Firms urged to pay staff for jab absences – business news 13 August 2021

James Salmon, Operations Director.

Firms urged to pay staff for jab absences. Forcing people back into offices is ‘wrongheaded’. Union calls for permanent furlough system. GDP climbs 4.8% in Q2. SME profits fell in July.  Mortgage arrears at record low.  And card spending nears pre-pandemic levels plus more.

Firms urged to pay staff for jab absences
A poll of 2,000 businesses by conciliation service Acas shows that one in four companies is not giving staff paid time off to get their coronavirus vaccinations. While 59% of respondents were giving staff paid time off for vaccinations, 4% were not but plan to implement this in the near future, 25% said they were not and do not plan to, and 12% said they did not know. Acas chief executive Susan Clews said: “It’s in businesses’ best interests to have a vaccine policy that supports staff to take time off, as fully vaccinated workers are less likely to need longer periods of time off work to recover from Covid-19.” The Confederation of British Industry’s director of policy, John Foster, commented: “The vast majority of businesses are continuing their commitment to protecting staff and customers during the pandemic. This includes showing flexibility when the time comes for their staff to get the jab.” “We’d encourage all companies to demonstrate this same level of consideration towards their employees,” he added.

Starmer: Forcing people back into offices is ‘wrongheaded’
Labour leader Keir Starmer believes it is “wrongheaded” to force staff to return to offices, especially if they are being threatened with pay cuts for opting to remain working remotely. He told the Guardian: “People were asked to work at home. And they did, and they worked very hard. The idea now that people are being threatened, if they don’t come in when there’s no good reason – it’s wrong.” With Labour promising people a “right to flexible working”, Mr Starmer has urged employers and policymakers to consider the benefits of remote or hybrid working, saying: “Don’t stand in the way of that change. Actually embrace it, and put a framework around it.”

Union calls for permanent furlough system
Union leaders have suggested the UK should implement a permanent furlough system to protect workers, with the TUC saying the initiative would lessen the impact on the economy in the event of a  future crisis. The union said such a scheme could help lower unemployment, accelerate a recovery and “prevent widening inequalities”. TUC general secretary Frances O’Grady said: “A permanent short-time working scheme would help make our labour market more resilient and protect jobs and livelihoods”, adding that a “daughter of furlough” initiative designed to provide certainty to workers and businesses through future industrial change “would be a fitting pandemic legacy”.

GDP climbs 4.8% in Q2
The British economy grew by 4.8% in the second quarter, data from the Office for National Statistics shows.

Despite the climb in output, GDP remains 4.4% below the pre-pandemic level recorded in Q4 2019. Q2’s reading also fell short of a Bank of England estimate that the economy would grow by more than 5%. The ONS said the UK’s GDP growth for the second quarter was faster than those recorded by the US, France, Germany, and Spain, with the UK seeing the fastest quarterly growth rate among all G7 nations.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said the UK economy “has continued to rebound strongly” while Chancellor Rishi Sunak said the figures show that the economy “is on the mend”. “I know there are still challenges to overcome, but I feel confident in the strength of the UK economy and the resilience of the British people,” Mr Sunak added.

Reflecting on the challenges ahead, Yael Selfin, chief economist at KPMG, pointed to a “growing risk that a slowing pace of output growth could coincide with even higher levels of consumer demand in the short term, leading to an unwelcome burst of inflation”.

Thomas Pugh, UK economist at RSM, warned that “lacklustre business investment” could leave the UK economy exposed to long-term post-pandemic scarring.

Meanwhile, Deloitte’s chief economist, Ian Stewart, thinks economic output is likely to pass its pre-pandemic peak by the end of the year, saying the “pace of repair” has been “extraordinarily fast”.

The EY Item Club expects GDP to grow by 7.6% in 2021, despite a potential slowdown in growth in the second half of the year.


The post-pandemic reopening is gathering pace, with the economy growing more than expected in June as restrictions were lifted. The hospitality and health services sectors were among the main drivers of the 1% growth. Trade statistics added to the good news with exports of goods to the European Union recorded at above pre-Brexit levels for a second month in June.


Adidas is selling Reebok to Authentic Brands Group for €2.1bn as the German sports giant looks to double down on its core brand. The deal is a significant markdown on the €3.1bn Adidas paid for Reebok in 2006 — a move intended to help compete with rival Nike.

SME profits fell in July
An index tracking the turnover of more than 2,000 SMEs shows that small businesses’ profits dipped in July despite lockdown restrictions easing. This comes despite data showing profits climbed between May and June. The index, produced by Bibby Financial Services using five years of turnover data, dropped from 148 to 145. This compares with a pre-pandemic high of 154

Mortgage arrears at record low
UK Finance figures show that mortgage arrears remained at record lows in the second quarter of 2021, with 1,370 fewer mortgages in arrears at the end of June compared to the end of March. Overall, 76,270 homeowner mortgages were in arrears of 2.5% or more of the outstanding balance. The low rate of arrears is largely down to the Financial Conduct Authority’s mortgage payment holiday, which was introduced in March 2020 and enabled borrowers to defer mortgage payments by up to six months during the pandemic. The payment holiday, which granted 2.9m mortgage payment deferrals, came to an end last month. Steve Seal, chief executive of Bluestone Mortgages, said: “While it’s encouraging to see mortgage arrears remain close to historic lows, the picture could look very different in the coming months”, noting that payment support has finished and the furlough and the self-employment income support schemes are set to end in September. Vikki Jefferies at Primis Mortgage Network hopes lenders “will continue to be proactive in order to avoid a sudden jump in arrears as we move into the second half of the year”, while Tony Hall at Saffron Building Society said “it is inevitable that the situation will worsen as support tails off”.

Card spending nears pre-pandemic levels
Weekly economic activity indicators from the Office for National Statistics show that card purchases have risen to near pre-pandemic levels. Credit and debit card purchases have risen 4% in the last week, taking them to 99% of the levels recorded in the month before the coronavirus crisis.

HMRC pays back £33m in overpaid pension tax
HMRC has paid back £33m to people dipping into their pension pots this year, having found that a number of people paid too much tax when accessing their retirement funds. Nearly 10,000 people overpaid in the first three months of the new tax year from April to June, with each getting an average of £3,379 back from the tax office. An HMRC spokesperson said: “Nobody will overpay tax as a result of taking advantage of pension flexibility.”

BDO report reveals impact of pandemic on football
A report published by BDO has revealed the impact of the coronavirus crisis on English football clubs, with it found that more than 80% of clubs accessed the furlough scheme, while 70% deferred tax payments. The poll of finance directors from the top four leagues shows that three quarters of clubs reported financial difficulties. Despite the pressure the pandemic put on club finances, none said that they were on the verge of administration. Ian Clayden at BDO said that while support from the Government, football leagues and fans “has been significant … in the main, it is shareholders that have funded clubs through the most disruptive period in the sport’s recent history.” The report also shows that investors have not been put off by uncertainty surrounding the game, with 43% of Premier League clubs having been approached by prospective investors, with all of them from the US.



Tobacco giant Philip Morris is closer to buying U.K.-based asthma drug maker Vectura. Vectura’s board backed Philip Morris’ takeover offer over a lower bid from Carlyle

Tax on billionaires’ pandemic gains could cover vaccination costs
A new report suggests that a one-off 99% tax on the wealth billionaires collected during the pandemic would cover the cost of vaccinating every adult in the world. The report from Oxfam, the Fight Inequality Alliance, the Institute for Policy Studies and the Patriotic Millionaires also suggests that the levy on the world’s 2,690 billionaires could also cover $20,000 in cash paid to all unemployed workers. Even after such a tax was paid out, the billionaires would still be left with $55bn more than they had before the pandemic. Data from Forbes shows that billionaires increased their wealth by $5.5trn from March 2020 to the end of July 2021. The increase exceeds the $5.4trn billionaires gained between 2006 to 2020.  Morris Pearl, the chair of Patriotic Millionaires and a former managing director of asset manager BlackRock, said: “Our economies are choking on this hoarded resource that could be serving a much greater purpose … Billionaires need to cough up that cash ball – and governments need to make them do it by taxing their wealth.” Ben Marlow in the Telegraph argues against calls for the tax plan proposed in the report, saying: “A pandemic wealth tax might grab people’s attention but it would be regressive, unworkable, ineffective, and risks squandering wealth that already exists.”

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