Gordon Brown calls for urgent budget help as 1 in 7 UK firms face collapse
January 27, 2021, 12:17 pm

Gordon Brown calls for urgent budget help as 1 in 7 UK firms face collapse

Gordon Brown said the London School of Economics finding that one in seven businesses might be forced to close by spring should be a clarion call to Chancellor Rishi Sunak.

Ex-PM calls for Treasury to get ahead of Covid crisis as LSE report warns 1m firms could fail by spring putting 2.5m jobs at risk

Gordon Brown has called for emergency measures to support businesses in the budget after new research from the London School of Economics warned almost 1m UK companies were at risk of failure in the next three months.

The former prime minister said the report’s finding that one in seven businesses – employing 2.5 million people – might be forced to close by the spring should act as a “clarion call” to Rishi Sunak as he prepares his tax and spending measures for 3 March.

Brown, who was prime minister at the time of the global financial crisis in 2008, said: “Governments cannot afford to be behind the curve – especially in a crisis. They have to be at least two steps ahead.”

Using data published by the Office for National Statistics, the LSE report found that the UK’s micro businesses – those with less than 10 employees – were at particular risk of going under as a result of damage caused by the Covid-19 crisis.

It estimated that 908,000 firms could be classified as at risk because they had either no confidence or low confidence in surviving the next three months. Of the total, 390,000 were registered for VAT and PAYE, while the remainder were unregistered because their turnover was too small.

The report was prepared for the Alliance for Full Employment, a body founded by Brown that includes metro mayors and the Welsh first minister, Mark Drakeford.

A separate report by the corporate recovery specialists Begbies Traynor found that 620,000 small and medium-sized companies (SMEs) were in “significant financial distress”, putting 2.8m jobs at risk.

Brown said it was clear many businesses were on a “cliff edge” and that a major collapse would occur without government action.

“If we are to save good small businesses that are innovative and forward looking but which, without help with their investment plans, are in danger of going under, the budget must bring forward measures. It is time to offer new hope to what will otherwise be dying firms.”

Sunak has offered a range of support to businesses since the pandemic first arrived in the UK early last year. In addition to the furlough scheme, the Treasury’s package of measures has included grants, loan guarantees, a business rates holiday, deferral of VAT payments, and a VAT cut for the hardest-hit sectors.

The LSE report said the chancellor needed to extend the scale and duration of government support, proposing a continuation of loan subsidies; and debt restructuring during the UK’s eventual recovery that would involve exchanging government loans for government equity stakes.

Prof John Van Reenen, one of the authors of the LSE report, said: “Without further policy action, businesses face a cruel spring of bankruptcy.”

source: Larry Elliott

Levant

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BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, held its Annual General Meeting (AGM) at the company’s headquarters in the Seef District.
During the meeting, shareholders approved all items listed on the agenda, including the ratification of the minutes of the previous AGM held on 26 March 2024. The session reviewed and approved the Board’s Annual Report on the company’s activities and financial performance for the fiscal year ended 31 December 2024, and the shareholders expressed their satisfaction with the company’s operational and financial results during the reporting period.
The meeting also reviewed the Independent External Auditor’s Report on the company’s consolidated financial statements for the year ended 31 December 2024. Subsequently, the shareholders approved the audited financial statements for the fiscal year. Based on the Board’s recommendation, the shareholders approved the distribution of a cash dividend equivalent to 10% of the paid-up share capital.
Furthermore, the shareholders endorsed the allocation of a total amount of BD 172,500 as remuneration to the members of the Board for the year ended 31 December 2024, subject to prior clearance by related authorities.
The extension of the current composition of the Board was approved, which includes ten members and one CBB observer, for a further six-month term, expiring in September 2025, pending no objection from the CBB.
The meeting reviewed and approved the Corporate Governance Report for 2024, which affirmed the company’s full compliance with the corporate governance directives issued by the CBB and other applicable regulatory frameworks. The AGM absolved the Board Members of liability for any of their actions during the year ending on 31st December 2024, in accordance with the Commercial Companies Law.
In alignment with regulatory requirements, the session approved the reappointment of Ernst & Young (EY) as the company’s External Auditors for the fiscal year 2025, covering both the parent company and its subsidiaries—Sinnad and Bahrain FinTech Bay. The Board was authorised to determine the external auditors’ professional fees, subject to approval from the CBB, and the meeting concluded with a discussion of any additional issues as per Article (207) of the Commercial Companies Law.
Speaking on the company’s performance, Mr. Mohamed Al Bastaki, Chairman BENEFIT , stated: “In terms of the financial results for 2024, I am pleased to say that the year gone by has also been proved to be a success in delivering tangible results. Growth rate for 2024 was 19 per cent. Revenue for the year was BD 17 M (US$ 45.3 Million) and net profit was 2 Million ($ 5.3 Million).

Mr. Al Bastaki also announced that the Board had formally adopted a new three-year strategic roadmap to commence in 2025. The strategy encompasses a phased international expansion, optimisation of internal operations, enhanced revenue diversification, long-term sustainability initiatives, and the advancement of innovation and digital transformation initiatives across all service lines.
“I extend my sincere appreciation to the CBB for its continued support of BENEFIT and its pivotal role in fostering a stable and progressive regulatory environment for the Kingdom’s banking and financial sector—an environment that has significantly reinforced Bahrain’s standing as a leading financial hub in the region,” said Mr. Al Bastaki. “I would also like to thank our partner banks and valued customers for their trust, and our shareholders for their ongoing encouragement. The achievements of 2024 set a strong precedent, and I am confident they will serve as a foundation for yet another successful and impactful year ahead.”
Chief Executive of BENEFIT; Mr. Abdulwahed AlJanahi commented, “The year 2024 represented another pivotal chapter in BENEFIT ’s evolution. We achieved substantial progress in advancing our digital strategy across multiple sectors, while reinforcing our long-term commitment to the development of Bahrain’s financial services and payments landscape. Throughout the year, we remained firmly aligned with our objective of delivering measurable value to our shareholders, strategic partners, and customers. At the same time, we continued to play an active role in enabling Bahrain’s digital economy by introducing innovative solutions and service enhancements that directly address market needs and future opportunities.”
Mr. AlJanahi affirmed that BENEFIT has successfully developed a robust and well-integrated payment network that connects individuals and businesses across Bahrain, accelerating the adoption of emerging technologies in the banking and financial services sector and reinforcing Bahrain’s position as a growing fintech hub, and added, “Our achievements of the past year reflect a long-term vision to establish a resilient electronic payment infrastructure that supports the Kingdom’s digital economy. Key developments in 2024 included the implementation of central authentication for open banking via BENEFIT Pay”
Mr. AlJanahi concluded by thanking the Board for its strategic direction, the company’s staff for their continued dedication, and the Central Bank of Bahrain, member banks, and shareholders for their valuable partnership and confidence in the company’s long-term vision.