Chief Executive’s Weekly News for 23rd June 2020

Dear All,

Detailed below is the Covid 19 Update and Weekly News for 22nd June.

Includes Bank of England and CBI Economic Updates, CBI Covid Update and HSE Covid Bulletin.

Have a good week.

 

Gordon Polson – Chief Executive

Federation of Bakers Ltd

Bank of England Agents’ Summary of Business Conditions Q2 2020.

 https://www.bankofengland.co.uk/agents-summary/2020/2020-q2

Overview

This publication summarises intelligence gathered by the Bank’s Agents between mid-May and mid-June. The Agents’ scores published alongside this document are based on information gathered between late April and late May.

A summary of information gathered by the Bank’s Decision Maker Panel is also published alongside this document.

Consumer demand

Spending on consumer services and non-food goods was significantly weaker than a year ago, though online sales of some products were strong.

Most store-based retailers of non-essential goods remained closed. Although online sales of homeware, furniture, computing and audio-visual equipment were strong, clothing sales were very weak and retail sales over the quarter as a whole are still significantly lower than a year ago (Chart 1).

Clothing retailers reported cancelling or reducing orders, in some cases by as much as a third. Some contacts said they planned to carry over up to half of their stock to next year in order to limit the need for discounting.

However, those stores that have been permitted to reopen in different parts of the UK, such as garden centres, DIY and homewares stores and car dealerships, reported strong demand.

And supermarkets and convenience stores continued to report stronger sales compared with a year ago. Food supply chains have mostly returned to normal and the availability of products has improved, though a few contacts said there were ongoing shortages of some goods, such as baking ingredients.

Other non-essential retailers in England are preparing to re-open on 15 June. Some contacts said they planned to reopen stores on a phased basis, starting with out-of-town locations. A few retailers have gone into administration and will not be reopening.

In general, contacts expect concerns about the economic outlook and social distancing measures to weigh on shopper numbers for several months after stores reopen, though a few thought there might be a short-lived boost to footfall when stores reopen initially.

Lockdown restrictions for consumer services are being eased to varying degrees around the UK. For example, in some parts of the UK, outdoor leisure attractions and some hospitality businesses are preparing to reopen on a phased basis from July.

Leisure industry contacts said quarantine restrictions on visitors to the UK and social distancing measures were likely to constrain activity for several months, with a few not expecting activity to return to normal levels for two to three years.

Airlines are planning to resume operations from mid-June and expect to reach around a third of normal capacity over the summer. The operation of international flights will depend on quarantine rules in the UK and other countries. Contacts said that as a result, any recovery in activity was likely to be slow.

In hospitality, a large number of restaurants, fast food outlets and coffee shops have already reopened for takeaway or delivery. However, contacts said that social distancing measures would make it unviable for some smaller restaurants to reopen for customers dining in, in future. Some restaurant chains plan to close some branches permanently.

CBI: Understand how the COVID-19 pandemic is impacting the UK and global economies.

The contraction in UK GDP in Q1 2020 – which constituted the fastest fall in output since the financial crisis – gave us a hint as to the scale of the decline in activity that we can expect in Q2. Subsequent data releases seem to confirm that Q2 2020 will see the deepest economic downturn in living memory. However, there are some initial signs that suggest the decline began to bottom out in May.

Looking ahead, the government’s current plan to gradually reopen the economy across June and July means that we can tentatively expect a broader improvement in activity in Q3. However, the outlook remains highly uncertain, with a potential second wave and a no-deal Brexit being the major downside risks to the recovery. There also are increasing concerns that the pandemic may result in some longer-term economic ‘scarring’ – such as losses in household incomes and reduced private investment – that will continue to damage the economy in the future.

The CBI Economics team continues to gather evidence on the impact of COVID-19 on UK businesses, through regular sectoral surveys (which now include special COVID-19 questions) and the collection of thousands of member anecdotes. As a result of this work, the CBI has been able to collaborate with the UK government to help businesses overcome the challenges they face. View the CBI’s breakdown of financial support for more information on those schemes.

CBI COVID 19 Update:
On Friday, we saw the UK’s Covid-19 alert level reduced from four to three. Under level three, the virus is considered to be “in general circulation” and there could be a “gradual relaxation of restrictions”. Previously transmission was considered to be “high or rising exponentially”. This welcome development comes after the Prime Minister announced a review into the 2-metre social distancing rule on 14th June. Businesses will be hoping for a speedy resolution to this review as this debate is critical. Health advice must absolutely lead the way, and whatever the outcome, any change must be coordinated with businesses and unions.

Last Tuesday saw the publication of the latest labour market statistics. Over 600,000 people were taken off the payroll between March and May, vacancies fell by largest amount on record, and hours worked fell at fastest pace on record over year. However, we are acutely aware that unemployment falls unevenly across society which further underlines just how vital it will be to create inclusive jobs in sustainable industries and drive the reskilling and retraining revolution as part of our recovery.

On Monday, many non-essential retailers reopened, and we have seen an initially positive reaction over the first few days. Experts estimate footfall increased over 40% across high streets, shopping centres and retail parks this week, with an uptick of around 51% in high streets alone. Alongside this, BEIS have published updated versions of the workplace guidance, available via gov.uk. The most substantive changes, include:

  • Further detail on employers’ obligations to monitor effectiveness of Covid-secure measures and revisit risk assessments if circumstances change
  • Following PHE advice, reducing time limit for returned items to be returned to shop floor, from 72 to 48 hours
  • Updated advice for travel to and from work, reflecting DfT’s guidance
  • Addition of Test and Trace service, and requirements

BEIS have also launched a mini campaign to encourage people to start shopping again and have been asking businesses and trade associations to post photos and updates via social media, using #OpenForBusiness.

On access to finance, we saw the latest loan figures published last Tuesday. As of 14 June, £38.22 billion has been lent to businesses, across three main schemes:

  • £26.34 bn – Bounce Back Loans
  • £10.11bn – CBILS
  • •£1.77bn – CLBILS

On the number of loans being approved, unfortunately, CLBILs has slowed again, compared to the other loan schemes which are progressing at a steady state. The CBI are continuing to push for progress on the remaining barriers to these loans being approved and are looking towards future government support needed. This includes continuing to work with partners across Europe to address State-Aid rules (designed for more normal times, pre-Covid), which are still hindering some CLBILs approvals.

We are aware of additional issues on access to finance which include securing accreditation for certain non-bank and fin-tech lenders in order that they have access to the Bank of England’s SME-term fund. Additionally, we are continuing to address the recapitalisation challenge and how we can help otherwise healthy companies that are now holding too much debt. TheCityUK have estimated this issue could lead to between £97 and £107bn of unsustainable debt by March 2021. This challenge represents a risk to financial stability, due to companies grappling with high levels of debt against the backdrop of ongoing constraints on demand and profitability

HMRC Update: From 1‌‌ July 2020, the Coronavirus Job Retention Scheme is changing.

Employers will be able to bring previously furloughed employees back to work part time and decide the hours and shift patterns they work to suit the needs of their business. From 1‌‌ August, employers will be asked to contribute towards wages costs.

For the latest information, join the following live webinar:

Extension to the Coronavirus Job Retention Scheme and flexible furloughing – we’ll take you through the changes, flexible furloughing, claim periods and key dates.

Choose a date and time

If you haven’t managed to join, we’ve also added more dates for our popular live webinar:

Coronavirus COVID-19 Statutory Sick Pay Rebate Scheme – you can get the latest on who can claim, who you can claim for, how to make a claim, what you may be entitled to, and more.

Choose a date and time

You can ask questions using the on-screen text box.

We will endeavour to bring you the most up-to-date information to keep you fully informed of changes as they develop.

Get help. Protect your business. Save jobs.

Modern Slavery: June’s newsletter gives you all the latest on tackling modern slavery in supply chains

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Steps all businesses should take to address the risks of modern slavery

 

Weekly Digest eBulletin
Coronavirus (COVID-19) – Stakeholder Bulletin

You were chosen to receive this bulletin because of the influence you have on others in your industry.

 

Please share it with your networks; you can help to save lives.

 

For the latest news visit our website.

Using PPE and face coverings during the outbreak

The coronavirus outbreak has not changed employers’ duty to make sure people are not exposed to hazardous substances as part of their work. 

During the outbreak, HSE has worked with others to develop guidance about current issues with Personal Protective Equipment (PPE).

 

Make sure you have read our latest advice on PPE.

 

You can also read our latest advice on using face coverings and face masks during the outbreak.

Tell us how we can help you work safely

We value your feedback as an influential stakeholder in your industry.

Your help will inform our approach to communicating key information to ensure businesses continue to comply with the law using proportionate risk management.

 

We would like you to please take 2 minutes to complete this survey.

Institute of Directors (IoD) coronavirus webinar with HSE Chief Executive, Sarah Albon

Our Chief Executive, Sarah Albon, is participating in an IoD coronavirus webinar on Friday 3 July 2020 (1pm to 2pm)

The webinar will consider the many challenges facing business leaders tasked with establishing a COVID-secure workplace for their returning staff.

 

Among the topics for discussion:

  • PPE for your workforce
  • Appropriate social distancing measures
  • Key considerations for implementing risk assessment
  • Effective health and safety management at board level

The webinar is free and you can register here

Join the ‘Open for Business’ Campaign led by Department for Business, Energy and Industrial Strategy (BEIS)

This week, many retailers across England have reopened and we’re keen to celebrate the hard work businesses and workers are putting in to ensure their workplaces are COVID-secure.

Government departments are encouraging all businesses to take photos in front of their ‘open’ sign this week and post them on their social media channels. They are being shared on government social media channels and other partners are sharing them too.

 

Please share this information with reopening businesses in your network and join in sharing and celebrating them on social media.

 

What you can do (businesses):

  • Take a photo of yourself in front of your reopening business (preferably in front of an ‘Open’ sign)
  • Post the picture on your social media channels
  • Use #openforbusiness
  • Tag the post
    – on Instagram: @beisgovuk
    – on Twitter: @beisgovuk
    – on Facebook: @industrialstrategygovuk

We are also looking for short self-shot photos or videos of ‘a day in the life’ of staff in reopening businesses, so we can show the extra measures businesses are taking to keep employees and customers safe.

 

You can get involved and email us with your photos.