Industry news round-up

Industry News

1. TheCityUK: UK firms swimming in £70bn of debt

UK firms have racked up £70 billion worth of debt, according to a new report from TheCityUK, with more than £20 billion of that coming from governmentbacked COVID loan schemes. The figure is down on the previous estimation of £102 billion, partially due to government stimulus packages introduced this year, the industry group said. Its research also revealed that nearly 40% of businesses will encounter difficulties in repaying their loans, up from a previous figure of 30%.

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2. Court rules on insurers over COVID business interruption claims

Business owners forced to close their doors amid the coronavirus lockdown have been told their insurance claims must be paid following a High Court judgment. The FCA brought a test case in front of the High Court earlier this year after insurers rejected business interruption insurance claims – even where lost earnings due to a pandemic appeared to be covered in policy wordings. Last month, the Court ruled on a representative sample of policy wordings.

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3. Pandemic saw 60% of SMEs change the way they operate

Santander research shows that 57% of SMEs adapted and changed the way they do business as a result of COVID-19. The poll of 2,050 senior leaders in UK SMEs shows that 18% rolled out alternative operating hours, 14% moved their business online and 13% changed products or services. On the speed with which smaller firms adapted to the pandemic and lockdown, it was found that over seven in ten of those who actioned changes did so before the end of March.

4. Landlords call for end of eviction ban

Commercial landlords have called on the government to drop a ban on evictions so they can serve notice on retailers who fail to pay their rent. Vivienne King, chief executive of real estate lobby group Revo, has asked Suella Braverman, the Attorney General, to prevent the freeze on evictions from being extended. King said: “While we recognise the moratoria were imposed as an emergency measure, that emergency must now be treated as having passed with the requirement coming to an end.”

5. MP to review competition laws

MP John Penrose has been appointed to lead a review of Britain’s competition laws, with the former minister understood to have been asked to draw up proposals on the matter in time for the autumn Budget. Chancellor Mr Sunak, who ordered the review along with Business Secretary Alok Sharma, has said he wants to “turbocharge our competition policy to make sure it is fit, especially for the digital age”.

6. Small business face local lockdown hit

Business groups have warned of the impact local coronavirus lockdowns could have on small firms, with British Chambers of Commerce director-general Adam Marshall saying that as local restrictions are likely to become more frequent, “a comprehensive package of support will be needed for affected firms”. Ministers have announced that smaller firms with a rates valuation, annual rent or mortgage bill below £51,000 that are forced to shut amid a lockdown would be eligible for £1,000 every three weeks.

7. Jobless total could pass three million

Economists have warned that new restrictions to halt the spread of coronavirus could push unemployment above three million by the end of the year, estimating that the jobless total could rise above the 3.28 million recorded in 1984. Economic Perspectives estimates the jobless total could reach 11%, or 3.75 million people, while Professor Trevor Williams, a former chief economist with Lloyds Bank Commercial Banking, says unemployment could hit 13%. The Bank of England last month predicted unemployment could reach 7.5% by the end of 2020.

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8. Shopper numbers slip

Market research firm Springboard has revealed that shopper numbers across UK retail destinations were down 6.3% last month compared with the month before, with the first month-on-month decline since April. Footfall across UK high streets declined 5.4% and by 5.2% at retail parks. While regional cities saw a 7.9% fall in footfall, the decline in central London was just 3%. Springboard said a dip in the month when the school year starts is common, but the scale is greater this year. The annual decline in shopper numbers stood at 27.5% last month, compared with a 25% dip recorded in August.

9. Sunak mulls tax breaks for businesses

Chancellor Rishi Sunak is considering tax cuts designed to encourage big companies to invest in machinery and factories in a move the Treasury hopes would boost the economy. The mooted plan would see firms given a full tax break on capital investment, allowing them to deduct the costs from their bills immediately. Currently, companies are given tax relief on the first £200,000 of investment, with a temporary two-year increase to £1 million expiring in January.

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10. FCA told to delay changes to its complaints scheme

The Financial Conduct Authority is being urged to extend a consultation that proposes a cap on compensation from its complaints process, with MPs concerned the timetable for completing it is unnecessarily short. The consultation on a cap of £10,000 for most compensation for losses in cases where the regulator’s actions or oversights were the “sole or primary cause of the loss” was being rushed, Mel Stride, chairman of the Treasury committee, said.

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