But the news today that banks are charging the highest interest rates on authorised overdrafts since records began in 1995 – 19.09 per cent in October, according to the Bank of England, or some 38 times the bank’s base rate of 0.5 per cent – is enough to make your eyes water.
According to reports, Lloyds TSB – saved by the taxpayer two years ago, remember, and 41 per cent owned by the government – charges 19.3 per cent on overdrafts, with customers charged another £5 a month on top for access to their overdraft facility.
Coming as this does days after Barclays chief executive John Varley hinted that banks may start charging customers for personal banking – describing the concept as “idiosyncratic by the standards of the world” – it is enough to make you wonder, considering the banks’ somewhat tarnished reputation in the wake of the economic crisis that’s affecting so many people, just how out of touch with their customers they are.
Put sky high interest charges and fees for personal banking into the context of the bank profits – Barclays’ pre-tax figure £3.95 billion for the first half of 2010, for example, or Lloyds TSB’s pre-tax £1.6 billion for the same period – and it’s even more of a puzzle.
Research published last month by Consumer Focus found that three-quarters of the people it questioned had not even considered moving their current account business to another provider and only seven per cent had changed banks in the last two years.
As Consumer Focus concluded, customers’ reluctance to change means that banks have little incentive to raise their game, which means consumers may miss out on better deals and service elsewhere. In the light of today’s headlines, perhaps it’s time for customers to start voting with their feet.
For more information, please visit www.glazers.co.uk
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( 3 / 644 )A couple of months ago, a survey by XLN Telecom of more than 600 small businesses found that more respondents (67 per cent) rated broadband internet access as essential to running their enterprise than they did water or gas (39 per cent and 19 per cent respectively).
There’s no doubt that the internet has become integral to the way we work, rest and play these days and families and businesses across the UK, including those in more remote rural communities, will no doubt welcome the government’s announcement today of an £830 million investment in providing what Culture Secretary Jeremy Hunt calls a “superfast” broadband network for the whole country by 2015.
But it’s also refreshing to see the results of a BBC survey released today, which shows that although the number of empty shops on our High Streets is still rising, they are being replaced by retailers offering services that cannot be provided online.
For the survey for BBC TV’s Inside Out programmes, retail analysts the Local Data Company (LDC) visited 500 towns and cities in England, Scotland and Wales and found that businesses such as off-licences and travel agents were facing high closure rates, although the rate of increase in empty stores was slower than in 2009.
But it also found that a total of 2,633 restaurants, cafes and fast-food outlets opened in the first six months of 2010 along with 2,145 hairdressing and beauty salons.
AS LDC’s Matthew Hopkinson says: “The internet was widely heralded as the death knell for the High Street, but the data shows that shopping in person is still a key pastime for many."
Three cheers for that and long may it continue. Vibrant, varied High Streets are a valuable commodity for any town or city, bringing in visitors and income and building a sense of belonging amongst residents.
It’s not only the services that this new wave of High Street businesses are offering that can’t be done online. Cafes, hairdressers and beauty salons are also places where people meet, relax, talk and laugh with each other – and in a world where the pace of life, like broadband, is superfast for so many of us, that’s something that you can’t put a value on.
For more information, please visit www.glazers.co.uk
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( 3 / 497 )The Prime Minister’s ‘Big Society’ initiative received a boost from the nation’s businesses today, after a survey of 320 members of the Business in the Community charity said they would do their bit to help voluntary groups and charities – if red tape was cut.
Four-fifths of members said they would like to do more to support the communities in which they operated but were prevented from doing so by legal barriers, such as Criminal Records Bureau checks or rules which prevent welfare claimants taking part in longer work placements.
Many of the executives surveyed also called for the provision of ‘brokers’ – who could be seconded from local firms – to put companies who wanted to help in touch with projects which needed support. This would prove more efficient than dealing with requests for help on an ad hoc basis, they said.
It is certainly pleasing to see companies demonstrating such a sense of corporate responsibility and although it can never be guaranteed that good intentions will translate into improvements on the ground, there is certainly little for the government to lose by making it as easy as possible for the business community to put its aims into action.
David Cameron has pledged to tackle the issues raised ‘head on’, so it will be interesting to see whether making these changes will have the desired effect. For Mr Cameron to succeed in his plan for the voluntary sector to fill the gap filled by a shrinking state, he needs businesses to play their part.
For more information, please visit www.glazers.co.uk
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( 3 / 773 )New figures show that fewer businesses are deferring tax payments through the HM Revenue & Customs’ (HMRC) Time to Pay scheme, designed to help businesses during the economic downturn.
Figures highlighted by UK independent finance provider Syscap show that the value of Time to Pay arrangements granted by HMRC fell by 45 per cent over the last year from £830 million in Q3 2009 to just £460 million in Q3 2010. In the last quarter alone, arrangements fell 16 per cent from £550 million in Q2 2010.
R3, the Association of Business Recovery Professionals, said that the decline in the number and value of Time to Pay arrangements during 2010 reflected more favourable conditions for businesses post-recession and that the scheme had worked well in preventing the spike in corporate insolvency numbers that typically follows the end of a recession.
But it said that R3 research looking at the challenges facing businesses in 2011 found that almost a third (29 per cent) of insolvency experts thought that a squeeze on Time to Pay would be the most harmful potential development. The impact of public sector cutbacks and a modest rise in interest rates were joint second, with 23 percent each.
R3 President Steven Law said: “Our members have seen how invaluable the Time to Pay scheme has been to businesses. We believe that it is important that it remains available as a breathing space for viable businesses, but that it is not used as an alternative credit facility for ‘zombie companies’.”
R3 describes “zombie companies” as those that are able to service debt but not fund expansion.
LINK: Time to Pay (Business Payment Support Service)
LINK: R3 press release
For more information, please visit www.glazers.co.uk
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( 3 / 756 )As the nation slips and slides its way to work on yet another snowy day, here’s a spot of pre-Christmas cheer to warm us.
The latest Markit/CIPS purchasing managers' index (PMI), which surveys more than 600 businesses, reports that the pace of manufacturing growth hit a 16-year high in November, with factories recruiting at the fastest rate since the PMI began in 1992.
The index now stands at 58, up from 55.4 in October. With an index reading above 50 indicating expansion, British manufacturing seems to be making itself at home in growth territory.
And the record increase in recruitment also backs up expectations that the private sector will be able to replace the 330,000 public sector jobs now expected to be lost over the next four years.
These positive results are timely. It was only on Monday that Chancellor George Osborne said the UK was moving from a debt-based economy to one that invests and exports and part of the upward surge in manufacturing was due to increased demand overseas.
The health of the manufacturing sector also helps to strengthen the UK recovery as we prepare for the increase in VAT in January and the full impact of the cuts announced in October’s Spending Review make themselves felt.
Taken with the construction PMI due today and the services PMI due tomorrow, these results could be a significant indicator of just how firm the UK’s economic footing is as we gear up for the challenges of 2011.
For more information, please visit www.glazers.co.uk
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