The Business which were ignored are now paying the price
For all the time that I have been involved with the Forum of Private Business, there have been three business sectors that have been a concern, for our members who work in them. As a result, we have spent a lot of time and effort campaigning on their behalf and doing our best to bring these sectors and their issues to the attention of local and national governments who are in a position to be able to help and do something about them. It has taken the Coronavirus outbreak to bring the issues in these sectors clearly into focus and they can no longer be ignored by the government and we look forward to having a constructive conversation with them in order to make the required changes.
For far too long government has consciously or unconsciously added costs to these businesses by increasing the living wage, adding auto-enrolment pensions, bringing in digital tax and adding layers of regulation and rules. But the care home businesses can’t pass these increases on to their customers, as many are local authorities, who have seen their budgets shrink in recent years. They set the price they will pay and in many cases, the care of our loved ones is decided by price rather than need, it should be based on the care required not the price the authority wants to pay.
This inevitably leads to pressure on quality and service levels, which are set out in the care act, it’s not about one size fits all, care should not be based on price, it should be based on the needs of the individual. It means that many care homes are in a fragile state as they do not have the margins to provide any kind of shock absorber in times of crisis, we think that the treasury is aware of the issue but for them, it’s not been broken enough for them to act, well the cracks are now showing and its time to do something!
High Street Independents
In recent years we have seen a sharp decrease in the number of independent retailers and more and more empty units on the UK high streets. The blame is usually laid at the door of internet shopping and a change in the shopping habits of many consumers, but we have seen examples of good practice by some local authorities who have invested a lot of time and money in their town centres and seen a complete turnaround, you only have to look at Altrincham where it is now one of the most desirable places to live in the UK, with a thriving market and high street businesses around it.
The UK’s retail sector is the biggest employer in the UK, but the government put changes down to Internet shopping and market forces. But with some focus and resource, we believe many of our high streets can be rejuvenated. It’s not all about money, it is about generating creative and innovative ideas, learning from these, sharing the best ones and developing working models that can be replicated throughout the country. The Government need to help as many of our small independent high street businesses alive during the Coronavirus crisis and when the lockdown is lifted include our high streets into the UK’s industrial strategy developing effective actions for change.
Regulated Tenanted Pub estates
This particular business sector has its own unique set of issues that have developed over many years, government action led to the introduction of large pub-owning retail estates, who were in some cases no longer brewers but just landlords whose properties happened to sell beer. These businesses also operated a tie, basically a buying contract originally intended to make sure the breweries beer was sold in the pubs they owned. It has manipulated over the years to include almost any product you purchase for sale in your tenanted pub. As a result of years of poor behaviour and bad business practice, these big pub companies became regulated, with the introduction of the pubs code and the appointment of a new adjudicator to police the code.
A number of Family brewers operate the tie in a fair and equitable manner but many big pub companies do not, they squeeze as much margin out of the pubs as they can leaving many publicans with no savings, minimal income and a degree of debt, which has now been exposed during the coronavirus lockdown. Many of these pubs were already in trouble, now many will not survive in their current form and the lie that many in the trade had perpetrated, that all was well, the model working and people queuing up to get a pub have been exposed as false. It’s time for Government to stop listening to the powerful lobbying parties, to truly get an understanding of what’s going on and start acting upon it.
The obvious outcome of the coronavirus lockdown will be that many small and micro businesses will not survive despite all our best efforts. Part of the problem was that Government and their officers did not listen to the issues and chose not to act, they have no choice now and need to start engaging with all three sectors in order to truly understand the issues and do something about them!