PM warns of mass unemployment – Covid-19  business news 4 June 2020.

4 June 2020.

James Salmon, Operations Director.

The Covid-19 lock-down continues and we are having to make do in a new normal.

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.

PM warns of mass unemployment

Boris Johnson has warned of “many, many job losses” after the covid-19 crisis, saying high levels of unemployment as a result of the pandemic were “inevitable”.

Vowing that the Government will be “activist and interventionist” in tackling the matter, the Prime Minister pledged to invest in youth training and guaranteed apprenticeships for young people would be part of any jobs programme.

Meanwhile, two former Chancellors have warned that unemployment is set to hit levels not seen the 1980s.

Both Alistair Darling, the last Labour Chancellor, and Tory successor George Osborne voiced warnings before the Treasury Select Committee. Mr Darling said the UK needs to “get into the frame of mind where we’re thinking of 1980s levels of unemployment”, adding: “If it doesn’t happen, that’s great but I think we need to be ready for that and if we’re not people will ask why.”

Mr Osborne, when asked how the Covid-19 crisis compares with the financial crisis, said the country “didn’t really have to deal with mass unemployment” during the latter, adding: “We never faced the structural unemployment that we saw in the 1980s.”

Covid-19 general news

Home Secretary Priti Patel has confirmed that all overseas travellers arriving in England will have to quarantine for 14 days. Speaking in parliament, Patel said that the blanket approach to incoming visitors was “necessary”, but said they were temporary restrictions.

Germany will lift its travel ban on 29 European countries, including Britain, on June 15 and replace it with advisories. According to the new rules, if regional infections mount, bans to specific countries could be reinstated.

Countries are starting to open up with travel bubbles. Estonia, Latvia and Lithuania dropped restrictions for one another on 15th May, while keeping out everyone else; Australia and New Zealand are following their path. Denmark and Norway are now opening to each other on 15th June, but not to Sweden, which had a far looser lock-down.

Prime Minister Boris Johnson upped the ante in the reaction to China’s new security law in Hong Kong on Wednesday, promising to allow nearly three million people from Hong Kong to live and work in the U.K. if Beijing moves forward with the new law on the former British colony. Mr Johnson’s plan was given short shrift by China’s foreign ministry, which said it would “definitely backfire”. HSBC and Standard Chartered have given their backing to China’s new security laws for Hong Kong. Both banks made statements saying the proposed law can help maintain long-term stability in the troubled city.

Labour leader, Sir Keir Starmer has accused Boris Johnson of ignoring an offer to help build public support for getting children back to school. At Prime Minister’s Questions, Sir Keir said he wrote to the PM privately two weeks ago but had not received a reply.

The Trump administration selected five companies as the most likely to produce a vaccine for covid-19, down from a pool of about 12. They are a biotech firm – Moderna, ; the UK team effort of Oxford University and AstraZeneca; and three pharmaceutical giants Johnson & Johnson, Merck and Pfizer.

The architect of Sweden’s covid-19 plan, Anders Tegnell, , conceded that the country may have used too light a touch. Sweden, which encouraged voluntary distancing but did not lock down, has had a higher death rate than Norway and Denmark, which locked down. Mr Tegnell said that, in hindsight, the best policy might have lain between Sweden’s and those of other countries.


The FTSE 100 jumped by more than 160 points yesterday as investors flocked to risk and value shares despite the continued unrest in the USA. UK Mid Cap shares were also substantially higher with the FTSE 250 gaining 2.6% or 460 points to finish at 17897.

Asian Markets were mixed in Thursday afternoon trade as investors assessed the prospects of economic recovery from the coronavirus pandemic. In the US the S&P was up 1.36% and the Nasdaq was up 0.78% as economic data pointed to less severe damage from the COVID-19 pandemic than feared.

The bullish sentiment was echoed throughout Europe with the German and French indexes rising by more than 3%. Upwardly-revised PMIs in Europe seemed to provide the market stimulus, with ADP jobs data also proving better than had been feared. Total US non-farm private employment fell by 2.8 million in May, but outperformed a market consensus of 9.0 million.

The pound has softened, down to 1.252 USD and 1.117 Euros

Oil Prices dropped on Thursday, reversing gains on Wednesday, on concern over whether major crude producers will be able to agree to extend record output cuts, heightened by worries over a huge build in U.S. distillate inventories.

Gold Prices bounced after an equity rally fueled by signs of an economic recovery from mandated shutdowns sparked the biggest daily fall since 30th April 30 on Tuesday.

Services sector activity declines

The IHS Markit purchasing managers’ index (PMI) for May has revealed that activity in the services sector shrank last month to a reading of 29, up from all-time lows of 13.4 a month earlier but well under the 50 mark signalling growth.

IHS Markit’s Tim Moore remarked: “A number of firms cited limited opportunities to win new orders with clients placed on furlough, as well as a hit to workloads from the postponement of new projects Consumer demand also remained very subdued, with large areas of the service economy still in the planning stage of restarting business operations.”

Travelodge outlines CVA plan

Travelodge has launched a CVA under which landlords would receive 62% of rent due between the conclusion of the insolvency deal and the end of next year, with the proposal suggesting that if the restructuring plan fails to secure approval, the hotel group is a “likely to enter into administration or liquidation”.

Under the terms of the proposal, Travelodge’s owners would provide £60m of a new £100m debt injection, plus up to £40m of additional equity.

This would be used to pay landlords £230m until the end of December 2021, at which point full rents become payable.

Some landlords have criticised the proposal, with the Travelodge Owners Action Group, whose members own 400 sites, saying the tenants “are multi-billion-dollar offshore hedge funds” while the landlords are “for example, pensioners.”

Former Chancellors warn against tax increases

Three former Chancellors yesterday took questions from the Treasury Select Committee in a session considering the impact of the coronavirus pandemic.

Alistair Darling, George Osborne and Philip Hammond said that the Government should avoid tax rises and consider tax cuts either through a VAT reduction or national insurance payments, with Mr Hammond saying there was “no economic logic to increasing taxes in the short term”.

He added that there “may be a need for some short-term fiscal stimulus to the economy and that could be delivered most obviously through tax cuts.” Lord Darling said that cutting VAT could have an immediate effect by pushing down costs for consumers and increasing spending, saying: “If you want to stimulate the economy, the most obvious thing to do is a time-limited VAT reduction.”

Mr Osborne suggested business taxes should be lower, saying he “wouldn’t have gone ahead with sc rapping the 2p reduction in corporation tax”, suggesting it would “send a big signal that Britain is open for business around the world.”

Workers would pay more tax to fund recovery

More than three quarters of workers would be willing to pay more income tax to cover the cost of the Government’s covid-19 rescue package, according to a survey of 2,000 people by stockbroker AJ Bell.

The poll saw 77% of respondents say they would be willing to pay higher income tax, potentially in a time-limited “surcharge”.

On average, those polled would accept a 3.9% increase in the basic rate, which currently stands at 20%. While 38% would be willing to pay at least 3% more than the existing rate, 23% said they would be unwilling to pay any extra income tax.

FCA tells insurers to review product value

The Financial Conduct Authority (FCA) has directed insurance firms to consider the impact of covid-19 on the value of their products, saying they should evaluate services and detail any alterations within six months.

Examples of changes given by the FCA include changing how benefits are delivered, refunding some premiums or suspending monthly payments for a certain period of time.

Sheldon Mills, interim executive director of strategy and competition at the FCA, said: “Customers should expect value from the insurance products that they buy, but the exceptional circumstances of coronavirus may have materially reduced the value they are getting”.

Mark Turner, managing director at Duff & Phelps, comments: “Firms cannot rely on customers identifying inappropriate cover themselves.” “It’s critical that firms assess a customer’s risk of financial distress in a dynamic way – customers that were not even on the radar of vulnerability two months ago may now be exposed to serious financial difficulty,” he added.

Alliance calls for tax reform

The Taxpayers’ Alliance says taxes on employment and wealth should be scrapped, while business tax relief should be increased and stamp duty abolished on home sales under £1m.

The Alliance says “bold, powerful action” should be at the centre of measures designed to boost the economy amid the Covid-19 pandemic.

It says removing employers’ national insurance and replacing it with a 10% payroll tax would cut business payroll costs by 38%, while a temporary pause on employee national insurance would see the average worker pay £1,622 less tax this year.

Taxpayers’ Alliance chief executive John O’Connell said: “Now more than ever, Britain needs tax cuts, not taxpayer austerity. With the economy on its knees and millions facing unemployment, trying to tax our way out of it would be madness.”

Hodge: Block risky firms from state loans

Dame Margaret Hodge, former chairwoman of the Public Accounts Committee, has called on the Government to deny coronavirus loans to companies deemed risky by HMRC.

In a letter to Chancellor Rishi Sunak, Dame Margaret said: “If a company does not pay their fair share in the good times, they should have no access to public bailouts when times are tough.”

She also called for companies receiving state support to be barred from intra-company loans, with it noted these can be used to extract profits without attracting corporation tax.

Dame Margaret’s letter comes ahead of the Bank of England naming 60 businesses, including several of the country’s biggest, that have been granted a slice of £19bn in coronavirus corporate financing.

The Times’ Philip Aldrick says the list will raise questions over whether multinationals, many of which use legitimate tax avoidance schemes, should be banned or subjected to tougher anti-avoidance conditions.

Brexit & Banks

Bank of England governor Andrew Bailey has reportedly told UK banks to ramp up their preparations for a no-deal Brexit as the UK sticks to its target to strike a deal before the end of the year. Bailey told British lenders to accelerate their planning for a no-deal Brexit scenario in a call yesterday.

A banker briefed on the call between Mr Bailey and industry chiefs said Brexit had been “the number one agenda item” during the discussion.

Commenting that it is “fundamental to the Bank of England’s remit that it prepares the UK financial system for all risks that it might face,” the BoE said: “The possibility that negotiations between the UK and EU over a future trading relationship might not conclude in a deal is one of a number of outcomes that UK banks need to prepare for over the coming months.”

Public participation in equities is flagging when we need it most

KPMG analysis shows that while overall equity financing has held stable at around 50% of total funding for non-financial companies, the share of public equity is 55%, down from 75% in 2000.

ECB set to add €500bn of QE

With the European Central Bank (ECB) set to detail forecasts pointing to the impact the coronavirus pandemic has had on the eurozone, it is expected to announce a further €500bn of quantitative easing.

The Times notes that a German court recently ruled that the 2015 version of QE, the public sector purchase programme, should be reviewed, with PwC economist Barret Kupelian commenting: “We expect the ECB to remain undeterred by the recent ruling of the German constitutional court and to expand its programme.”

Germany surprises

The German government agreed on a massive 130 billion-euro stimulus package designed to spur short-term consumer spending and get businesses investing again in a plan that exceeded the top end of expectations by 30%.

They immediately agreed temporary reduction in VAT and also allocated funds for infrastructure projects to build out its 5G data networks, improve railways and also double incentives for electric vehicles.

However, in one of the most difficult issues in the talks, the all important German auto industry failed to get direct government support combustion engine cars.

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 11th THIS YEAR – 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 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.

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.

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

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

New PM should walk the walk and back small firms over late payments

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

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 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

Keep up to date with the latest news by following us on social media:-

CPA on Linkedin

CPA on facebook

CPA on twitter

See all our latest news here!

Housekeeping: Opening a New Account

Late payments are never good for business. What can you do?

Get paid earlier by understanding why late payments happen.

Protecting Your Business isn’t Half As Painful As You Think

The Good, the Bad and the Ugly – recognising the types of payers you do business with!

See our blog on how to communicate with your debtor early and clearly to set the framework for prompt payments

Everything You Always Wanted To Know About Debt Recovery (But Were Afraid To Ask)

Understand the “why” behind late payments

Read our blog on what to do when not paid on time

10 Bad Habits Every Credit Controller Should Give Up

The Credit Controller’s Best Friend

Debt Recovery: It’s Easier Than You Think!

How Managing Your Cash Flow Can Make You (and Your Business) A Success

Avoid insolvency – Don’t let your money go up in smoke

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

25 excuses for late payment and how to get around them.

Read our Cash Flow Advice

Read about our overdue account recovery service

Read our blog – What is credit management?

Read our blog – How to select a debt collection agency

20 ways to avoid identity theft

see our blog – 15 steps to avoid invoice fraud

Overcoming 5 common reasons for disputed invoices

As insolvencies rise, could you spot these warning signs in your customers?

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections