Enterprise and Regulatory Reform Bill

Memorandum submitted by the British Retail Consortium (BRC) (ERR 23)

ENTERPRISE AND REGULATORY REFORM BILL: WRITTEN EVIDENCE

1. The British Retail Consortium (BRC) is the lead trade association for the retail sector, representing over 80 per cent of the retail industry. The BRC is the authoritative voice of retail, representing small, independent and large multiple retailers; food and non-food; on high streets, out of town, community and rural stores and online.

Introduction

2. Retailing is touched by these proposals perhaps more than any other sector. Firstly, we are the largest private sector employer, with 3m people working in retail. We are present in every community of any size and so deal with every local authority in the UK, and we trade in a very wide range of products and services. As a result we are touched by an enormous range of legislation, from consumer protection to competition law, financial services regulation to food hygiene, emissions control and energy savings to employment law.

3. As employers of 10.5% of the UK workforce, and in particular 1m young people making their first steps on their careers, it is vital that retailers can operate without undue administrative burdens. This will assist in business expansion and jobs growth as management time, talent and financial resources can be targeted on pursuing commercial opportunities rather than being tied up with red tape.

Employment issues

4. As the UK’s largest private sector employer, retailing is committed to providing good jobs that develop people and talent. We want to treat people well. Unfortunately from time to time there are employment disputes which cannot be resolved through internal company processes. We welcome the move to statutory arbitration as the first step involving external parties. We believe that many disputes can be settled through this common sense and conciliatory approach, to the benefit of both parties – and to the wider workforce and business. Pre-claim conciliation currently resolves 70% of voluntary cases and the Government’s impact assessment implies 14,500 tribunal cases could be avoided each year, also avoiding the attendant stress and costs for both parties.

5. We also support streamlining and simplifying processes, including the use of legal officers in determining low value, straightforward claims, and of judges sitting alone in determining points of law under Employment Appeal Tribunal procedures.

6. We would not support the introduction of a two tier system of employment rights. It would not be good for businesses and it would not be good for employees. The emphasis should always be on proportionate and outcome focused legislation, providing a clear framework for all businesses, regardless of size, and their employees.

7. In line with this, we oppose the introduction of penalties over and above the damages found by Employment Tribunals to be due to complainants. This is double punishment. The inclusion of the existence of a dedicated HR team as a test sufficient to warrant "aggravated" status for a case means that no medium or larger employer would have a defence against this charge. It would simply be a tax in disguise, not a measure to encourage compliance.

Primary Authorities

8. Retailers provide vital services to millions of customers, every day. They stand or fall by their ability to satisfy those customers in every store, in every community they serve. It is in their interests to be compliant with consumer protection regulations.

9. We endorse the Hampton principles on enforcement activity. Well managed and compliant retailers should be left largely to continue running their businesses to the satisfaction of their customers. Enforcement activity should be focused on rogue traders and those who persistently fail to comply with statutory obligations.

10. We believe that the Primary Authority Scheme delivers many benefits in providing customers with assurance their protection is not subject to a postcode lottery, in reducing costs to business, and in releasing resources in local authorities to focus on rogue traders and complaint-driven inspections, rather than on compliant businesses. It is important that inspection plans are complied with, and that the Primary Authority is given the opportunity to object to any deviation from it. A notice period of five days must be regarded as the absolute practical minimum for response.

11. We welcome any measures to strengthen, extend and promote Primary Authority and other pan-jurisdiction measures. Many of our members operate across the UK and would like enforcement arrangements on that basis – ie to suit business, not bureaucratic, needs.

Deregulatory measures

12. We welcome the intention of the introduction of sunset clauses and other deregulatory measures in the Bill, such as those on tv licence administration. However, we are not optimistic that these will all deliver their potential, given our experience with the Red Tape Challenge and One in, One out. We need to see genuine sunset reviews when the term is up, with a formal role for stakeholders.

13. We would like to see much greater scrutiny and enforcement of these requirements by the Better Regulation bodies. We are not interested in departmental regulatory budgets but, rather, the impact on businesses, sector by sector. When new obligations are imposed on retail we want to see others of equal impact removed for retail. Where on Whitehall this deregulation occurs is not the point. A case in point is the introduction of the Grocery Code Adjudicator, and the establishment of a new quango, where the ‘out’ relates to estate agents rather than retail.

Advice to businesses and consumers

14. We welcome moves to strengthen the regional and national perspectives of Trading Standards, given that many scams are perpetrated by organised criminals for whom jurisdictions and boundaries are meaningless. We sincerely hope that both the National Trading Standards Board and Citizens Advice are adequately resourced and appropriately skilled to achieve these aims.

Competition and Market Authority

15. We are keen to see the Competition and Market Authority function effectively in the consumers’ interest. It must not lose the OFT’s current advantage over its international equivalents in combining consumer interest with competition concerns.

16. In its operations the CMA too must take account of the costs on business from its activities. Consequently we do not think it is right to require the provision of information before it has even been established that a market investigation is warranted. Fishing trips would come at great cost to law-abiding businesses inadvertently caught up before a clear view on the need for investigation has been formed.

17. Neither do we agree that civil sanctions are appropriate for failure to provide information once an investigation is in train. This would lower the test and burden of proof required of the CMA before action is taken and could encourage over-use of what would become an over-bearing and draconian regime.

Conclusion

18. The BRC applauds the streamlining and de-regulatory provisions of this Bill; we welcome the opportunities to resolve employment disputes in a more conciliatory manner and to focus enforcement on rogue traders; but, as ever, there are devils in the detail which need addressing as the Bill proceeds.

June 2012

Prepared 29th June 2012