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The Government’s consultation on copyright, addressed the regulatory impact and costs to business of the proposals to impose statutory codes on collective licensing societies, and to introduce new exceptions.

The initial assessments will be reviewed in the light of evidence collected during the consultation process. SBID participated in this process and is pro-active in the Government’s continuing research programme. The consultation published in December 2011 was accompanied by a set of initial impact assessments; the public outcome to date is available from the Intellectual Property Office website.

Great British companies such as British Airways, Shell, Unilever, the Co-op, Tesco, and Balfour Beatty have been investigated over several years for alleged price fixing, fined nearly a quarter of a billion pounds by the OFT, only for each case to collapse because there was no basis in fact, law or economics to support them. The net result is a huge bill for the taxpayer to pay the legal fees. There are 600 employees at the OFT costing us £60 million per annum, let alone compensation to the companies that have been improperly charged so a review is very much needed.

Last year, the Government consulted on proposals to reform the competition regime including merging the Office of Fair Trading and the Competition Commission to create a single Competition and Markets Authority. Among other things, the consultation sought views on proposals to improve the enforcement of the anti-trust prohibitions. The Government will announce their conclusions following the consultation shortly.

One reason why the review looked at merging the Office of Fair Trading and the Competition Commission is to make sure that they are right and fit for purpose for our times and that there are the right resources needed for the world that we live in today. There is no doubt about it that the Office of Fair Trading has had a wonderful reputation in the past, and we would like to think that the new merger, if it goes forward, will take forward the very best of the OFT and the very best of the Competition Commission.

The Government’s aims is to build on the best of the OFT and the best of the Competition Commission in the creation of a world-leading Competition and Markets Authority. The Government recognise that the system for the enforcement of the anti-trust prohibitions is not working as well as it should. Cases take too long and a strong challenge to decisions is often mounted on appeal. It is worth remembering that Britain has a reputation in the world as being one of the best places in which markets work. They are open and fair. We have to make sure that we have timely and effective enforcement. That is what the consultation has been about.

The government Ministry for Fair Trade agrees that whatever reorganisation of the competition authorities is to take place in the future, adequate resources must be made available to ensure that there is effective combating of price-fixing cartels and other anti-competitive practices. The record shows that, on the matter of liability as distinct from the precise amount of penalty, the OFT has been upset on appeal to the Competition Appeal Tribunal only relatively rarely. It has admittedly been told by the Competition Appeal Tribunal that the amount of penalty is sometimes too large and has been reduced. Last year, and I think the year before, the OFT brought in some £60 million to the Exchequer from fines. Fines that had been upheld by the Competition Appeal Tribunal! SBID has been actively involved in the programme to review and reform faults in the current system of interior design and propose methods for improvement over the past three years. The SBID report has been submitted.

The Office of Fair Trading is of course an independent body and is best placed to balance the work that it does; it is not the Government’s place to tell it what to do. However, it is almost impossible for the ordinary consumer trying to deal with the combination of the OFT, Consumer Focus, Consumer Direct, the CBA and the Competition Commission to know where to go when there is an issue and this requires further clarity.

With the restructuring coming, the department must decide where change will take place. It will shortly put some real clarity on its website to direct people under the current structure and with some clear indication where restructuring is going to take us.

The Government will reveal their conclusion in the next few weeks after the finalisation of the consultation…… watch here!

Interior Designers have regularly been regarded as untrained in business acumen, often quite justifiably but often it is due to third party suppliers taking designers deposits and then going bankrupt, leaving the designer without the product and having spent the client’s money.

Edward Davey, the Minister for Employment Relations, has launched a consultation about bankruptcy and company winding up. The consultation document sets out detailed proposals to reform the application process for bankruptcy and compulsory winding up by replacing the current court route with a new administrative process.

Uncontested applications would be determined by an adjudicator and the court would be involved only at the application stage to the extent that there is a dispute that can be resolved only by judicial intervention. The minister proposes to allow electronic applications to be made to an adjudicator, who will be a person appointed for that purpose by the Secretary of State and whose office would be within the Insolvency Service.

Debtors who want to apply for bankruptcy for themselves would have the choice of submitting electronic or paper applications, and the option of making the requisite payment to enter the process by instalments. Where creditors are looking to instigate proceedings, a new mandatory pre-action process would incentivise debtors and creditors to communicate with each other and thereby reach a mutually satisfactory solution to the debt problem without recourse to a bankruptcy or winding up application.

This reflects the government desire that people are empowered to make the right decisions for themselves about their finances, as set out in the government response to the call for evidence about personal insolvency.

Litigation can be costly and time consuming. This new process should therefore deliver a more efficient service as well as saving valuable public and private resources. In order to ensure that the interests of both debtors and creditors are protected, the court would still have an important role and the route through the courts will of course remain as an independant solution of resolve. Not only would it decide the outcome of disputes, but certain petitions for the winding up of companies, such as those based on public interest grounds, would continue to be determined by the courts.

We intend actively to engage with interested parties throughout the consultation period, and welcome views on whether the proposals will deliver a workable and efficient application process for bankruptcy and most compulsory windings up.

An initiative supported by several trade associations to kick-start the economy again by cutting the VAT rate for construction and second-fix fittings was presented to the Government at the start of 2009. One of the key industry supporters was the Bathroom Manufacturers Association.

The focus on business development has shifted towards promoting enterprise, so if the Government is going to reach its self-set carbon omission targets it has to promote initiatives and provide incentives in an environment of financial crisis. 

Simple cost-effective improvements can be made to promote the glut of housing stock. Statistics show that some seven million homes throughout the UK fall well below the decent homes standard in terms of bathrooms and kitchens. If the VAT rate were temporarily cut from 15% to 5% as is suggested by industry campaigners, numerous industry wheels would start rolling again such as construction, plumbing, building, tiling, sanitary-ware, tiles, lighting and of course interior design. 

As Aileen Campbell, MSP, from the Scottish National Party (SNP) highlighted, cutting VAT to five percent for all repair and maintenance work was official Scottish Government policy but because taxation is decided in Westminster, the Scottish Government was unable to implement such a cut.

With the VAT rate returning to its original 17.5% and SME now facing the cost of adjusting all their stationary and software again, we ask, was it worth it? Did it make a difference, and if it did was the effort put into the reduction a boost to the correct sector of industry? 

The year ahead is going to be hard, and we reach the end of 2009 with fewer companies prospering than in previous years so the question we must ask ourselves is, how will we look as an industry this time next year? 

The Society of British Interior Design exists to define interior design as a serious profession. Interior designers understand how to do their job but notoriously are terrible businessmen/women. Add that to a haziness surrounding the definition of a professional designer and you can understand why nobody including those within the profession, have increased market share. 

The Society clarifies and defines the issue by stating that a designer must have a degree in interior design and two years work experience to describe themselves as a professional designer. This clear definition has separated the immediate difference from those design schools who churn out diplomas and certificates to hundreds of self declared professionals. 

The Society has in this clear step brought the UK for the first time in line with the rest of Europe and is the UK body of the European Council of Interior Architects (ECIA) the professional body for measured standards across European. 

CASE STUDY – European Countries with 5% VAT rate.

France

43,000 new jobs were created in the construction industry 5.6% growth in turnover in the industry.

Italy

75,000 new jobs were created in the construction industry 35,000 companies emerged from the informal economy to start paying VAT for the first time.

Portugal

Construction companies enjoyed a 20-25% growth.

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