In Focus Collections
Stick or twist?
So far, this year has been a test for all businesses, consumers and families alike and it has been a time of reflection for many
Brian Gibson Head of business development, BW Legal
bgibson@bwlegal.co.uk www.bwlegal.co.uk
Summer has officially started which usually brings an increase in trade for the retail and tourism sector. But it feels like we cashed in our dog days a bit too early. We had record breaking weather in May and June was… well … wet. The cost of staff is often the highest
expense of a business, many have been utilising the government's Coronavirus Job Retention Scheme (CJRS) to retain their staff during this difficult period. Yet despite the endeavours of the CJRS, we are already starting to see businesses cut jobs. This is now a very serious turning point for employment.
Job loses Coming into summer, we are now seeing firms entering their survival mode. Just as prime minister Boris Johnson
was announcing the government would “build, build, build and deliver jobs, jobs jobs”, some of the UK’s biggest retailers and aviation firms were announcing 12,000 job cuts, all within the course of 48 hours.
The CJRS was supposed to continue until October, so why is this happening now? Currently furloughed employees will continue to be entitled to 80% of their wages until the end of October, up to a cap of £2,500. The government has an anticipation that people should be returning to work and with this, the level of grant under the CJRS will begin to gradually lessen. From 1 August, employers will be required
to pay employer national insurance and pension contributions.
36 Then from September, employers will also
be required to pay 10% of employee wages with the government paying the remaining 70%. Finally in October, the employer contri-
bution will increase to 20% with the govern- ment paying the remaining 60%. When making redundancies businesses
have to enter a period of consultation of between 30 and 45 days.
to have only delayed and not prevented it, which will no doubt increase pressure on chancellor Rishi Sunak.
Looking after customers The Financial Conduct Authority (FCA) has already invoked further support for consumer credit customers of credit cards, personal loans and revolving credit (store and catalogue debt). From 9 April, customers of consumer
When contacting customers, we must fully understand their circumstances and any barriers that they may be experiencing which may be affecting their ability to speak with us. For the whole sector, this is really about rapport building to find the right solution for a customer
Therefore, those firms affected the most
and with large amounts of employees have opted to plan ahead of the forthcoming increased employer contributions under the CJRS in order to reduce their workforce, and thus their overheads. This is a necessary and understandable
measure, but it does not paint the picture any less grim. So far the government has managed to
delay the long-lasting economic impact of a mass spike of unemployment but it appears
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credit who had been hit financially by the coronavirus could request a temporary payment freeze on loans and credit cards for up to three months and personal current account customers who were already in an arranged overdraft could have up to £500 of that facility charged at zero interest for three months also with no effect on their credit rating. On 19 June, the FCA extended this
scheme until 31 October for customers coming to an end of a payment freeze, as well as those who are yet to request a payment freeze or an arranged interest-free overdraft of up to £500.
Where next? When contacting customers, we must fully understand their circumstances and any barriers that they may be experiencing which may be affecting their ability to speak with us. For the whole sector, this is really about
rapport building to find the right solution for a customer. More than ever, this is vital. We are finding customers impacted to
different levels, we are focussed on a solution- based approach in these circumstances for each individual.
July 2020
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