The day we launched our C-Store Champions network of retailers we asked everyone what industry and operational issues concerned them the most when running their stores. It may come as no surprise that red tape and rising business costs were right up there as the biggest concerns for the majority of the network. Four of our Champions give their views on the growing burden that is red tape.
How much of an increased burden has red tape become in the past year or so?
Nigel Dowdney: "Red tape has always been and will continue to be a burden on my time and my business."
Dave Newman: "Having to comply with the increased burden of red tape has had one significant impact on the way I run my business, in that I spend much more time in the back office role than actually in my shop on the front line, dealing with customers."
Susie Hawkins: "Red tape is forever increasing. It seems to be for the sake of bureaucracy and it can be quite depressing at times. If you look at something like risk assessment - how far do you go with that? The whole thing is completely out of hand. It's very important, but it'll get to the point where you have to do a risk assessment for your staff to go to the toilet! There's a certain amount of responsibility that people have to take for themselves.
"Unless you've got it covered in a risk assessment, you can be liable. All these things are to cover you for a potential claim from employees or customers."
In which particular area has it been most marked?
Tony Scott: "The main area of contention over the past year or so has been related to alcohol licensing. It's true that all of the 'admin' work was done in June/July last year and so therefore there's little or no more to do now, but as a result of the new regime we're faced with a huge increase in licence fees."
DN: "Health & safety and employment law are the two areas that I find the most time consuming. I could have chosen to ignore them, but I feel that, as with most red tape, it's about the government's drive for accountability - in other words, making us all directly responsible for our actions. Take, for instance, risk assessments. What shopkeeper is actually qualified to effectively assess the risks, and would they tend not to notice something that might cost thousands to resolve? So simply by completing a risk assessment you have complied with the law, regardless of its effectiveness.
"With three shops and more than 30 staff I decided to employ am organisation that specialises in health & safety and employment law. For £3,000 a year they provide me with all the paperwork and structure to enable me to comply, as well as annual review visits from their consultants and a 24-hour support line. It sounds a lot, but for £60 a week I couldn't employ anyone with that sort of knowledge base, as they keep me up to date with the ever-changing laws. As a result, I'm now overloaded with paperwork, but if I do experience a serious problem I can at least show due diligence.
"Two years ago when I was refitting one of my shops and had to make major structural changes, the plans were rejected on disability access grounds. To get planning consent my costs increased by £10,000, but the shop is on top of a hill and those in wheelchairs don't live on hills. In 15 years we have had only one person in a wheelchair come into the shop.
As a community store we provide a delivery service far superior to any multiple, in that you don't have to have internet access or a minimum spend, or pay a delivery charge, customers just give us a call and we drop the goods round."
SH: "Whether it's minimum wage, National Insurance and holiday entitlement going up, or changes to pensions - and I've just had an email about chewing gum tax - it's getting ridiculous. Businesses don't get to vote in elections so we're targeted a bit. I've got a National Statistics questionnaire sitting in front of me now. We seem to get hundreds of those and by law we have to fill them out. They ask some stupid questions. I've got to calculate my climate change levy on everything for a year - energy, fuel and so on. We also have waste regulations - there's something extra to do or pay for in every area in which we trade."
ND: "There's the increase in statutory holidays, smoking in public places, the change in smoking age with no help from government, plus waste regulations, test purchasing with no action against underage drinkers, the increase in capital gains tax, the Barker review. It's never ending."
What are the consequences of increased red tape to your business and to the independent retail trade in general?
ND: "Loss of profits!"
DN: "The main consequences are financial; my staffing costs have risen because I need to spend more time away from the shop floor. Years ago when I was building up my
business, I believed that with success I could increase my wage bill to allow me more time to focus on quality of life rather than sitting at a PC."
SH: "The consequence of all this is the demand on our time. You're not actually spending time developing your business and driving sales. There are no benefits going back into the business. Something like the minimum wage is a bit easier for us because we're bigger, but a single independent operator ends up working longer hours each time the minimum wage goes up just so they don't have to pay higher wage costs. If you added up all their hours, I bet they're being paid less per hour than the minimum wage.
"Everything seems to stifle the entrepreneur - that may be an exaggeration, but there are a lot of hurdles in the way. We want to develop our businesses and drive sales and grow the business that way, and increase staff wages because everyone has worked hard and driven sales, not because the government says so."
TS: "There are more hoops to jump through to comply with the licensing law, but the law is the law."
What should be done about it?
TS: "I'm afraid there's no going back for licensing now, but I do think the fee for the licence should be a flat one and not related to rateable values."
SH: "There are lots of things that can be done about red tape in general. Look at wages and all the tax credits - we now deal with those for our staff. Why not take some of this burden away from us? Instead of us being unpaid admin clerks for government, give us some assistance."
DN: "The government needs to recognise that the burden of red tape is choking small business. The multiples have human resources departments and whatever other resources it takes to meet all the red tape, but the small business must take exactly the same burden without any of this support. It's all about reasonableness in recognising that we can't continue to absorb all the changes and survive. It will only take an economic slowdown or recession for there to be some serious casualties."
ND: "Employ some small businessmen in the Houses of Parliament as advisors on massive salaries for working a few hours a week. Could you put my name forward, please?"