Retailers are struggling in a quagmire of business regulation that is increasingly distracting them from running their stores. David Rees and Mark Wingett report.

Visit any c-store across the land and chances are you won’t see the store owner or manager on the shop floor. That’s because he or she is almost certain to be in the back office filling in forms or trying to get to grips with the latest government regulations.

It has now reached the stage that retailers are having to employ consultants or even additional staff purely to do paperwork to ensure they don’t unwittingly transgress the law.

The Labour Party made a pre-election pledge to combat burdensome regulation and, now installed as the government, has followed this up with a Better Regulation Action Plan, announced last month by Chancellor Gordon Brown. But retailers contacted by C-Store were unimpressed by the plan and called for the government to show more flexibility toward small businesses in terms of legislation and for paperwork to be cut down and simplified.

David Patient, who runs Nearbuys Convenience Store in Canvey Island, Essex, does not believe the government when it says it wants to cut regulation for small stores - not after seeing the paperwork he has to contend with spiral out of control in the 20 years he has been a retailer.

He says: “The red tape small businesses have to deal with is time consuming, restricting and ever-increasing. We redeveloped the store five years ago and are doing the same this year, but in that time the amount of legislation we have to go through to do so has doubled. I would say I spend a total of a fortnight every year just working through red tape.”

Not only is the legislation laborious, it impacts on David’s finances. “The more paperwork there is, the more you have to pay experts to help you understand it and implement it,” he says. “At the moment the three main causes of concern are the Disability Discrimination Act, the licensing laws and the working time practices. Then you have other European legislation on top of that. I’m actually pleased with the French rejecting the European Union (EU) Constitution, because it might stop even more paperwork coming our way.”

As for an answer, David wants the government to act and make legislation more proportionate for small stores rather than being the same for all businesses no matter their size. He concludes: “Small stores need to be made exempt from alot of legislation that’s aimed at larger companies. The government is always going on about encouraging entrepreneurs but all this legislation is not letting new businesses breathe and grow.”

Richard Burke, who with his wife Helen runs Thorrington Post Office and Store in Thorrington, Essex, is disgusted with the way the government treats small businesses.

He says: “They just don’t seem to care and they continue to pile more and more legislation our way. The latest thing is the new licensing laws, which are just a joke and mean more expense for us just getting someone to help us understand them. Then there’s the cost of hiring an architect because part of the requirements is a site survey. “Helen spends about an hour and a half a day just on the red tape we need to go through to run the store, which is way too much.”

Gordon Crump, who with his brother Malcolm runs the Spar store in Compton, Wolverhampton, says he spends most of his time in the store’s office dealing with the large amounts of paperwork they face.
He says: “Spending all day in the back room office was not what I had in mind when we took on the store. Thankfully, my brother can look after things on the store floor but I don’t envy anyone who has to do this on their own.
“I have dedicated most of my time recently to understanding the new licensing laws, which are confusing, and everything seems to be in duplicate. Things need to change but I can’t see the government backing up the pre-election pledges with any positive actions.”

Dave Newman, who runs three c-stores in Hastings, East Sussex, says he has been bogged down for too long.

He says: “It’s that bad it makes you wonder whether it’s worth staying in business. I just want to serve the community and put the basics in place in my stores to do this, but the government seems determined to make the task as difficult as possible.

“The amount of legislation makes it feel like another form of tax to me. It’s not just the time spent on the paperwork but also the cost. Two years ago it would have cost me £50 to send one of my staff on a course to gain a personal licence to sell alcohol. Now it costs £175, which many retailers just can’t afford, especially if they have more than one store.”

Dave also believes the amount of legislation faced by retailers could cost them in other ways.
He explains: “Because there’s so much paperwork and much of it is confusing, it won’t be long before someone who hasn’t filled in the right form will be in serious trouble with the authorities over something that, with a little support from the government, could have been avoided. “The government needs to look at treating larger companies, who have people employed just to sort out the legislation, separately from smaller businesses that are doing all they can just to survive.”

Over-complication is the biggest problem with legislation that retailers face, according to Panna Patel, who runs two c-stores in the Bristol area. She says: “The paperwork we face is very time consuming and can also be an extra cost to the business. For example, we’ve hired a consultant to go through the licensing laws for us because you get frightened that you’re not doing the right thing. “The government needs to let owners of small businesses breathe more and also to be more flexible in its approach to the legislation it needs to apply to the small store sector. “The more legislation there is, the more panic it spreads to retailers, which shouldn’t be the case.”
The burden of paperwork for Shaan Chaundry, who runs two c-stores in the West Midlands, was so big he has taken on an extra member of staff just to deal with it.

He says: “It was just getting out of control and was something I just didn’t have time to deal with, so I made a very early decision to hire someone to take care of that side of the business. It may seem a drastic step but it has allowed me to concentrate on making the business a success. “I don’t think I would have been able to do that if I had tried to do it all myself, because the legislation was continuous and exhausting, and from what I can gather, it doesn’t look like changing.”

Richard Paltridge, who runs the Spar store on North Hill in Plymouth, Devon, says he spends three to four hours a week keeping on top of legislative requirements. Despite this, he has still had to get outside help to make sure he complies with the law.

He says: “At present, the major issue for me is the new licensing laws. I want to be able to sell alcohol 24 hours a day, and to comply with the legislation covering this I’ve had to commission a solicitor to hold my hand through the whole process because I can’t afford to get anything wrong.”

Richard doesn’t believe the government is going to do anything to help small businesses with excessive paperwork.

He continues: “This government wants central control, meaning more legislation, which will be constantly changing. This will not allow me or other retailers to put the time and effort into our stores that is required. How are we meant to compete with the multiples if this continues?”

Glenys Weaver, who runs the Harry Tuffins store in Bishops Castle, Shropshire, also believes the government is putting too much pressure on retailers when it comes to legislation.

She says: “There seems to be new legislation for health and safety every five minutes, and you can’t afford not to deal with it thoroughly. However, it does put a strain on how much time you spend actually being a retailer. “The new licensing laws throw up the same problem.

The government needs to be more flexible when it comes to legislation for smaller businesses and understand that we don’t have dedicated teams to deal with red tape. “It would also help if most the legislation they send out was in plain English.”

Introducing the red tape measure.
Welcome to the Red Tape Measure. In the following months we will be using it to rate new legislation in terms of how troublesome it will be for retailers. The greater the aggravation, the greater the measure.

Among legislation currently being implemented, the highest score would undoubtedly belong to the new licensing laws for England and Wales: a classic piece of bureaucracy, as it has set out to make a process simpler but has in reality made it more complicated and expensive.

Many retailers have reported to C-Store that the forms are lengthy, complicated and difficult to understand, while the requirement for a floor plan and for staff training in order to obtain personal licences has added huge levels of cost. Proposed reforms for Scotland have many differences to the English and Welsh model but will still feature separate premises and personal licences, which are the cause of much of the extra administration south of the border.

Other recent areas of legislation highlighted by retailers as being overly complicated are disability discrimination, health and safety, risk analysis and the Working Time Directive.

The 2005/06 legislative programme.
The new Labour government has announced a programme of 50 new bills to be introduced during the parliamentary year 2005/06. These range from animal welfare to violent crime, and there are a number that will affect the c-store trade in some way or another.

l The Identity Cards Bill will pave the way for the introduction of using biometric identity cards to give everyone legally resident in the UK a secure and reliable method of proving their identity and date of birth. While it will eventually be compulsory to own a card, it will not be compulsory to carry one.

l The Violent Crime Bill (England and Wales) will set out to tackle knife and gun crime but will also incorporate a new range of penalties for retailers of alcohol and anti-social drinkers.

The Bill will create powers for police to ban the sale of alcohol at licensed premises for up to 48 hours if the retailer has been found selling alcohol to under 18s; provide police with the power to exclude individuals at risk of carrying out alcohol-related disorder from a specific area for up to 48 hours; introduce Alcohol Disorder Zones (ADZs) which will require licensed premises to contribute to the cost of alcohol-related disorder in specific areas where it has been identified as a problem; and exclude individuals responsible for alcohol-related disorder from certain areas and licensed premises by imposing ‘Drinking Banning Orders’ which could run for up to two years.

And don’t forget the new licensing laws will come into effect on Thursday, November 24. All licensed premises have until August 6 to convert their existing licence, so do not delay any longer, or your licence will be at risk. Licensees that apply after August 6 will be forced to apply for an entirely new licence.

Brown vows reform.
The Chancellor of the Exchequer Gordon Brown launched the government’s Better Regulation Action Plan last month.

He promised businesses a million fewer inspections every year, a reduction in inspections of one third and a 25% reduction in form filling.

A Better Regulation Commission will be established, replacing the Better Regulation Task Force, intended to advise and challenge the government on regulatory reform and scrutinise plans for regulatory simplification. The programme of reform will be led by a new Better Regulation Executive, with John Hutton appointed as Cabinet-level minister to drive regulatory reform. Next month, the government begins a consultation on the Better Regulation Bill, which should become law by next summer.

It will reduce the number of regulators from 29 to seven, embed the ‘risk-based’ approach at the heart of regulators’ statutory duties and create tougher penalties for persistent offenders.

In October 2006, a Deregulation Bill will be introduced, containing deregulatory proposals based on suggestions by business and government departments.

A new Consumer Trading and Standards Agency (CTSA) will be set up to co-ordinate inspections at a local level, while the tax return for half a million very small businesses will be cut from 16 pages to four. Brown has also pledged to take his agenda to Europe, pushing for the risk-based approach to be at the heart of EU rule-making.

Brown says: “In the old regulatory model - which started in Victorian times - the implicit regulatory principle has been 100% inspection of premises, procedures and practices irrespective of known risks or past results. The new model we propose is quite different. In a risk-based approach there is no inspection without justification, no form filling without justification, and no information requirements without justification.

“A risk-based approach helps move us a million miles away from the old assumption that businesses, unregulated, will invariably act irresponsibly. The better view is that businesses want to act responsibly. Reputation with customers and investors is more important to behaviour than regulation, and transparency - backed up by the light touch - can be more effective than the heavy hand.”