Zombie firms weigh on the economy – business news 6 October 2020.

James Salmon, Operations Director.

Zombie firms weigh on the economy, Service sector figures out, Sunak warns of tough choices ahead, covid-19, market and lots more 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.

Increase in ‘zombie firms’ weighs on economy

Russell Lynch, writing in the Telegraph, discusses so-called ‘zombie firms’ and their effect on the economy. He quotes Bank of America Merrill Lynch which says the “build-up of zombie companies can make it more difficult for economies to escape vigorously from recessions, and can potentially hinder longer-term trend rates of growth.” Insolvency veteran Nick Hood, meanwhile, stated: “I think there will be a surge of insolvencies next year because I think all those gloves will be off and all those companies will start to go bust. There are a number of sectors that are going to be irreversibly changed by the pandemic, not just hospitality.”

Services sector figures released by IHS Markit

The IHS Markit/CIPS Purchasing Managers’ Index (PMI) for the services sector fell to 56.1 last month from August’s score of 58.8. However, although the pace of the recovery has slowed, the reading was better than an initial “flash” estimate of 55.1. Any figure above 50 indicates expansion. IHS Markit chief economist Chris Williamson commented: “The UK service sector showed encouraging resilience in September, with business activity continuing to grow solidly despite the government’s Eat Out to Help Out scheme being withdrawn.” He went on: “Unsurprisingly, spending in the restaurant sector slumped after spiking higher in August, and many other consumer services activities showed a similar slide back into contraction as renewed lockdown measures were introduced, causing the overall rate of expansion to moderate.” Meanwhile the final composite PMI reading for the eurozone was reduced to 50.4 last month, against 51.9 in August.

Sunak warns of hard choices ahead

The Chancellor yesterday told the Conservative Party conference that the Government has a “sacred responsibility” to balance the books for future generations warning that there were “hard choices” ahead. Rishi Sunak indicated that not all Conservative party manifesto promises will be easy to meet considering the expenditure on the coronavirus crisis arguing that flexibility will be required. Mr Sunak said that the “mismatch” between public spending and tax revenues “can’t go on forever”, adding that balancing the books was “economically and morally” the right thing to do. The Telegraph reports on fears that the Government has political cover for a wealth tax to plug the budget shortfall after an Ipsos Mori poll found 41% of the public support the move over other revenue-raising measures. Elsewhere in the paper, Matthew Lynn says Sunak has the perfect opportunity now to “ rip up the entire tax system and start again from scratch”.

New framework to help businesses deal with Covid loans

The Treasury is in talks with the banking trade body, UK Finance, to develop guidelines for the treatment of borrowers using the state-backed bounce back loan scheme should they fall into difficulty. The Government and the finance industry are working on a code that will establish a standardised process that borrowers could expect, including offers of forbearance to help struggling businesses to stay afloat. However, industry sources say banks will resist applying the framework to other emergency state lending programmes. Kevin Hollinrake, a Conservative MP and co-chairman of the all-party parliamentary group on fair business banking, welcomed the talks, saying that he hoped for a “standardised code of practice to make sure that businesses are fairly treated and given time to restructure their finances should they run into cash flow difficulties”.

Duncan Smith hits out at firms following remote working guidance

The Mail considers how large City firms including PwC, HSBC and Goldman Sachs and have stalled plans to shift workers back to the office after Boris Johnson urged Britons to work from home again amid fears of a second wave of coronavirus. The paper cites former Conservative leader Sir Iain Duncan Smith, who says: “Smaller businesses cannot be up and running unless the big companies get their staff back to the office. It’s deeply unpatriotic of them to stay away from their offices, causing chaos for those businesses which rely on them and their staff. It will lead to massive job losses.”

Capitalism, not socialism, will hoist us out of the mire

Kate Andrews says in a piece for the Telegraph that it is capitalism, not socialism that will heave us out of this crisis and that Britain is lucky to have leaders who believe in the power of markets and enterprise. But the conditions need to be created whereby enterprise can start to flourish again, continues Andrews. And this does not mean a digital services tax on businesses that have adapted to the crisis by moving online. Employers should not face a financial burden for hiring new employees and workers should get to keep more of their own income, Andrews adds, as she urges the Government to put its free-market beliefs into action.

Market fears dampen house sales

Concerns about job security and worries about house prices are putting one in five people off buying a home, according to a survey by PwC. However, 10% of respondents said they are more likely to buy, partly due to the stamp duty holiday. Jamie Durham, an economist at PwC, said: “The pandemic is making many people consider their next move very carefully.” The firm predicts that if COVID-19 remains contained, house prices could grow by 1% in 2021. A second national lockdown could, however, see prices fall by 7%.

Covid-19 general news

Global cases pass 35.5 million and deaths top 1.04 million

Prime Minister Boris Johnson said his government is working to get the country “back to normal” by this time next year. Speaking to his Conservative Party’s annual conference, being held online this year, Johnson said: “Your government is working night and day to repel this virus and we will succeed, just as this country has seen off every alien invader for the last thousand years.”

The World Health Organization estimates that 10% of people worldwide have been infected with the coronavirus. That leaves 90% of the world at risk, said Mike Ryan, head of the WHO’s emergencies program, in a presentation to the WHO’s executive board.

Here in Britain, almost 8,000 people whose positive coronavirus tests were left off official records due to “technical issues” had still not been contacted by the U.K.’s test-and-trace program on Monday.

The US Centers for Disease Control (CDC) updated guidance on airborne transmission saying Covid-19 can be spread when more than six feet apart indoors – Evidence for transmission beyond six feet more likely in poorly ventilated, enclosed spaces and “often involved activities that caused heavier breathing, like singing or exercise,”

The French government has taken the decision to close Parisian bars from Tuesday for a period of two weeks to help tackle the spread of Covid-19, France reported 12,565 cases of Covid-19 infection yesterday.

PM Boris Johnson told the chief executive of Heathrow Airport that the UK will begin airport testing for coronavirus in two weeks. Speaking to Travel Weekly, John Holland-Kaye confirmed that the PM said ministers were to begin trials in the second half of this month.


Yesterday the FTSE 100 rose 0.7% and the 250 1.1% with similar gains in Europe. In Asia, currently, the Nikkei is up 0.47%, the Hong Kong HSI is up 0.75% and the Singapore Strait Times is up 0.55%.  China is still on holiday. Overnight, in the US the DOW rose 1.68%, the S&P 500 rose 1.80% and the NASDAQ rose 2.32%.

Investors seem to be taking the view the US presidential election is a racing certainty for Joe Biden. This follows a chaotic weekend during which US President Donald Trump was admitted to Walter Reed hospital with Covid-19 symptoms and then was released today after three nights, appearing healthy. His doctor said he had met the benchmarks for discharge, though the unusual combination of strong drug treatments he has been prescribed suggests he could have a severe case.  His physician said he would continue treatment from there, and he “may not entirely be out of the woods yet”. Several of the Mr Trump’s staff and aides have also tested positive for the virus in recent days.  Mr Trump urged other Americans: “don’t be afraid” of the virus. In a video released shortly afterward, Trump said “the vaccines are coming momentarily.

Biden said Trump’s Covid-19 inffection didn’t come as a shock because Trump had bucked safety precautions. “Anybody who contracts the virus by essentially saying masks ‘don’t matter, social distancing doesn’t matter’ I think is responsible for what happens to them,”

Car sales

UK Car Registrations fell 4.4% in September from a year earlier, according to the motor industry. That made it the worst September this century in what is normally the industry’s second most important month. There were just 328,041 new registrations in the month, said the Society of Motor Manufacturers and Traders (SMMT).

European Services

Restrictions on service-sector activity, triggered by a second spike of covid-19 cases, led the euro zone’s private sector to lose pace in September, according to IHS Markit’s purchasing managers’ index. Europe’s PMI fell to a three-month low of 50.4 (anything below 50 indicates a contraction). New business growth softened, while employment numbers fell for the seventh consecutive month.

Johnson vows to make UK the Saudi Arabia of wind energy

Boris Johnson will suggest in his address to the virtual Tory conference today that the coronavirus crisis should be used as a catalyst to invest in green energy and wind power. The PM will promise to power every home in the UK with offshore wind energy within a decade. Mr Johnson will say: “We will invest £160m in ports and factories across the country to manufacture the next generation of turbines. And we will not only build fixed arrays in the sea, we will build windmills that float on the sea — enough to deliver 1 gigawatt of energy by 2030, 15 times as much as the rest of the world put together.” “It was offshore wind that puffed the sails of Drake and Raleigh and Nelson and propelled this country to commercial greatness,” he will say.

Financial Services

The United Kingdom is looking to align its financial services regulation with major economic powers outside the EU, according to Rishi Sunak. The chancellor of the exchequer said today at a fringe event at the Conservative conference that the government will “review our regulatory framework” on financial services and that “not being inside the EU more generally gives us a chance to do things differently”.


Weir Group

Weir Group jumped after disclosing the sale of its oil and gas business for US$405m and use the proceeds to reduce debt. The deal also facilitates a US$70m cash tax benefit for Weir. The unit is being sold to Caterpillar.

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 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.

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.