laws” to protect people from strike disruption. He told MPs that if “union leaders continue to be unreasonable, then it is my duty to take action to protect the lives and livelihoods of the British public”.
The Prime Minister’s pledge came as the PCS union said Border Force staff would join a wave of strikes this Christmas. A bill has been introduced to Parliament which would ensure minimum service levels on transport networks during strikes but it is yet to be debated by MPs and peers.
Downing Street said the legislation would be extended to other services but would not specify what these would be and no timescale was given. Meanwhile, the Labour Party has said it will repeal the 2016 Trade Union Act if it comes to power, making it easier for unions to take industrial action. The Telegraph notes analysis of Electoral Commission figures by the Conservative Party claiming that unions “holding the country to ransom this Christmas” have donated £15m to the Labour Party in the two-and-a-half years of Sir Keir Starmer’s leadership.
Separately, senior military figures have told the Government that Armed Forces personnel should not have to sacrifice their Christmas to cover for striking public sector workers who earn more than them. Bringing in soldiers also risks weakening the “operational capability” of the military to respond to threats, ministers were told.
Mental health another victim of cost of living crisis
Research by HSBC has found that the rising cost of living isn’t just hurting small firms’ bottom lines but is leading to a decline in wellbeing for business owners.
Some 26% reported a slump in mental health due to heightened economic pressures. Commenting on the findings, behavioural psychologist Jo Hemmings said: “With the rising cost of running a company, on top of an increase in the cost of living, small business owners are facing a perfect storm.”
On the bright side, although 43% of small business owners worry about the impact of the next six months on their business, 65% remain confident their business will survive.
Labour to unveil new plan for supporting UK small business
Shadow chancellor Rachel Reeves will today announce that a Labour administration would set up a state-backed group to boost small businesses by linking up institutional investors and venture capital firms.
Small firms happy to share trading data with lenders
A survey by software company Codat has found that nine in ten small companies would share their trading performance with their lenders if it resulted in lower borrowing costs and more clarity on terms. The Times notes that Codat is among the companies lobbying ministers to extend open banking, which enables data sharing in financial services, typically current accounts and payments but not yet lending or other services such as insurance.
Coal
The first new UK coal mine in 30 years has been approved to provide for the steal industry. Environmentalists have decried the decision and pointed out that Steel makers are committed to switching to cleaner methods.
One in three of Starling’s bounceback loans is underperforming
The chief executive of Starling has admitted to the Commons Public Accounts Committee that 34.3% of the bounceback loans it provided were in “distressed” status. The figure revealed by Anne Boden in Tuesday’s hearing was considerably higher than the proportion reported by other bank representatives who appeared before MPs.
HSBC’s head of lending Karl Reid said roughly 17% of the bank’s loans were either in default or in arrears while Andrew Harrison, managing director of business banking at NatWest, said that 88% of its loans were either fully repaid or being paid back on time. Paragon bank’s managing director Dave Newcombe said that just two of its 139 loans were in arrears. The latest data published by the British Business Bank show that across the entire scheme, around 3.2% of outstanding loans were in default, 7.6% in arrears.
Job vacancies slow amid fears for the economy
Growth in job vacancies fell to its lowest level in nearly two years in November as economic uncertainty led businesses to scale back hiring. The latest recruiter survey by KPMG and the Recruitment and Employment Confederation shows the rate of inflation in wages for new starters as well as temporary employees fell to its lowest level in a year and a half despite inflation in double digits.
Neil Carberry, chief executive of the confederation, said the latest results did not indicate that there had been a major slowdown in hiring. “While permanent recruitment activity has dropped from the very high levels of earlier in the year, the pace of that drop has tempered this month,” he said. Claire Warnes, partner at KPMG UK, warned that wage growth may fall in the coming months as employers cut back on plans to recruit new workers and employees stay put to maintain their job security.
UK mortgage lenders promise more support for the vulnerable
Following a meeting with Jeremy Hunt, consumer champion Martin Lewis and the Financial Conduct Authority, Britain’s mortgage lenders have agreed to take a more consistent and supportive approach to homeowners struggling with the cost of living crisis. Bank bosses recommitted to protect mortgage holders by enabling them to switch to a new fixed rate mortgage, without a new affordability test, when their current deal ends if consumers are up to date with their payments. This covers 97% of the market. In addition, the financial watchdog published draft guidance outlining the main methods of support for customers, including forbearance programmes similar to those introduced at the start of the pandemic. “We expect every lender to live up to their responsibilities and support any mortgage borrowers who are finding it tough right now,” the Chancellor said after the roundtable on Wednesday.
British companies targeted by foreign buyers
Figures from the Office for National Statistics (ONS) show the value of takeovers of British companies by foreign ones more than doubled to £25bn in the third quarter amid low valuations in the UK and a falling pound against the dollar. This compares with £12.5bn in the third quarter of 2021 and £11.1bn in the second quarter of this year.
House prices drop by 2.3% in a month
UK house prices fell by 2.3% in November, their steepest drop in 14 years. Higher mortgage rates, economic uncertainty, and the rising cost of living are all affecting the market, according to Halifax. The annual rate of growth in property prices has now dropped from 8.2% to 4.7% with the average UK house price standing at £285,579. However, Kim Kinnaird, director of Halifax Mortgages, said the fall should be seen in the context of very steep price rises since 2020.
Trump Organization convicted of tax fraud, New York jury finds
The Trump Organization has been convicted of criminal tax fraud which saw executives rewarded with off-the-books perks to make up for lower salaries, reducing the company’s tax liabilities.
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.