Business news 22 December 2022

James Salmon, Operations Director.

Labour demands action over late payments. Nearly 2m households missed bill payment last month. UK public sector borrowing hits record November high. GDP down more than estimated. Brexit cost UK 5.5% in GDP.  And more business news.

Labour demands action over late payments

Labour has tabled proposals for annual reports to set out how many suppliers a business paid on time after analysis showed small businesses were left waiting for £23bn in unpaid invoices over Christmas. Under the plans, audit committees would report on how they were performing, making board members accountable. Labour warned late payments are “crippling” the economy and urged the Government to force big companies to act.

CPA doesn’t think this will be much of a deterrent. Late payers need to be hit in the pocket. Compensation for late payment needs to be higher and easier to enforce. Compensation levels were set decades ago and have been eaten into by inflation. They need to be a real deterrent to paying late.

Also the payment terms big companies can impose on suppliers need to be tightened too.  Companies can set terms as far as 60 days, with no real justification for doing so other than to improve their own cashflow,  basically legitimizing late payment.  Maximum terms should be reduced to allow for payment administration and leave the financing to proper financial institutions.

Nearly 2m households missed bill payment last month
A study by consumer charity Which? reveals that the cost of living crisis has driven almost 2m households to miss a major bill payment in the last month. Which? director of policy and advocacy Rocio Concha said: “With 1.9m households missing important payments in the run up to Christmas, we’re worried that many more people could be facing financial crisis in January – as the credit repayments pile up and the cost of living crisis continues to bite.”

UK public sector borrowing hits record November high
Figures from the Office for National Statistics show public sector net borrowing rose to £22bn in November, nearly three times the £8.1bn reached in the same month last year and the highest November borrowing since monthly records began in 1993. Economists polled by Reuters had forecast a figure of £13bn. Day-to-day government expenditure increased by £13.5bn to £82bn for November, driven by a 50% hike in interest payments to £7.3bn. Of this, £4.3bn reflected the impact of inflation; interest payable was £2.4bn more than in November 2021. There was also a £3.3bn increase in social assistance costs to £13.2bn, driven by a rise in cost-of-living payments. Divya Sridhar, economist at PwC, said: “The latest data on the UK’s public finances reflects the fiscal implications of continued energy bills support and higher inflation. Looking ahead, continued energy bills support and the ninth consecutive rise in interest rates announced by the Bank of England last week will continue to squeeze public finances.” The Chancellor, Jeremy Hunt, said: “Faced with the twin global emergencies of a pandemic and Putin’s war in Ukraine, we have taken significant action to support millions of businesses and families here in the UK. We have a clear plan to help halve inflation next year but that requires some tough decisions to put our public finances back on a sustainable footing.”

GDP down more than estimated

UK Gross Domestic Product fell further than initially expected in the third quarter, according to the latest figures from the Office for National Statistics. The UK economy is now estimated to have shrunk 0.3% between July to September. This was downwardly revised from a previous estimate of a 0.2% decline.

Brexit cost UK 5.5% in GDP
A new report from the Centre for European Reform (CER) thinktank claims Brexit has reduced GDP by 5.5% compared to the economy had Brexit not happened. Tax revenues would have been around £40bn higher on an annual basis, the CER added. Tory peer Gavin Barwell, chief of staff to Theresa May during her Brexit negotiations, urged his colleagues to acknowledge the impact of leaving the EU on the economy. “Our politicians can’t go on ignoring this economic self-harm for ever. That doesn’t mean we have to rejoin, but it does mean we need to reduce the very damaging barriers to trade that we have introduced with our nearest neighbours,” he said. Tory Brexiteer Jacob Rees-Mogg responds to the report in a piece for the Daily Express. He says the thinktank, which is partly funded by the EU, used a flawed methodology when calculating the effects of Brexit on the economy. In short, Mr Rees-Mogg argues that the CER “develops a model that does not match history and claims it is accurate for the future. It advocates the European system whilst refusing to compare the UK to European States. It is so bad that the donors should ask for their money back.”

Most exporters say Brexit has not improved trade
A survey by the British Chambers of Commerce (BCC) reveals that three-quarters of exporters say the Government’s post-Brexit trade deal with the EU has not helped them to expand their business in the last two years. Some 56% of those exporting goods said they had experienced problems complying with new trade rules, while 45% reported issues trading in services. The BCC’s director general, Shevaun Haviland, said: “Businesses feel they are banging their heads against a brick wall as nothing has been done to help them, almost two years after the TCA [trade and cooperation agreement] was first agreed. The longer the current problems go unchecked, the more EU traders go elsewhere, and the more damage is done.” The BCC proposed a number of changes that could be negotiated immediately, rather than waiting for a formal review due in 2026.

People turning to recycled gifts for Christmas
As people tighten their belts amidst the rising cost of living, and concerns grow over the state of the environment, many are turning to second hand gift-giving this Christmas. According to a survey by Deloitte, one in 10 Brits plan to give second hand gifts this winter because of the pressure inflation is exerting on household budgets. Separate research by the Waste and Resources Action Programme in partnership with eBay found that if everyone shopped for only pre-loved or refurbished items it could save 300,000 tonnes from landfill per year, and reduce carbon emissions by at least 1.5m tonnes, the equivalent of taking 323,000 cars off the road for one year.

Property transactions continue to rise
Data from HMRC show property transactions have increased consecutively over the past nine months despite the ongoing cost of living crisis. They hit 107,179 in November – 13% higher than the same month last year and 1% up on October. Frances McDonald, research analyst at Savills said: “In light of the economic backdrop, transaction figures coming out of the HMRC remain surprisingly strong.”

UK House Prices are around £17,500 higher on average than at the start of 2022, according to a property website. Zoopla said property values have increased by 7.2% across the year, but it added that there has been a sharp fall in demand since the summer. The average UK house price is £258,100.

Toucan Energy goes up for sale
The insolvent solar farm company Toucan Energy is being put up for sale after appointing Interpath Advisory as administrator last month. Interpath is expected to confirm on Friday that KPMG has been hired to oversee an auction of its assets. The company owns 53 solar parks across the UK, and major energy industry groups are expected to participate in the forthcoming sale process.

UK pledges up to £4.5bn to fund Bulb takeover
The UK Government has committed to providing up to £4.5bn to Octopus Energy to support the purchase of failed electricity supplier Bulb. The company collapsed in November 2021 having been caught out by a sharp rise in wholesale energy prices. Bulb’s 1.5m customers were transferred to Octopus on Tuesday night. On Wednesday, the Government said it would also provide the company with a cash injection and cover any compensation that may occur “as a result of Bulb’s actions prior to the transfer.” The support is on top of the £1.1bn paid to handle Bulb’s administration. This is expected to rise because of wind-down costs for the administrator, Teneo.

Tech giants ditch office space in London and Europe
Alphabet, the parent company of Google, Facebook parent Meta and enterprise software giant Salesforce are among the US technology groups seeking to abandon leased office space in London and Dublin, the FT reports.

UK rugby clubs heading for financial disaster
An investigation by Mike Ryan, a private equity director who has produced reports on the finances of Rugby Australia and New Zealand Rugby, reveals a number of rugby clubs in the UK are under threat financially. Premiership clubs have collectively amassed £300m in net debt over the past six years, a figure which excludes investment in the competition from CVC Capital Partners in 2018. To solve the problem, Ryan believes the Premiership must hire an independent commissioner and follow the kind of centralised model used in other sports. That would lead to centralised contracts in the league that would ensure stricter player payments as well as “consistent accounting so at any point in time you can look at the health of the entire PRL”.

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 one will be particularly deadly for suppliers for some time to come.

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!

No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email 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 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.