the times | Monday June 29 2020 1GM 39Business
Large corporations that have received
help from the government to see them
through the pandemic should be forced
to pay their suppliers within a month, a
leading business campaign group has
argued.
At the end of last year, Britain’s small
businesses were owed more than
£23 billion in unpaid bills from custom-
ers but that figure is set to spike sharply
higher due to the economic shutdown.Pay bills on time if you take virus help, small firms demand
Tom Howard Almost two thirds of small companies
have seen invoices paid late or not paid
at all during the coronavirus outbreak,
according to research from the Federa-
tion of Small Businesses (FSB).
Wholesalers have been among the
worst affected, with 71 per cent of busi-
ness owners in that field claiming to
have suffered late or frozen payments.
Small legal practices, accountancy
firms and marketing agencies have also
been hit particularly hard.
Despite the growing number of latepayers, only 10 per cent of companies
surveyed said they had agreed to post-
pone payments from their clients.
The rise in late payments has had a
“debilitating” effect on small business-es and their cash flows, the FSB said, at
a time when many were struggling to
stay afloat.
To help tackle the problem, the FSB
has urged the government to make any
big corporation that has taken a coro-
navirus loan or tapped the furlough
scheme to commit to paying small firms
within 30 days “without exception”.
The group has also asked politicians
to toughen up the prompt payment
code. Under the code, introduced in
2008, big companies promise to pay 95per cent of their invoices within 60 days
but the FSB wants this cut to 30 days
and has called for fines to be imposed
on those who miss the deadline.
“Sadly, some unscrupulous corpora-
tions are trying to inoculate themselves
from the impacts of Covid-19 by with-
holding payments, or freezing them, at
the expense of small businesses,” said
Mike Cherry, chairman of the FSB.
“Our endemic culture of treating small
businesses as free credit lines against
their will must be brought to an end.ӣ23bn
Approximate sum owed to small
companies in unpaid bills
Source: Federation of Small BusinessesDame Jayne-Anne. The company
plans to sell packaged, anonymised
data to consumer research agencies
and may eventually look for
advertising revenue as well. It also
invites users to tip the service if
they are happy with a
recommendation.
In an age in which people are wary
of the amount of data that technology
companies hold and process, the
company’s name is a tongue-in-cheek
acknowledgement of the sensitivity of
its business model.
“We are going to be helping you to
snoop on big business to get the best
deals and not get ripped off. People
are only sharing with us what they
already share with their bank and
we’re as regulated as they are from
the data perspective,” she says.
However, she admits: “People have
said, are you sure that’s the right
name?”
“It’s inspired a little bit by Virgin.
When Richard Branson launched
Virgin in the 1970s, it was a bit risqué
and surprising. I think it’s
memorable.”
Branson’s pandemic woes — the
has faced criticism for asking for a
taxpayer bailout to save his group’s
airline, Virgin Atlantic — are not lost
on Dame Jayne-Anne, although she
says she hasn’t spoken to her old boss
recently.
“I think about him regularly but I
can see they’ve got a lot on their
plate. I feel extremely lucky to be able
to focus on a new business that is
right for the times rather than
focusing on a legacy business,
whether its airlines or banks. It’s an
accidental but nice place to be.”front end. It meant the digital team at
Virgin Money were made redundant.
They approached me and said, ‘Let’s
build a digital bank ourselves.’”
They soon decided against the costs
and regulatory burden involved in a
banking start-up, instead setting out
to modernise the price comparison
website.
“We like to think of it as a
comparison website 3.0; comparison
websites recommend general benefits
and you have to execute yourself.
What we’re trying to do here is make
personalised suggestions and then we
can execute [a switch] for the
customer.”Dame Jayne-Anne’s last stint as an
employee was a curiously brief one,
having taken over as UK and Ireland
chief executive of Salesforce, the
American business software giant in
October after being headhunted by
Marc Benioff, its founder. She left
after only seven months during a
broader management reshuffle.
“I left in order to focus on Snoop,”
she says. “There is nothing like being
able to be unconstrained, do new stuff
and work with who you want. I hope
we can build the next
Moneysupermarket or
Comparethemarket and that requires
absolute focus, you can’t do that off
the side of your desk.”
She had pulled out of the running
for a role on the Bank of England’s
Financial Policy Committee to take
up the shortlived Salesforce role.
“It would have been very
interesting. What a time for a new
governor to go in. Who knows, maybe
it’s something I can go back to when
I’m a bit older,” she says.
“All of these things would have
been different if Snoop hadn’t started
to take off. If I was sitting here with
50 customers, I’d be thinking, ‘Blimey,
I’ve definitely made the wrong
decision.’”
Like a traditional comparison
website, Snoop earns a commission
when users switch to a new provider,
a business model that has proved
contentious in the past, with sites
accused of hiding the best deals from
customers in favour of less attractive
ones that pay a higher commission.
“We make sure we are pointing the
customer in the right direction first.
The switch fee comes second,” saysGOING FOR GROWTH
Digging in the dirt requires a Snoop
Branson to launch Virgin Direct in
the mid 1990s and was chief executive
of Virgin Money between 2007 and
2018, steering it through the
acquisition of Northern Rock. She
also had a spell at Royal Bank of
Scotland. and in 2015 the government
asked her to lead a review into the
representation of women in senior
managerial roles in financial services.
Snoop is effectively a spin-out
resulting from Virgin Money’s
acquisition by Clydesdale last year.
“We had a brilliant team in Virgin
Money that was building a digital
bank. When Clydesdale bought the
business, they already had a digitalDame Jayne-Anne Gadhia had been tipped for a role at the Bank of EnglandJayne-Anne Gadhia
helped Virgin take on
the big banks. Now she
has a new challenge,
writes James Hurley
H
aving spent decades in
the upper echelons of
Britain’s financial services
industry, lockdown is
proving something of a
welcome break for Dame Jayne-Anne
Gadhia, the former chief executive of
Virgin Money.
“I’ve enjoyed slowing down. For
people who are the lucky ones, and of
course many people haven’t got the
opportunity, it gives you a different
and frankly better perspective on life,”
says the 58-year-old, who in recent
weeks has taken up growing
aubergines and baking.
“Now I’d much rather have an hour
in the garden than be heading off to
Heathrow to fly somewhere when I
can actually be on Zoom instead. It’s
taught me a lot of lessons around the
importance of a bit of quiet time.”
If she is sounding relaxed, it may
also be because she no longer has a
large company to worry about. While
her old banking colleagues fret about
ballooning debt and low interest rates,
she has been getting a start-up off the
ground that has the timely mission to
save people money.
Snoop, which has secured close to
£10 million worth of investment from
backers including Lloyd Dorfman,
who founded Travelex, and
Salesforce, the software giant, is a
financial management app that has
picked up about 50,000 users since it
was launched in April.
Snoop takes advantage of open
banking rules to connect to users’
bank accounts, consolidating several
accounts in one place and using the
data to give people personalised tips
on how they might save money, for
example by switching to a different
energy provider.
“We can see where they’re
spending their money and suggest
how they might spend it better and
that’s everything from utility bills...
to pointing out direct debits that they
don’t need,” says Dame Jayne-Anne.
Running a start-up with only 27
staff isn’t as different to being at the
helm of a large City organisation as
many assume, she says. “The
challenge of setting up a new business
is equally acute to running a large
one. It’s just a different number of
zeros.”
Dame Jayne-Anne read history at
Royal Holloway, University of London
before training as an accountant.
After deciding that bean counting was
not for her, she helped RichardCashing in on a wealth of experience
Dame Jayne-Anne
Gadhia says her
business, Snoop, has
been able to pick up
tens of thousands of
users despite only
launching a couple of
months ago because
the Covid-19 crisis has
made people concerned
about their finances.
“People want to save
money and you can
make recommendations
that are appropriate for
this difficult time.”
Much of her team is
made up of ex-Virgin
Money technology,
banking and marketing
staff and Dame Jayne-
Anne, 58, says they do
not fit the typical profile
of a financial
technology start-up.
“We’re not youngsters
in the garage. We’re all a
bit long in the tooth forthat.” It’s not necessarily
a bad thing, she adds: “I
was speaking to an
investor and he said
most successful start-
ups are like that — it’s a
bunch of people that
like to work together
and have seen how they
can do things based on
their skills and
experience in big
companies.
“Not all start-ups are
ideas from younger
people. We’ve got
hundreds of years of
banking experience
between us and that’s
going to be important.
“As we as bankers
looked at fintech over
the years, my concern
was always that they
were a bit more tech
than fin.”
The company had
offices in London andNorwich but the
promising start the
business has made as
staff worked remotely
during lockdown
prompted a rethink
about the premises in
the capital.
“We all already know
each other so working
from home has worked
extremely well. We were
renting premises in
London, we thought we
needed to be together
to get this thing off the
ground.
“This month we
should have renewed
our lease in London.
We’ve concluded that
we don’t need those
premises and it saves us
£200,000. We’ve
learned a very positive
lesson from lockdown
and it will make us more
financially efficient.”CHRIS RATCLIFFE/BLOOMBERG VIA GETTY IMAGES