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Opinion


Figures point to warning on slow growth prospects


Only 36% of UK SMEs expect to grow in the first quarter of 2016, as a muted outlook takes hold amongst the nation’s smaller businesses. In fact, growth expectations plummeted by 10% from the third to the fourth quarter of 2015, while almost one in five small businesses surveyed expect sales to decline in the first three months of the year. Recent Office of National Statistics data


shows growth in the UK economy slowed in 2015, with third quarter growth cut from 0.5% to 0.4%. Our latest SME Confidence Tracker reflects this dampened outlook amongst the country’s small businesses. SME confidence is plummeting, while


investment is only being made if it is essential. Concerns over the uncertain UK economic environment are strengthening, suggesting that SMEs believe the recovery is losing steam. Where businesses are planning to invest over the next quarter, their reasons are focused on maintaining ‘business as usual’ activities, such as replacing outdated equipment and keeping ahead of competitors. The research presents a gloomier outlook


than seen before. While, in the third quarter, small business owners were sensing dark clouds on the horizon, they now appear to be preparing for the storm. Government and policymakers would be


wise to heed the reality of SME experiences and hold off on any major changes to monetary policy. Small businesses need certainty in the UK economy and as much ‘forward guidance’ as possible.


David Postings Global chief executive, Bibby Financial Services


Fears for PAP consultation results


The collections industry was waiting for feedback from the Ministry of Justice (MoJ) on its proposed Pre-Action Protocol (PAP) For Debt Claims, as CCR Magazine went to press, after the consultation closed last month. The PAP was originally proposed in


September 2014 by the Civil Procedure Rule Committee, following a recommendation of Lord Justice Jackson in his final report reviewing civil litigation costs. However, in response to concerns expressed by the industry, it was then restructured to reduce the amount of documentation that creditors are required to provide to debtors in all cases at the pre-action stage. A two-stage approach was proposed,


whereby some information would be provided to debtors as of right with a letter of claim, with other information and documents being available on request, and debtors being prompted to consider what information they might wish to ask for. Debtors would also be provided with an


Information Sheet, designed to set out their rights and obligations under the PAP. However, speaking before the consultation


closed, Leigh Berkley, president of the Credit Services Association, insisted that a separate PAP for debt claims was “completely unnecessary, especially since 90% of claims issued go uncontested”. He said: “As the proposal currently


stands, the PAP is onerous, costly, and potentially detrimental


repeating actions and providing documents already available to the customer throughout the collections process. “We have argued that a better use of time would be to provide customers with clear


to customers,


information about what they can expect from the court process. “Consumers, in the vast majority of cases,


will have already received this information if they needed copies,” Mr Berkley continued, “and whilst the reply form attempts to reduce the amount of paperwork, it is likely that some consumers will simply ask for all the listed items.” He added: “The timings are also excessive,


especially where the consumer has indicated that they are seeking debt advice which cannot be obtained within 30 days. The current draft states that the creditor must allow ‘reasonable extra time’, and is, therefore, potentially open to abuse or challenge. What is meant by ‘reasonable’?” Mr Berkley said that, despite their strong


representations, the MoJ appeared keen to drive the PAP for Debt Claims forward.


10


www.CCRMagazine.co.uk


February 2016


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