Supporting small business  – news 20 July 2021

James Salmon, Operations Director.

Supporting small business, MPC member warns against ‘pre-emptive’ end to support, One in four firms wants furlough extension, Virus fear may stifle recovery, Nearly 25% of UK’s wealthiest households lack savings for an emergency and lots more business news.

Supporting small business – #MyHiddengems

As yesterdays lifting of restrictions across England came into effect,  the Federation of Small Businesses (FSB)  launched its #MyHiddenGems social media campaign shining a light on great local small firms and helping to encourage other so use and support them.

Pressures like debt, rising costs, skills shortages and international trade disruption are all causes for concern among small businesses so its a good time to remind people of the great businesses on our doorsteps that desperately need our support after their most challenging year ever. The FSB is encouraging the public to highlight their favourite, cherished local businesses in the hope it will increase their footfall and support great local businesses across the country.

The campaign encourages local people to spotlight the businesses they are particularly fond of using the hashtag #MyHiddenGems on social media to try to create a momentum of support for local companies.

Meanwhile, the FSB is also calling on shoppers to abide by the “house rules” of small firms across England. It says businesses are still positive about the future despite a delay to the ending of restrictions and mixed messaging around how to operate safely.

Half of small business owners (50%) predict that their business performance will improve in the next three months, compared to one in three (32%) who expect it to worsen, according to the new FSB study of more than 1,500 firms.

Nearly two thirds of small businesses surveyed (64%) said that operating costs had increased in the past quarter compared to last year, up 20 percentage points from Q1 2021. Four in ten (42%) cite inputs, such as raw materials and components, as a main contributor to this increase, up 12 percentage points on last quarter. Labour costs (36%), utilities (28%), and fuel (26%) are also frequently flagged as sources of rising outgoings as inflationary pressure takes hold.

The share of firms citing lack of access to appropriately skilled staff as a barrier to growth has soared to its highest level on record (37%), with the proportion of respondents citing it as a barrier up 18 percentage points compared to Q2 2019, before the pandemic hit. Input costs are cited as a barrier to growth by a quarter (25%) of respondents, up from 16% in Q1 2021 and just 11% in Q2 2020.

Amid mounting evidence that lockdowns have exacerbated the UK’s late payment crisis, half (54%) of respondents who successfully applied for credit in Q2 2021 did so in order to manage cash flow, up 9 percentage points compared to Q2 2019. With emergency loan schemes now closed, a third (32%) of those who applied for credit last quarter were rejected, the highest proportion since Q4 2015. Four in ten (37%) small businesses with debt now view their level of borrowing as unmanageable.

Two-fifths of small businesses with borrowings view their debt level as unmanageable! Our late payment crisis – which was already destroying thousands of small firms a year before the pandemic struck – has worsened through lock-downs. The pandemic has just given another excuse to professional late payers. Widespread poor payment practices have no place in a ‘build back better’ approach to economic recovery. They must be tackled. Talk to CPA about how we can help.

MPC member warns against ‘pre-emptive’ end to support
Bank of England rate-setter Jonathan Haskel has warned against withdrawing economic support just as the Delta variant’s surge threatens the recovery. The external member of the Bank of England’s Monetary Policy Committee railed against warnings from fellow rate-setters over soaring prices, arguing that “tight policy is not the right policy”.

During an online webinar at the University of Liverpool management school, Mr Haskel said: “The economy is fully not recovered yet and faces two headwinds over the coming months: the highly transmissible Delta variant and a tightening of the fiscal stance.

Against this backdrop, risk-management considerations lean against a pre-emptive tightening of monetary policy until we can be more sure the economy is recovering in a manner consistent with the sustained achievement of the inflation target.”

One in four firms wants furlough extension
A YouGov poll for the Sunday Telegraph shows that almost a quarter of British firms want the furlough scheme extended beyond the end of September cut-off. The report shows that 23% of companies want the support to continue, up from 16% in a similar poll in March. The analysis shows that 70% of firms have no staff on furlough, while one in 10 have half or more of their workforce in the scheme.

Overall, more than a million workers still remain in the Coronavirus Job Retention Scheme. YouGov data analyst Eir Nolsoe warned that the end of support measures was “likely to have a significant impact”. She added that while as many as one in four businesses feel support including the furlough scheme and a VAT cut for certain industries should be extended, “these numbers are even higher in the hard hit industries of hospitality and leisure.”

The survey also found that while Government guidance saying staff should work from home where possible is being scrapped tomorrow, only a fifth of companies will insist on all staff returning to the office for five days a week. More than 40% will allow all or most of their employees to work from home at least some of the time compared to 24% before the pandemic.

Virus fear may stifle recovery
The post-pandemic economic recovery may be held back by concern over the number of coronavirus cases, with analysts suggesting people may not rush to spend money saved during the lockdown when restrictions are lifted.

Allan Monks, an economist at JPMorgan, says reopening the economy as the delta variant drives up infection rates “is likely to produce more, renewed self-isolation and public caution, which could restrain growth”.

Fabrice Montagné, chief UK economist at Barclays, believes consumer caution may mean the economy remains below pre-virus levels, saying: “Some people, even if there are no government-imposed restrictions, might still overlay their personal restrictions.”

Oxford Economics economist Andrew Goodwin said that while the unlocking of the economy should drive spending, the “recent spike in Covid cases could discourage social consumption”.

Nearly 25% of UK’s wealthiest households lack savings for an emergency
Close to a quarter of the UK’s wealthiest households do not have enough savings to cover an emergency, according to a new report from Hargreaves Lansdown. A total of 23% of households with an income of £100,000 a year could not pay a large unexpected bill or cover their essential outgoings for three months using their savings.

Among the very wealthy who earn more than £150,000, 12% do not have enough savings.

Hargreaves Lansdown recommends that people of working age should have three to six months’ worth of essential spending in an easy access account to cover emergencies. This amounts to around £3,000 in savings on average. However, it believes that retirees should aim to have one to three years’ worth of savings – around £9,000 on average.

Over 40% of Hong Kong migrants plan to start businesses in the UK
A survey conducted by a charity supporting Hongkongers in the UK found that 42.5% of those intending to come to the UK plan to start their own business. Three-quarters of these are in the 30 to 50 age range with more than ten years of professional experience, such as accountancy, banking, education, engineering, finance and IT. As of the end of March, the Home Office has received 34,300 applications for the new Hong Kong BN(O) visa, and it predicted about 150,000 Hongkongers would arrive in the UK in the first year.


Markets around the globe dropped dramatically yesterday following a surge in covid-19 new cases. In the UK we saw the number of new cases rise by 48,161, the highest level in the top 10 largest covid-19 countries. Oil fell by as much as 7% following the new OPEC+ deal.


Apollo Global Management said it was no longer planning to make a bid for Morrisons and was instead considering joining a rival £6.3 billion bid for the supermarket chain led by Fortress.Fortress, owned by Japan’s Softbank, already had been joined in its per share bid by Canada Pension Plan Investment Board and Koch Real Estate Investments.

Inflation to add £10bn to government’s debt burden
Analysts at investment banks including Barclays and Bank of America expect inflation to reach at least 4% this year, adding £10bn to government debt costs. Prices in June increased 3.9% annually, but analysts expect the RPI to rise further as the severe supply and demand imbalances across the global economy pushes up costs. Martin Beck, senior economic advisor to the EY Item Club, said: “What had been a brighter outlook for the public finances now faces a threat from rising inflation and the risk that interest rates might rise sooner than expected.”

Unemployment soars among women over 65
The latest figures from the Office for National Statistics show more than 39,000 over-65s were unemployed between March and May 2021, a 53% rise compared with the same period in 2020. Older workers have been squeezed out of the workforce over the course of the pandemic, with women hit the hardest after more than triple the number were out of a job compared with a year earlier. In total, 21,000 women over the age of 65 fell into unemployment, according to Rest Less, an online community for over-50s, that analysed the ONS figures. Meanwhile, a further 151,000 women between the age of 50 and 65 were out of a job between March and May this year. Stuart Lewis, of Rest Less, warned that thousands more risk losing their jobs as the furlough scheme is wound down over the summer.

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 charge our members a fixed annual subscription irrespective of how high the debt value is!

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.

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.