Business news 23 August 2024
Small businesses brace for sick pay storm. UK private sector activity surges. Consumer confidence takes a dip. Markets, Unions, public sector pay rises, tax, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Small businesses brace for sick pay storm
Small businesses in the UK are expressing concerns over Angela Rayner’s proposal to strengthen statutory sick pay, fearing it could lead to bankruptcy. Craig Beaumont from the Federation of Small Businesses (FSB) highlighted that the average cost of sickness absence for small businesses exceeds £3,000 annually, amounting to £5bn across the sector. He stated: “If we want to tackle economic inactivity, we’ve got to help those who we know disproportionately recruit those with health issues.” With the number of sick days taken last year reaching a decade high, small businesses are anxious about the potential financial burden from increased sick pay and other employment costs associated with Labour’s “New Deal for Working People.”
UK private sector activity surges
Activity in the UK’s private sector reached a four-month high in August, driven by a “robust upturn” in new business, as indicated by the S&P Global flash UK composite purchasing managers’ index (PMI), which recorded a reading of 53.4, up from 52.8 in July.
Chris Williamson, chief business economist at S&P Global Market Intelligence, noted: “August is witnessing a welcome combination of stronger economic growth, improved job creation and lower inflation.” The easing of inflationary pressures, particularly in the services sector, contributed to this growth, with the rate of employment growth being the fastest since June 2023.
Despite expectations of a slowdown in GDP growth for the third quarter, the PMI suggests a solid quarterly expansion rate of around 0.3%. The data also indicates a cautious approach from policymakers regarding interest rate cuts due to persistent inflation in the service sector.
The preliminary reading of the UK manufacturing PMI for August rose to 52.5, from 52.1 in July, higher than the 52.2 consensus forecast. It was a similar story for the larger services sector, where the flash PMI reading came in at 53.3, up from 52.5 and beating the 52.8 estimate.
Consumer confidence takes a dip
The latest GfK Consumer Confidence Index reveals a decline in expectations for Britain’s economy, marking the first drop in six months. The index fell four points to minus 15 in August, reflecting concerns about the economic outlook. However, optimism regarding personal finances has risen, with a three-point increase to plus six, attributed to recent mortgage rate cuts. Joe Staton, GfK’s client strategy director, noted: “This more positive outlook may be due to a mortgage friendly interest rate cut at the beginning of August.” Additionally, the Major Purchase Index saw a three-point rise, indicating potential growth in demand for big-ticket items. Despite these positive signs, Linda Ellett from KPMG cautioned that household finances remain variable and significant increases in discretionary spending are yet to materialise.
Energy
Ofgem is raising its price cap by 9.5% to £1,717 adding £12 per month to an average bill from October 2024. Jonathan Brearley CEO of Ofgem urged consumers to ‘shop around’ and consider opting for a fixed rate tariff.
Markets
Yesterday, European markets were flat, the FTSE 100 closed at 9288 and the Euro Stoxx 50 closed at 4885. Overnight in the US the S&P 500 fell 0.89% to 5570.64 and the NASDAQ fell 1.67% to 17619.35. U.S. stocks dropped, ahead of a speech by Fed Chair Jerome Powell at the Jackson Hole Economic Symposium as investors await news on the future of interest rates. The S&P Global manufacturing PMI declined to 48 in August versus 49.6 in the prior month, while services PMI rose to 55.2 from 55.
This morning on currencies, the pound is currently worth $1.312 and €1.18. On Commodities, Oil (Brent) is at $77.6 & Gold is at $2497. On the stock markets, the FTSE 100 is currently up 0.2% at 8304 and the Eurostoxx 50 is up 0.19% at 4894.
Jackson Hole’s meeting of central bankers concludes today with Fed Chair Jerome Powell making his speech at 2pm GMT.
Public sector pay rises spark fears over public finances
The recent wave of public sector pay rises, amounting to £9.4bn, has raised concerns about the sustainability of the UK’s finances. Rachel Reeves, the Chancellor, faces tough choices as the Office for Budget Responsibility (OBR) reported that the UK has already overspent by £4.7bn this financial year. Philip Shaw, chief economist at Investec, stated: “The numbers certainly show that the public finances are in a worse state than the OBR thought in March,” indicating that tax increases may be necessary. The UK has borrowed £51.4bn in the first four months, contributing to a national debt of £2.8trn. With public sector employment at its highest since 2012 and average wages rising, the Government’s decision to grant substantial pay rises has intensified financial pressures. James Cleverly, formerly the home secretary and now a candidate for the leadership of the Conservative Party, said: “The Labour Government has been played by its union paymasters. Offering a no-strings pay deal to militant strikers whilst stripping millions of pensions of their winter fuel payment is nothing short of a national embarrassment.”
Unions turn the screw on Labour
The Fire Brigades Union (FBU) is urging the repeal of all anti-union laws, including those enacted during Margaret Thatcher’s government, at the upcoming Trades Union Congress. Matt Wrack, the FBU’s general secretary, stated, “The UK has the most restrictive and authoritarian anti-union laws in the western world.” The motion, expected to pass, seeks to eliminate laws that restrict collective bargaining and mandate secret ballots before strikes. The FBU also wants Labour to uphold its commitment to repeal recent anti-union legislation, including the Minimum Service Levels (Strikes) Act. The union’s push comes amid a backdrop of significant financial support for Labour, with unions contributing £2.4m during the last election campaign. Additionally, the PCS union is advocating for public sector pay restoration, citing a 1.5% annual decline in real-terms pay since 2011. The proposal would cost an estimated £50bn.
How Labour could raise taxes in October
The Independent considers ways in which Chancellor Rachel Reeves could hike taxes in Labour’s upcoming autumn Budget. While Labour has ruled out increases to National Insurance, Income Tax, or VAT, potential measures include a flat 30% pension tax relief rate, which could raise £3bn annually, and reforms to Inheritance Tax and Council Tax. Elsewhere, the Express notes that receipts from IHT increased by £200m, reaching £2.8bn in the three months from April to July, marking a 9% rise. Alastair Black, head of savings policy at Abrdn, said: “Without any IHT reform, these numbers will only continue to rise,” with projections suggesting receipts could hit £9.7bn by the decade’s end. Meanwhile, Maggie Pagano says in the Mail that Reeves will want to raise at least £10bn a year from more tax – and raise borrowing by around £7bn, with IHT and CGT most likely to be hiked. She goes on to warn the Chancellor against bearing down on wealth creators, thousands of whom have already fled the country. Finally, the Telegraph reports on estimates from HMRC that a 10% rise in CGT would in fact cost the Treasury £2bn in lost revenue in 2027-28, as investors radically change their behaviour to avoid the higher levy.
Tech sector lagging on social mobility
The technology sector in the UK is facing a significant diversity issue, with only 9% of its workforce coming from lower socioeconomic backgrounds, compared to 29% in finance and 23% in law. Debbie Forster, the Tech Talent Charter chief executive, believes that greater access to jobs will not only plug “the gaping chasm between supply and demand for tech skills” but also ensure that the industry does not “leave behind those sectors of society not adequately represented within its ranks.” Sarah Atkinson from the Social Mobility Foundation noted that the tech industry is “dragging its heels” with many companies not participating in the Social Mobility Employer Index. Barriers such as unequal access to technology education and resources must be addressed to create a more inclusive workforce.
SFO approach fundamentally flawed, academics say
The Institute of Economic Affairs has called for the Serious Fraud Office (SFO) to be replaced with a new agency focused on preventing economic crime. The SFO has faced criticism for its “high-profile failures, including ethical misconduct and incompetence,” according to a report co-authored by David Shepherd, an economic crime researcher. The report highlights a significant drop in fraud convictions, from 12,378 in 2012 to just 3,455 in 2022, and argues that the SFO’s focus on complex prosecutions diverts resources from crime prevention. Shepherd stated: “The SFO is hamstrung by its focus on criminal justice and courts that are not fit for purpose.” Despite recent successes, including returning over £1bn to taxpayers, the SFO’s effectiveness in tackling fraud remains in question.
Oil and gas firms warn of crisis for industry
The Government’s proposed changes to the Energy Profits Levy have raised significant concerns among over 40 North Sea companies, who warn that the new tax rate of 78% could jeopardise hundreds of thousands of jobs. The letter, coordinated by Offshore Energies UK, highlights that the levy may hinder investment in emerging technologies like floating offshore wind and carbon capture. The North Sea energy sector currently supports around 200,000 jobs, with many in related industries. The letter states: “For our companies, [the tax plans] risk operators – big and small – further scaling back or postponing their investment plans.” While the Government claims these reforms will create “thousands” of jobs in renewable energy, critics argue that the plans could widen the UK’s energy trade deficit and negatively impact local communities reliant on the sector.
Emile Heskey declared bankrupt after tax woes
Former England footballer Emile Heskey has been declared bankrupt following a High Court petition filed by HM Revenue and Customs (HMRC) in January 2024. Once estimated to be worth £12m, Heskey’s financial troubles stem from an unpaid tax bill exceeding £1.64m and legal costs of approximately £195k. The Insolvency Service confirms his status as ‘currently bankrupt’, with the order set to be discharged on August 19, 2025. Heskey’s financial difficulties have been exacerbated by his involvement in a celebrity investment scheme linked to a £1.6bn tax dispute.
Latest Insolvencies
Petitions to wind up (Companies) – TRAVEL TECH CONSULTING LTD
Appointment of Liquidators – VATINZA LIMITED
Petitions to wind up (Companies) – CENTRAL HEATING GROUP LIMITED
Appointment of Liquidators – MEZZFRANCE INVESTMENTS LIMITED
Appointment of Liquidators – JOHN STONE IBIZA UK LIMITED
Appointment of Liquidators – GANGFIELD VENTURES LIMITED
Appointment of Liquidators – APP WORLD LTD
Appointment of Liquidators – TAMI SECURITISATION 1 LIMITED
Petitions to wind up (Companies) – FRESH KITCHENS AND BATHROOMS LTD
Appointment of Liquidators – NYDS LTD
Appointment of Liquidators – PETER BAMBER CONSULTANCY LIMITED
Appointment of Liquidators – M.R. TIMBER LIMITED
Appointment of Liquidators – CREATIVE ALIAS LTD
Appointment of Liquidators – W2 SOLUTIONS LTD
Appointment of Liquidators – DATAWORKS CONSULTING LIMITED
Appointment of Liquidators – UX CENTRE LIMITED
Appointment of Liquidators – NMS SELECT LIMITED
Appointment of Liquidators – BATA HR LIMITED
Petitions to wind up (Companies) – ARCHILIME LTD.
Appointment of Liquidators – SETGOAL LIMITED
Petitions to wind up (Companies) – GMG LONDON STEELS COMPANY LTD
Appointment of Liquidators – CASEMAGIC LIMITED
Appointment of Liquidators – SMARTER WORKING LIMITED
Appointment of Liquidators – G&M TRAINING LIMITED
Appointment of Liquidators – XPAULK LTD
Appointment of Liquidators – LOWDON DIGITAL LIMITED
Appointment of Liquidators – RESSIM LIMITED
Appointment of Liquidators – RETREAT DEVELOPMENTS LTD
Appointment of Liquidators – MACDONALD CONSULTANCY SERVICES LTD
Appointment of Administrator – SL200 LIMITED
Appointment of Liquidators – AVANCO CONSULTING LIMITED
Appointment of Liquidators – STEPPING STONES DAY NURSERY & NURSERY SCHOOL LIMITED
Appointment of Liquidators – A R GRIEVE INVESTMENTS LIMITED
Appointment of Liquidators – CAPESCALE LIMITED
Appointment of Administrator – 108 MEDIA LTD
Appointment of Liquidators – ANDERSON BUCHAN PROPERTIES LIMITED
Appointment of Liquidators – SPARK44 (JV) LIMITED
Appointment of Liquidators – MICHAEL HIGGS LIMITED
Petitions to wind up (Companies) – ON THE BUTTON LTD
Appointment of Liquidators – Z R LIMITED
Appointment of Liquidators – BEW NETWORK LTD
Petitions to wind up (Companies) – BIG COUNTRY LIMITED
Appointment of Liquidators – ARROWLINE PROPERTIES LIMITED
Appointment of Administrator – GRAYSHOTT HOTEL PROPERTY LIMITED
Appointment of Liquidators – SURVEYED PROPERTIES LIMITED
Appointment of Liquidators – BORCAN LTD
Appointment of Administrator – B.J. STAINLESS FABRICATIONS LIMITED
Appointment of Liquidators – HARRINGAY MEAT TRADERS LIMITED
Petitions to wind up (Companies) – TWENTY TWENTY ENTERPRISES LTD
Appointment of Liquidators – IMAGE BUILD LIMITED
Appointment of Liquidators – CLOUDIFIED LTD
Petitions to wind up (Companies) – THE PUG AND THE PUSSYCAT LIMITED
Winding up Order (Companies) – INFINITY EVENTS & MANAGEMENT LIMITED
Appointment of Liquidators – AMBER GREEN LEEF 2 LLP
Petitions to wind up (Companies) – TJH CIVILS LIMITED
Appointment of Liquidators – DESCANT CONSULTING LIMITED
Appointment of Liquidators – THOS. STOREY PROPERTY LIMITED
Winding up Order (Companies) – CYBERSECPRO LTD
Appointment of Liquidators – PREMIER ENGINEERING (LINCOLN) LTD
Petitions to wind up (Companies) – OKAMI MEDIA LIMITED
Appointment of Liquidators – HALLCO 1430 LIMITED
Petitions to wind up (Companies) – FERDINAND FOOTBALL GROUP LTD
Appointment of Administrator – NORTHWOLDS RICHARDSON GROUP LIMITED
Appointment of Administrator – GRAYSHOTT HOTEL LIMITED
Appointment of Liquidators – SECURESTORM LIMITED
Petitions to wind up (Companies) – AB DESIGN & BUILD LTD
Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
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 and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
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’s collection department 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.