Fifth of private sector workers on furlough – business news 29 January 2021.
James Salmon, Operations Director.
Fifth of private sector workers on furlough, employment rights review scrapped, UK Tech sees rise in business activity, business leaders demand action over customs chaos, early warnings of Brexit trade trouble emerge in UK data, half of remaining cash-points could disappear in two years, covid-19, market 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.
Fifth of private sector workers on furlough
The wages of around 4.6m, or 17%, of private sector employees were being supported by the state in mid-January, according to the Office for National Statistics, up from around 11% a month ago, before the new coronavirus variant forced officials to ramp up restrictions.
New HMRC figures also revealed that the cost of the Job Retention Scheme reached £46bn in December with a total of 10m employees using the support during the pandemic.
Hannah Essex, co-executive director at the British Chambers of Commerce, urged Rishi Sunak to extend the furlough scheme until at least the end of July.
“Further action will be needed in order to avoid a damaging cliff edge for jobs and livelihoods after the scheme ends in just a couple of months”, she said, going on to add that officials “must learn lessons from last October” when it delayed the announcement of an extension to the scheme, piling more pressure on jobs.
The increase in workers on furlough will be of concern to those looking for a rebound in the economy
Employment rights review scrapped
A post-Brexit review of workers’ rights will not go ahead, says Business Secretary Kwasi Kwarteng.
It was feared the review would lead to an erosion of job protections, such as the 48-hour week, holiday entitlements and overtime pay.
He told ITV “the review is no longer happening”, adding in the Commons on Thursday: “There is no plan to reduce workers’ rights.”
Union leaders and opposition Labour MPs had vowed to fight any watering down of employee rights arguing that the review confirmed their belief that, outside the European Union, the government would start to erode employment safeguards.
Mr Kwarteng told MPs: “I do not want there to be any doubt about my or the government’s intentions in this area. We will not row back on the 48-hour weekly working limit derived from the working time directive, we will not reduce the UK annual leave entitlement, which is already much more generous than the EU minimum standard, we will not row back on legal rights to breaks at work. I will say it again, there is no government plan to reduce workers’ rights.”
UK Tech sees rise in business activity
Research from IHS Markit and KPMG shows the UK’s tech sector expanded at a stronger rate than the entire private sector in the fourth quarter. “The final quarter of 2020, saw the UK tech sector demonstrate such resilience in the face of ongoing pandemic disruptions and some client spending delays ahead of the Brexit transition deadline,” Bernard Brown, vice chair at KPMG UK said. Growth was supported by a recommencement of projects as well as healthy appetite for digital services and an uptick in spending in areas like e-commerce.
UK’s small businesses struggle with Brexit red tape
Some of the UK’s most profitable and innovative small businesses are being put off exporting to the EU because of the cost of the new customs rules impose on them, according to the Federation of Small Businesses. Small firms have been advised to set up EU-based entities to circumvent new trading barriers, but many cannot afford to do so, the Guardian reports.
Business leaders demand action over customs chaos
Britain’s largest business groups have warned of a significant loss of business if the difficulties exporters are facing at UK ports are not resolved. The CBI, the British Chambers of Commerce, the manufacturers’ group Make UK, the Federation of Small Businesses and the Institute of Directors said they had complained to Cabinet Office minister Michael Gove during a round table meeting on Thursday about “substantial difficulties faced by firms adapting to the new customs processes, sizeable obstacles to moving goods through the Dover-Calais route and the shortage of informed advice from both government and specialist advisers alongside a number of others.”
Early warnings of Brexit trade trouble emerge in UK data
Early signs of disruption caused by the UK’s departure from the European Union are emerging in economic data. According to IHS Markit, manufacturers and services firms have been hit hard by supply chain and export disruption. British factories reported the steepest increase in supplier delivery times among the six “flash” preliminary PMI surveys published by IHS Markit for the UK, France, Germany, Japan, Australia and the United States.
Half of remaining cash-points could disappear in two years
Some 13,000 cash-points were axed over the last three years, leaving just 54,400 remaining. But this figure could halve again by 2023, Which? has warned. The CEO of the consumer group, Anabel Hoult, has now written to the eight big banks urging them to guarantee they will preserve cash-points. The news comes just months after a report from PwC and the Local Data Company said an average of 55 outlets closed per month – including 235 in the first half of 2020. Ms Hoult said: “Ensuring the most vulnerable members of society have cash to pay for essential goods and services must be a priority not an afterthought. There is no doubt that more people than ever benefit from digital banking. That does not detract from the need to provide reasonable access to cash for the millions who need it.”
Political tax football
Chancellor Rishi Sunak has told a group of Conservative MPs that raising taxes this year will give him scope to cut them in the lead up to the 2024 election. The chancellor told the 1922 Committee of Tory backbenchers yesterday that he will have to make difficult choices this year to trim the UK’s bulging Budget deficit.
Covid-19 general news
There was another slight rise with 28,680 new cases in the UK yesterday with 1,239 more deaths.
Globally 591,520 new cases brought the total to 101.4 million with 2,191,598 deaths.
More than 86.4 million vaccine shots given worldwide
An independent commission in Germany said that the Oxford/AstraZeneca covid-19 vaccine should not be given to people over 65.saying there were “insufficient data” about the vaccine’s efficacy in that age group. AstraZeneca disputes the finding.
Novavax, a US pharma, released phase-three trial data for its coronavirus vaccine. Trials in Britain found it to be 89% effective, including against the more contagious strain discovered there. Results from South Africa however, where a different mutation rages, showed only 60% efficacy. Britain could approve the vaccine this spring. It has bought 60m doses, to be manufactured in Stockton-on-Tees.
Mexico overtook India as the country with the third-highest number of fatalities after the U.S. and Brazil
In China, a team from the World Health Organization began meetings in Wuhan to try to understand the genesis of the coronavirus.
Researchers in southern Brazil said they found two patients infected with different strains of the new coronavirus at the same time, Reuters reported. The patients, both in their 30s, had mild symptoms and did not require hospitalization. The cases raise concern among scientists that co-existence of two strains in the same body could speed up mutations of the virus.
Markets.
Yesterday the FTSE 100 closed DOWN 0.63% at 6526.15 but the 250 closed up 0.44% at 20368.25. In Europe the Eurotoxx 50 closed up 0.58% at 3557.04 while the broader 600 was only up 0.1%. European markets were sharply lower at the opening bell following cautionary comments overnight from the Federal Reserve and several underwhelming future guidance from some of the big US tech stocks despite posting above estimate figures for the last quarter. London was off more than 100 points in early trading but pared some of these losses to eventually close back above 6,500 points. Major indices in France and Germany also recovered from the lows to finish the session in positive territory.
Markets continues to engage in very volatile trading, with US stocks staging strong rebound. Overnight, the DOW rose 0.99%, the S&P 500 rose 0.98% and the NASDAQ rose 0.50%.
As for currencies, weakness in Australian and Canadian Dollars appear to be the more persistent near term theme. But Yen is not too far behind. Dollar is firm together with Sterling and while Euro and Swiss Franc are mixed. Sterling is at 1.1276 Euros and 1.3661 US Dollars.
Brent Crude is at $55.84 and Gold is at $1849. The oil price was modestly lower with declines fueled by potential vaccine delays and tighter restrictions in China, while gold prices also drifted as investors favoured the US dollar on the back of the Federal Reserve’s comments.
US Economy
America’s economy didn’t do as badly as feared and actually grew by 1%, quarter-on-quarter, in Q4 of 2020. It was still a sharp slowdown from the 7.5% jump in the third quarter, when lockdown easing boosted activity. GDP shrank by 3.5% over the year, the Department of Commerce estimated.
Paperchase rescued
Paperchase has been rescued, three weeks after entering administration. The stationary chain said the deal will save the majority of stores, however a number will close, leaving the business with a “smaller high street footprint”. A total of 90 of its 127 stores will be sold to new owner Aspen Phoenix NewCo, while 37 will permanently close. Approximately 1,000 jobs have also been saved – however 250 employees are at risk and have now entered consultation. Paperchase appoint administrators on January 5 in a bid to save its 127 stores 46 concessions. PwC said the process would give the chain 10 days to start rescue talks.
Boohoo in talks to acquire remains of Arcadia
Boohoo Group is in advanced talks to acquire the remaining components of Sir Philip Green’s high street empire, according to Sky News. Boohoo is said to have indicated to Deloitte, the administrator to Arcadia Group, that it will pay around £25m for Burton, Wallis and Dorothy Perkins, just days after agreeing to acquire Debenhams’ brand and website for £55m.
Workspace
Workspace Group reported a 3.4% fall in like-for-like occupancy, driven by the exit of customers that had given notice earlier in the year. Like-for-like occupancy in the quarter fell to 82.1%, while rent per sq. ft. reduced by 5.3% to £38.46.
General Electric Motors
General Motors said it would phase out the production of internal-combustion vehicles by 2035. The US carmaker is going all-electric, with 30 new electric vehicles planned by 2025.
Audit reforms coming ‘in next couple of weeks’
City AM reports that the BEIS consultation on reforms to the audit sector is understood to be coming out “in the next couple of weeks”, and is expected to be extensive. Scott Knight, head of audit and assurance at BDO, told the paper that the consultation will contain detail on the minimum standards for audit committees, among other things that “UK PLC will gasp at”. “I understand it’s coming in the next couple of weeks,” he said. “As I understand it the approach is to put the consultation out with everything in it, and go through the consultation and row back, rather than put a middle ground out there. It’s going to be a big consultation, really big.” It is understood that the consultation will also contain information on the Audit, Reporting and Governance Authority (ARGA) replacing the current audit regulator, the Financial Reporting Council (FRC). The FRC will eventually transition into ARGA, and is currently processing reforms to audit that can be implemented ahead of legislation.
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 2020 – 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.
You put up with the PAIN – now claim the GAIN!
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.
Did you know that your business is entitled to a minimum of £40 for every commercial invoice paid late to you over the past 6 years?
How many of your invoices are paid late each month – 20, 50, 100 or more?
At £40 per invoice that’s claim of £57,600, £144,000, £288,000 plus interest. The more invoices the bigger the claim!
At £100 per invoice it’s £144,000, £360,000, £720,000 plus interest.
For over 20 years, CPA has calculated and recovered Late Payment Compensation on behalf of Clients!
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 extra 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.