Regulation, Regulation, Regulation
With the economic blizzard now upon us we need - not least - an understanding government. Do we have that? Not if we look at some of the plans currently on the regulatory table.
For example, the recent decision by the government to prevent the minimum wage being augmented with revenues from the discretionary service charge will not only cost employees more through previously exempt National Insurance payments but will cost businesses more too. The only beneficiary here is the tax man. More recently, we have the proposed new mandatory code of practice for liquor sales and pubs which includes - among other nonsensical ideas - the regulation that restaurants must provide a lined measured glass when diners share a bottle of wine.
The only beneficiary will be largely continental glass makers as restaurants will have to spend literally thousands of pounds on buying complete new sets of glasses. Other proposed licensing regulations are largely irrelevant to the needs of business. But what's worse, they will cost money to implement when money is now in very short supply. The Food Standards Agency is currently considering recommendations about food labelling on menus which could present huge problems for operators, particularly those which change their menu daily. This regulation was certainly implied by government minister Dawn Primarola MP in a recent speech.
More distantly, and without a much needed amendment (for which BHA is currently lobbying), new regulations being proposed for 2009/2010 in Brussels mean that restaurants may also have to list allergens on their menus in the same way that food manufacturers have to label pre-packed supermarket meals. Individual restaurateurs will simply not have the skills to implement these regulations without buying in expensive expertise. Is this really the time to pile on all these extra costs - both in financial terms and in management time and resource - when many businesses are fighting for their life?
There is a larger danger. What is critical is that investment should continue even during the lean times. If the government forces businesses to comply with new regulations which may cost thousands of pounds to implement, it will take money out of the industry; investment will then freeze up. The phased withdrawal of the Hotel Buildings Allowance and the reduction in capital allowances, for example, are damaging enough but these measures are coming into effect now - at the worst possible time. If we want investment to continue, the government should at least delay them for a couple of years, which would be both psychologically and financially encouraging. Will government do this? Ministers speak of supporting industry during these treacherous times but then introduce costly regulations and damaging fiscal policies which imperil the very industries they claim to support. An understanding government? I think not.
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