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A few of my friends and family have their own businesses. Until recently these were doing OK. This weekend I visited my friend up north and he says things are looking really, really grim for his export business and he thinks it may go to the wall in the next month. I spoke to my brother this evening who works for a central heating business in London and this looks like it may fold any time and his son's business in bathroom/kitchen installation which has been doing very well is now looking distinctly iffy. Another close friend is company secretary to an Internet software business and this too is right on the edge.

I would have said that to personally know this many people with small businesses is probably a bit higher than average. Is it just a coincidence that 100% of the people I know with small businesses are facing going bust imminently?

I'd appreciate the forum's views on this.

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A few of my friends and family have their own businesses. Until recently these were doing OK. This weekend I visited my friend up north and he says things are looking really, really grim for his export business and he thinks it may go to the wall in the next month. I spoke to my brother this evening who works for a central heating business in London and this looks like it may fold any time and his son's business in bathroom/kitchen installation which has been doing very well is now looking distinctly iffy. Another close friend is company secretary to an Internet software business and this too is right on the edge.

I would have said that to personally know this many people with small businesses is probably a bit higher than average. Is it just a coincidence that 100% of the people I know with small businesses are facing going bust imminently?

I'd appreciate the forum's views on this.

Have heard that a plumber friend is finding this year challenging to find work.

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I'm pretty sure the govt and the cohort of hangers on in the central bank have no idea what they have doen to the economy outside their rarified coterie of lobbyists, corporate lobbyists and cheap money / taxpayer subsidy junkies.

The small business sector is suffering and it is not the lack of debt that is causing it. It is eveything that they have strived to levitate - costs, interefence (regulation is a governmetn subsidy to large firms). They will have nigh on killed the small construction sector - both new and refurb by the time they have finished, materia costs are insane and enough to put ost people off before they get llabour plus 20% vat lobbed on top. Like I said last year construction and particularly small trade is going to take a clobbering and it won't appear in the stats (at least to start off with).

Edited by OnlyMe
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I've tried getting a joiner as I've got bits for someone to do. Approached several and never had a response back from them or they said they'd come and ring to organise a time to look at the job and then nothing. Eventually got one via the plasterer we are using.

However I can see that businesses that where doing OK are going to start to struggle as the economy constricts. In this climate it's who you know. If you've got the right contacts you'll survive, part of that is luck that the people giving you the work know the right people to stay in business.

The economy looks like it's heading towards a brick wall.

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It does appear that few businesses - big or small - these days are actually profitable.

Makes you wonder really - if everyone's losing money... where's it going...

Out of the country.

Manufacturing is not coming back, The setup costs are laughable. Trashing sterling has made import costs more expensive, think we will see a shocker trade deficit as a result soon. Even if you went with a highly automated production line there you;d have to import the machines/raw materials - they just got a lot more extensive, epic fail.

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C'mon the goal over the last ten years has been to destroy small businesses and get working people into benefits to vote labour, so the leader can talk about hard working people of this country (on benefits). Boom and bust economics, this is how this economy works except now because we had a massive boom we're having a massive bust.

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Ha! I tried getting a gas fitter person to come fix my boiler in December. I phoned about 3 locals who said no chance mate, not till spring anyway.

Gas/plumber probably the most reliabel main trade - high cost of entry and certification and costly to stay in, this limits the competition. Also the water or heating goes and you get that fixed as a priority over almosts anything in terms of household expenditure. Also busy in winter - frozen pipes, leaks, boilers and systems runing flat out, any breakdown needs to be serviced asap. Sumer the switch is to new build / renovation with house move projects mainly.

Edited by OnlyMe
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What we need is engineers and scientists to be properly rewarded. The very best enginerrs or scientists leaving the top universities go straight into the parasitic professions such as banking or law because that is where the money is. If we want to create things and generate wealth these are the people we need to look to.

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14,000 new zombie companies created since June

Article is dated November 12 but it must have gotten progressively worse since then....

There are now 160,000 zombie businesses in the UK, that is businesses only able to pay the interest on their debt but not the debt itself, according to research by insolvency trade body R3. This is nearly a 10% increase on the number of business owners who said in July they were only servicing their interest, when it stood at 146,000 (or then 8%, today 9% of all UK businesses). This follows a gloomy pronouncement last week from Sir Mervyn King that Britain, "may be in for a period of persistently low growth."

R3 President Lee Manning comments:

"The phrase 'zombie business' has been bandied around quite freely and looking at companies that can only service the interest they owe, but not the debt itself, is a practical definition of this term. I would add that the phrase also extends to those companies who are currently over-geared and cannot pay back the debt in full. We know that banks are displaying greater forbearance on existing debt, but when a business cannot get extra lending it will be unable to expand. Others would argue that this stagnation ties up capital that could be used for other, healthier businesses."

Of course in a normal recession these zombies would be put out of their misery but I suspect the banks don't want to write down the oodles of debt this lot carry until they can afford too or are forced too.

Across the pond with an economy that's fundamentally handled this crisis much better lots of companies have gone down or laid off people while in the UK unemployment has been well below historic highs in the teens you might expect. This is partly because UK tax payers are indirectly subsidizing employers paying low wages via low income tax credits but I also suspect the UK's flagging real economy has been much more dependent on easy credit flows than Ireland or Spain. It's not just the banks, it's their debt loving customers, too much of UK PLC is simply insolvent and that's fundamentally why its economy is dead in the water. Even if Osborne finally got off his backside and attempted to spark some life into this economy it's unlikely to respond until the dead tissue has been excised.

Which brings us to the noises Merv the Swerve has been making........

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If we had higher interest rates savers wouldn't be clinging onto their savings like grim death, the cost of shelter would reduce, the pound would not be plummeting as much meaning imports and hence the cost of living would be lower, but a minority of irresponsible spendthrifts would find themselves out of rope sooner rather than later. Let's keep them as low as we can until there's nothing left of the economy eh guys, that's the way, what a brilliant plan. And whilst we do it let's brag to the media that it is a matter of policy that rates are low and a sign we have a well run economy. Brilliant. Look guys the patient is bleeding all over the floor and will be dead soon, aren't I brilliant?

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Out of the country.

Manufacturing is not coming back, The setup costs are laughable. Trashing sterling has made import costs more expensive, think we will see a shocker trade deficit as a result soon. Even if you went with a highly automated production line there you;d have to import the machines/raw materials - they just got a lot more extensive, epic fail.

Dunno Flounders on BBC News managed to find a jam manufactury doing OK. :blink:

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Ha! I tried getting a gas fitter person to come fix my boiler in December. I phoned about 3 locals who said no chance mate, not till spring anyway.

IMV that's exactly why small and large businesses are going bust (or not doing as well as they could) - ignorance, poor customer service, rip-you-off-as-much-as-I-can-today approach etc etc.

IMV businesses that provide honest and quality service will do well in the recession. Shame there are not many of them around.

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14,000 new zombie companies created since June

Article is dated November 12 but it must have gotten progressively worse since then....

Of course in a normal recession these zombies would be put out of their misery but I suspect the banks don't want to write down the oodles of debt this lot carry until they can afford too or are forced too.

Across the pond with an economy that's fundamentally handled this crisis much better lots of companies have gone down or laid off people while in the UK unemployment has been well below historic highs in the teens you might expect. This is partly because UK tax payers are indirectly subsidizing employers paying low wages via low income tax credits but I also suspect the UK's flagging real economy has been much more dependent on easy credit flows than Ireland or Spain. It's not just the banks, it's their debt loving customers, too much of UK PLC is simply insolvent and that's fundamentally why its economy is dead in the water. Even if Osborne finally got off his backside and attempted to spark some life into this economy it's unlikely to respond until the dead tissue has been excised.

Which brings us to the noises Merv the Swerve has been making........

The fundamental problem is one of economic imbalances between merchantalist nations and the non-merchantalists. The merchanalist big three are germany, japan and china. Using wage suppression polices they have increased exports while suppressing internal demand.

As an example consumption in china accounts for ~35% of GDP, and investment ~50% of GDP. A healthy economy see’s consumption at 60-70% of gdp (we are at 56% and slowly falling).

The merchantalist wage supression by these nations has had a distortive effect on other economies, including ours, resulting in economic pressure driving down our wages as a means to compete. It has also had the effect of destroying much of manufacturing capacity.

But to do engage in such a competition is madness – It has created a massive global surplus in manufacturing capacity and a lack of economic demand. By giving in to this economic pressure, we have simply increased the global goods surplus while further shrinking world-wide economic demand. And that ends up putting more pressure on the other non-merchantalists to do the same – we nor anyone else can win that race, with each and every one of us chasing an ever shrinking pool of global demand. The expected outcome of all that is exactly what we are seeing now, businesses failing due to lack of customers, yet customers having unmet needs yet unable to afford the goods that businesses sell. The virtuous cycle of investment, employment, consumption fundamentally broken.

The old fashioned method of fixing this has been tariffs to force the merchantalists to correct the economic imbalances which they cause. Either they let wages rise or we make their goods cost as if they had let their wages rise. However, the neo-liberal doctrine that practically all nations have been following says that tariffs in all aspects are fundamentally evil. But without some sort of retaliation against the merchantalists they will not change their policies and continue to chase down global demand.

At some point, I expect the neo-liberal doctrine to be discarded and tariffs of some type will be implemented, perhaps as import certificates as muted by warren buffet.

http://en.wikipedia.org/wiki/Import_Certificates

AEP has also written on this a few days ago

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100023283/another-step-towards-an-east-west-trade-war/

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Out of the country.

Manufacturing is not coming back, The setup costs are laughable. Trashing sterling has made import costs more expensive, think we will see a shocker trade deficit as a result soon. Even if you went with a highly automated production line there you;d have to import the machines/raw materials - they just got a lot more extensive, epic fail.

Thats what the nutters in government dont get.Most big manufacturing plants import 90%+ of the parts from partners/plants abroad and put them together here.Add in the energy etc also priced in dollars and a falling pound stuffs manufacturing companies.The only real cost in sterling are wages and workers are better off working in the chip shop for 16 hours for tax credits rather than flog on in manufacturing on night shifts.

As you say set up costs now in the UK for manufacturing plants is incredible.

I know plenty of people still doing ok but thats because they are now doing 80% of the work cash in hand,none are showing much profit on the books as they simply cant pay and keep going.They are also paying their suppliers cash etc etc.

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Dunno Flounders on BBC News managed to find a jam manufactury doing OK. :blink:

Exports a smaller proportion than before so not organic growth, maybe just gutting the competition with cheap labour. Got themselves on the list of operators so presume they are heavy users of the cheapest labour they can find.

........

http://www.bbc.co.uk/news/business-21692532

Though the company has seen very healthy growth in exports since 2010, foreign sales have not actually grown as fast as sales at home.

Sales to China are up nearly 70% since 2010, and exports to Brazil are up more than 45%, but they still account for a tiny share of the total.

Because sales in more important markets like the US and Italy have been flat or falling, the proportion of Tiptree's business that comes from exports has actually gone down a little.

...........

http://www.totaljobs.com/careers-advice/content/bulgarian-and-romanian

Seasonal Agricultural Workers Scheme (For Bulgarian and Romanian nationals)

This programme allows growers to hire low-skilled workers on a short-term basis.

To be eligible for this programme you must be at least 18 years old and be from Bulgaria or Romania. Successful applicants will be able to work in the UK for up to six months. Additionally, you will need to have a work card issued from an approved Seasonal Agricultural Workers Scheme (SAWS) operator before applying for the programme. The Home Office uses nine operators to issue the cards. They are:

Barway Services (Formerly Gs Marketing)

Tel: 01353 727314

Address: Barway, Ely, Cambridgeshire, CB7 5TZ

Concordia (YSV) Ltd

Tel: 01273 422 293

Address: 19 North Street, Portslade, East Sussex, BN41 1DH

Fruitful Ltd

Tel: 0870 727 0050

Address: Unit 3, Honeybourne Industrial Estate, Evesham, WR11 7QF

Haygrove Ltd

Tel: 01531 633659

Address: Redbank, Ledbury, Hereford, HR8 2JL

HOPS Labour Solutions

Tel: 02476 857 206

Address: National Federation of Young Farmers' Clubs, YFC Centre, Stoneleigh Park, Kenilworth, Warwickshire, CV8 2LG

R & J M Place (International Farm Camp)

Tel: 01692 536337

Address: Church Farm, Tunstead, Norwich, Norfolk, NR12 8RQ

S & A Produce

Tel: 01432 880235

Address: Brook Farm, Marden, Hereford, HR1 3ET

Sastak Ltd

Tel: 01588 673636

Address: 1-7, BDC, Long Lane, Craven Arms, Salop, SY7 8DZ

Wilkin & Sons Ltd (International Farm Camp)

Tel: 01621 815407/815496

Address: Hall Road, Tiptree, Colchester, Essex, C05 0RF

Edited by OnlyMe
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If we had higher interest rates savers wouldn't be clinging onto their savings like grim death..............

More likely the stupidly high rate of VAT. 20% on top of whatever you're paying makes a lot of people hesitate at the least and postpone or cancel at worst. The price charged by VAT registered businesses sets the benchmark price. If you buy from a non VAT registered business the price they charge is in a lot of cases determined by the benchmark price.

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The fundamental problem is one of economic imbalances between merchantalist nations and the non-merchantalists. The merchanalist big three are germany, japan and china. Using wage suppression polices they have increased exports while suppressing internal demand.

As an example consumption in china accounts for ~35% of GDP, and investment ~50% of GDP. A healthy economy see’s consumption at 60-70% of gdp (we are at 56% and slowly falling).

The merchantalist wage supression by these nations has had a distortive effect on other economies, including ours, resulting in economic pressure driving down our wages as a means to compete. It has also had the effect of destroying much of manufacturing capacity.

But to do engage in such a competition is madness – It has created a massive global surplus in manufacturing capacity and a lack of economic demand. By giving in to this economic pressure, we have simply increased the global goods surplus while further shrinking world-wide economic demand. And that ends up putting more pressure on the other non-merchantalists to do the same – we nor anyone else can win that race, with each and every one of us chasing an ever shrinking pool of global demand. The expected outcome of all that is exactly what we are seeing now, businesses failing due to lack of customers, yet customers having unmet needs yet unable to afford the goods that businesses sell. The virtuous cycle of investment, employment, consumption fundamentally broken.

The old fashioned method of fixing this has been tariffs to force the merchantalists to correct the economic imbalances which they cause. Either they let wages rise or we make their goods cost as if they had let their wages rise. However, the neo-liberal doctrine that practically all nations have been following says that tariffs in all aspects are fundamentally evil. But without some sort of retaliation against the merchantalists they will not change their policies and continue to chase down global demand.

At some point, I expect the neo-liberal doctrine to be discarded and tariffs of some type will be implemented, perhaps as import certificates as muted by warren buffet.

Yes.

The way I see it there are three powerful forces presently pushing down on the spending power of the great unwashed- The first being wage arbitrage caused by globalisation- which has been facilitated by the second - Technology and Automation. The third is our banking friends and their Financialization of the economy which has loaded everyone up with debt.

These three combined are eroding the spending power of labour leading to dwindling demand.

But instead of dealing with these issues our elites have a cunning plan- they intend to pursue the 'Internal devaluation' route whereby competitiveness will be restored by the suppression of wages and increased productivity.

But guess what happens to demand when everyone at the same time tries to suppress wages while increasing productivity? Demand falls while more stuff is brought to market leading to margin compression as price wars break out.

Maybe the horrible truth is that all those nasty limits and restrictions on things like imports and capital controls were in fact not regulatory weeds clogging the system, but were in fact vital to it's operation?

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The fundamental problem is one of economic imbalances between merchantalist nations and the non-merchantalists. The merchanalist big three are germany, japan and china. Using wage suppression polices they have increased exports while suppressing internal demand.

As an example consumption in china accounts for ~35% of GDP, and investment ~50% of GDP. A healthy economy see's consumption at 60-70% of gdp (we are at 56% and slowly falling).

The merchantalist wage supression by these nations has had a distortive effect on other economies, including ours, resulting in economic pressure driving down our wages as a means to compete. It has also had the effect of destroying much of manufacturing capacity.

But to do engage in such a competition is madness – It has created a massive global surplus in manufacturing capacity and a lack of economic demand. By giving in to this economic pressure, we have simply increased the global goods surplus while further shrinking world-wide economic demand. And that ends up putting more pressure on the other non-merchantalists to do the same – we nor anyone else can win that race, with each and every one of us chasing an ever shrinking pool of global demand. The expected outcome of all that is exactly what we are seeing now, businesses failing due to lack of customers, yet customers having unmet needs yet unable to afford the goods that businesses sell. The virtuous cycle of investment, employment, consumption fundamentally broken.

The old fashioned method of fixing this has been tariffs to force the merchantalists to correct the economic imbalances which they cause. Either they let wages rise or we make their goods cost as if they had let their wages rise. However, the neo-liberal doctrine that practically all nations have been following says that tariffs in all aspects are fundamentally evil. But without some sort of retaliation against the merchantalists they will not change their policies and continue to chase down global demand.

At some point, I expect the neo-liberal doctrine to be discarded and tariffs of some type will be implemented, perhaps as import certificates as muted by warren buffet.

http://en.wikipedia....rt_Certificates

AEP has also written on this a few days ago

http://blogs.telegra...west-trade-war/

What utter c0ck! There's no demand because UK/US banks ran up gigantic pyramid schemes of mortgage debt that have literally crushed our economies to death. China's savings 'glut' has been borrowed and consumed 10x over. Japan is now running a trade deficit. German imports are soaring.

Norway has overtaken the US and China to become the UK's 2nd biggest import source after Germany. UK exports to Germany surged by 20% over the first 3 quarters of FY 2012. Over 2,500 German businesses invest directly in the UK sustaining >400,000 jobs.

Warren Buffett is an Establishment lackey and Wall Street lickspittle. Few people have prospered more than the Orifice of Omaha from the doctrine of neoliberalism. Any latterday opposition he might express to it is historically dishonest, morally repugnant, and as phoney as the occasional commentaries he makes about income tax inequality.

Edited by zugzwang
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Dunno Flounders on BBC News managed to find a jam manufactury doing OK. :blink:

I thought the most telling thing in that report was that planning approval to extend the jam factory for export production had been three years in the planning pipeline. Meetings with every group of local objectors for 20 miles around, no doubt.

Edited by juvenal
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Dunno Flounders on BBC News managed to find a jam manufactury doing OK. :blink:

Luxury jam, though - it was Tiptree (my favourite!!)

Made me think of the two tier recession - with John Lewis and Aldi/Poundland doing well but nothing in between

Plus it inspired me to have a big splodge of their shredless marmalade for supper

Edited by oldsport
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  • 433 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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