BMF policy updates

The Brexit clock is ticking


by John Newcomb, BMF CEO
16 October 2017


John NewcombMore than a year since the country voted to leave the EU, the reality of how our business lives will be affected remains unclear.   At BMF Members’ Day in September, against the background of a ticking countdown clock, our focus was firmly on Building Beyond Brexit as our speakers, including Alok Sharma, the Housing & Planning Minister, gave us their insights into possible outcomes, the challenges that may arise and the opportunities they may bring.  

There is still clearly a lot of uncertainty but one thing is sure, and that’s the BMF’s intention to play a lead role in any changes to legislation, building regulations or customs and tariffs that may affect our Members.  Over the last 15 months our Policy and Public affairs work has risen up the Agenda.  We are regularly engaging with Government departments and ministers -  this is the first time, for example, that we have had a housing minister speak at Member’s Day.  

Since the General Election in June, and in preparation for the Autumn political party conference season, we have updated our Policy outlook document, which outlines our key asks from Government. For the second year running the BMF, this year in partnership with the NFRC, was a major sponsor of the Skills Summit held at the Lib Dem Conference in Bournemouth.  We also attended the Labour Party Conference in Brighton the Conservative Party Conference in Manchester.  

We are fortunate that the BMF membership is at its highest for over 20 years.  The fact that we are the fourth largest construction trade body representing over 80% of the merchant sector means that our voice is not only being heard, our views are now actively sought.  

Core Values  

Whatever the challenges of Brexit, the BMF is committed to building a business that will continue to be relevant to members and in great shape to serve and support our industry.  

With four new non-executive directors appointed this year, we are in the process of building a new Board to lead the Federation through the changes facing our industry.  Their first task is to formally review our strategy and produce a new strategic roadmap for the next five years.  The roadmap will be delivered next summer but we have already started on the journey by signing off the three Core Values that will underpin the BMF’s vision for the future.   Our Core Values confirm that we are: 

Passionate about adding value to our Members’ businesses
Member focused and Member engaged
Personal, approachable and trustworthy  

Working together  

We understand the value of working together and the strength that this gives us.  Over the past year we have created 15 Regional Centres of Excellence throughout the UK.  This has been made possible by merchant and supplier members making their premises available for our use for regional meetings, training, and local press and public affairs events.  We are also indebted to our 11 Regional Chairs, busy merchants who give up their very valuable time to head each the BMF’s Regions, as well as the Sector Chairs who run each of our product category and job specific forums.  Without their support, these meetings simply couldn’t happen.  

The trend towards localisation will gain prominence in our future Policy and Public affairs strategy, as the UK moves towards more devolved powers, with the appointment of Policy and Public affairs consultants in Scotland and Northern Ireland during the next 12 months.  This follows the successful appointment of our Welsh public affairs consultant last summer.  

Over the next five years we are aiming for further growth and greater influence.  By 2020, we aim to have a 90% share of the Merchant sector with 500 Merchants and 250 Suppliers in membership, making us at the very least the third largest Trade Association in the construction industry.  But even more importantly, we want to be regarded by our members, our peers, and by those we seek to influence as one of the best and most professionally run Trade organisations in the UK.



This article appeared in the October 2017 edition of Builders' Merchants News

The Brexit clock is ticking
The Brexit clock is ticking by John Newcomb, BMF CEO. More than a year since the country voted to leave the EU, the reality of how our business lives will be affected remains unclear. At BMF Members’ Day in September, against the background of a

The challenge continues    


John Newcombby John Newcomb, BMF Chief Executive
18 August 2017


Coming just days after the General Election, the theme of our recent Conference, Change Challenge and Opportunity, could hardly have been more appropriate. The feedback from delegates confirmed that the speakers’ thought-provoking presentations continued to resonate as the attendees returned to business back home.  

In times of rapid change, It is more important than ever for the industry to have opportunities like this to come together  to consider not only the issues affecting them today but also those about to come over the horizon.  It will be interesting to see what the talking points are next summer when the industry meets on the stunning shores of Lake Maggiore for the NMBS All Industry Conference 2018.  

Staying on track  

Over the last five years the BMF has developed and implemented a strategy that has seen positive benefits for every sector of the building materials supply industry.  The result has been a surge in membership amongst general and specialist merchants and their suppliers of every size and in every part of the country.  In July, we welcomed our 600th member, swelling our numbers to their highest since 1995.  

This is a significant milestone. As the fourth largest construction trade organisation in the UK our views are increasingly sought by policy makers at every level of government. Our voice is also receiving greater exposure in both mainstream and digital media, helping to build wider understanding of the merchant industry  

As our membership grows we need to ensure that the BMF continues to meet their needs.  The BMF Board is tasked with challenging the status quo and making sure that our strategy is fit for purpose.  BMF board members serve a maximum term of six years and three new directors attended their first board meeting in July, which, coincidentally, met for the first time in Northern Ireland.  As we move forward holding board meetings in our new BMF Regional Centres of Excellence around the UK will help us to keep in touch with the wider BMF membership.  

Our three new directors, Andrew Harrison of Travis Perkins plc, Shanker Patel of Lords Group and Ian Haldane of the Haldane Shiells Group, bring a wide range of experience to the board and their varied backgrounds are in keeping with the BMF’s broad membership. Ian and Shanker have both overseen major growth within family-owned businesses operating in distinct areas.  Andrew has served in senior roles in both a large regional operation and in the UK’s largest merchant business. In his latest role, as Deputy CEO of TP's Plumbing and Heating Division, he will also add to the BMF’s understanding of a fast-growing cohort within our membership.  

Celebrating success  

This year, for the first time, we partnered with the FMB’s Master Builder of the Year Awards, to identify some of the best merchants in the country.  The Master Builder of the Year Awards celebrate the work of small and medium sized builders who have demonstrated excellence both in their standard of work and their customer service.  Similarly, the BMF Builders Merchant Award turns the spotlight on local merchants who have focused on customer service to drive new business growth.   We were delighted with the response and the quality of the entries and along with the FMB, we had a hard task selecting the six regional winners, listed below:  

Midlands                            E H Smith
North                                  Milford Building Supplies
Northern Ireland              Haldane Fisher
South                                  Parker Building Supplies
Scotland                             Beatsons Building Supplies
Wales                                  LBS Builders Merchants  

We wish them all luck as they go forward to the national final.  The overall winner will be announced at an Award Ceremony on 15 September and the BMF will be there, along with the six finalists, to celebrate their success.  

This article appeared in the July/August 2017 edition of Builders' Merchants News
John Newcomb
The challenge continues
The challenge continues. Read John Newcomb's latest column which appeared in BMN July/August 2017. Coming just days after the General Election, the theme of our recent Conference, Change Challenge and Opportunity, could hardly have been more appropr

Market resilience


John Newcombby John Newcomb, BMF Chief Executive
20 September 2017


Over the summer we have seen conflicting speculation in both the national and trade press on the general state of the economy and how the construction industry is faring.

For example, the BMF’s Builders Merchants Building Index (BMBI) recorded growth throughout the first half of the year, which on first viewing seems at odds with data issued by the Office of National Statistics (ONS) for Q2.

Whereas the initial ONS Q2 results reported that construction output rose by just 0.4% on the same period last year and fell by 1.3% compared with Q1 2017, the BMBI found that builders merchants saw Q2 sales increase by 5.3% (when adjusted for there being two less trading days in the period) compared to 2016, with year-to-date sales figures 3.8% higher than the same period last year.

Initial ONS data is often revised – which may have happened by the time you read this.  On the other hand, it may not be too much at odds with the BMBI and other indicators. Most of the other major trade association Q2 reports – including CPA, FMB and NFB – found that order books are being sustained by private housing and RMI work – the mainstay of many a merchant’s business – while commercial sectors are falling behind. Even the relatively gloomy ONS statistics reported a record 5.1% increase in private housing in June over May.

Having spent much of August on the road visiting 20 or so BMF members in the SW and NE of England and in Scotland, I think the merchant sector can best be described as resilient.  I found striking similarities across all the merchants I spoke to.  Every one of them reported sales growth through the first half of the year – even those in parts of the country affected by adverse weather conditions in the early summer months. 

However, whilst these regional merchants have seen little evidence of a slow down in overall sales they are reporting more price increases, an inevitable result of the falling exchange rate, and shortages in certain product areas. 

Future forecasts

Attempting to forecast the future is notoriously unreliable, but it would be foolish not to consider the possibility of tougher trading conditions as we move into 2018. Indeed, BMF Members’ Day this month is dedicated to exploring possible scenarios for the building industry in a post Brexit economy. We have lined up a wide range of speakers to give their views including a member of the Bank of England’s Monetary Policy Committee, the CBI’s Brexit expert and the FMB’s Vice President. 

We are also delighted to welcome the Minister of State for Housing and Planning, Alok Sharma.  Mr Sharma is responsible for the government’s housing and home ownership policy as well as the planning policy which underpins it.  Other important parts of his portfolio include estates regeneration and regulation of the private rented sector.  With so much merchant business driven by housing, this session is not to be missed.

 

Next generation

The turn of the academic year is traditionally the time to take on apprentices. In May, the BMF formed an accredited Apprenticeship Training Agency (ATA).  As an ATA, the BMF acts as the formal employer of the apprentices, who are placed with member companies. By acting as the employer, the BMF ATA removes potential administrative hurdles making it easy for BMF members to take on an apprentice in any job role.

This is a hugely exciting initiative. We are currently in dialogue with over 40 member companies who are looking to develop their next generation of employees. This first tranche of enquiries alone could lead to 200 new apprentices joining the industry. 

Twenty one apprenticeships have already been confirmed, including the BMF’s own Level 2 Customer Service Practitioner.  We wish every one of them well in their future careers.



This article appeared in the September 2017 edition of Builders' Merchants News
Market resilience
Market resilience. Read John Newcomb, BMF Chief Executive's latest blog which appeared in BMN September. Over the summer we have seen conflicting speculation in both the national and trade press on the general state of the economy and how the co

The European clock is ticking  

by Brett Amphlett, BMF Policy and Public Affairs’ Manager
8 September 2017

Brett AmphlettAs MPs returned to Westminster this week, it's a good time to outline the situation about leaving the European Union. Brett Amphlett, BMF Policy and Public Affairs’ Manager, highlights the positions being taken below and explains what the BMF has been doing since the Prime Minister triggered the EU Article 50 clause. 

The main players

The formal negotiations began on 19 June. The UK team is led by David Davis MP, Secretary of State for Exiting the European Union, who was Minister for Europe in John Major’s Government. Mr Davis also chaired the Public Accounts Committee when Tony Blair was the Prime Minister.  

The EU Chief Negotiator, Michel Barnier, was the European Commissioner responsible for financial services and the internal market before taking up his current role. In France, Mr Barnier was elected to the National Assembly and served as a government minister including as French Foreign Minister. The European Parliament has a say in ratifying whatever proposals are hammered out. Its Chief Negotiator is Guy Verhofstadt MEP who is a former Belgian Prime Minister.  

Negotiations  

The Conservative Government set out its proposals and the direction it wants to take in the Brexit White Paper published on 2 February. Following the General Election, the minority Conservative Government gave more details about legislative changes it wants to make; negotiating ‘red lines’; and future legal, tax and funding arrangements. Most of the proposals are well-known: (a) taking back control of our laws; (b) controlling immigration; (c) maintaining employment rights and consumer and environmental protection; and (d) trade agreements with Europe and other markets.  

The European Commission in Brussels has set out the collective views of the other 27 EU Member States. In essence, the negotiating positions can be boiled down, as follows:  

UK
  • leaving the Single Market and the Customs Union entirely
  • taking Britain out of the jurisdiction of the European Court of Justice in Luxembourg·
  • no longer paying billions of pounds in EU financial contributions
  • bringing down net migration to tens of thousands
  • protecting the rights of British people who currently live and work in Europe (and vice-versa)
  • “no deal is better than a bad deal”.  

EU
  • Britain cannot stay in either Single Market or Customs Union without sticking to ‘four freedoms’ laid down in EU treaties - namely freedom of movement of goods, people, services and capital
  • UK must pay a financial ‘divorce’ settlement - a figure of €75 billion is often mentioned
  • negotiations must be done in sequence, not in parallel - talks on Britain’s departure and a financial settlement to be concluded first before the EU will talk about a future trade deal
  • deciding on method of resolving EU-UK disputes post-Brexit - i.e. European Court of Justice
  • prioritising the unique position between Northern Ireland and the Republic to avoid a ‘hard border’ and the reintroduction of border controls and customs’ checkpoints
  • protecting the rights of Europeans who currently live and work in UK (and vice-versa).  

Legislation  

In July, ministers published the EU Withdrawal Bill - often called “Great Repeal Bill” - as draft legislation for Parliament to scrutinise now that MPs are back. The aim is to pass a new Act of Parliament to incorporate existing EU Regulations and Directives into UK law so they apply after Brexit. Ministers also propose to give themselves the power to change secondary legislation.  

In the Queen’s Speech (21 June), 8 new pieces of draft legislation were announced. The most relevant to BMF members are a Trade Bill, a Customs Bill and an Immigration Bill:  

  • Trade Bill aims to boost the UK as a global trading nation; protect UK firms from unfair trading practices; and allow an independent trade policy to operate the day after Brexit
  • Customs Bill aims to introduce a customs’ regime to replace the EU Customs Union we currently belong to; allow for future deals with the EU and other world markets; and impose new British indirect taxes (current VAT will no longer apply because it is an EU tax)
  • Immigration Bill aims to abolish EU law on free movement and bring migration policy for EU people back under UK law to control the number of people coming here from Europe.



This article appeared in the Autumn 2017 edition of the BMF's One Voice magazine
The European clock is ticking
As MPs returned to Westminster this week, it's a good time to outline the situation about leaving the European Union. Brett Amphlett, BMF Policy and Public Affairs’ Manager, highlights the positions being taken below and explains what the BMF has bee

The National Minimum Wage Act 1998 and National Living Wage 2016  


In the April 2016 edition of “Business News”, the BMF told its members:      


National Living Wage comes into force   The new mandatory National Living Wage has come into force, requiring employers to pay workers aged 25 and over at least £7.20 an hour. It is expected to give 1.3 million workers an immediate pay rise.          

In the Summer 2016 edition of “One Voice” the BMF published a 1½ page article on the NMW and NLW:  



Rewarding your staff: The National Living Wage  

The arrival of the new National Living Wage has been widely trailed in newspaper, television and radio adverts. But in the weeks since it became law, hidden consequences have begun to emerge.  

Several high-street businesses have been pilloried by press and politicians when changes they made to staff terms and conditions became public. It began when a whistleblower at B&Q leaked a letter to “The Times”. In it, management is alleged to have threatened to dismiss staff unless they sign a new, less-generous contract. Brett Amphlett, BMF Policy & Public Affairs Manager, discusses the main issues for merchants:  

In his July 2015 Budget, the Chancellor of the Exchequer announced he would legislate to impose a new National Living Wage, over and above the National Minimum Wage. As the name suggests, it is all about living standards and aims to boost the pay of entry-level workers. It is part of complex, but concerted, moves by the Conservatives to reconfigure the system of welfare and benefits payments and business taxation and tax credits.  

Rates and eligibility  

The key determinant is the age of your staff: If they are under 25, you must pay the National Minimum Wage.  If they are aged 25 and over, you must pay the National Living Wage.  

National Minimum Wage (NMW)  

There are four hourly rates in law and they are increased annually on 1 October for all staff. Today, BMF members ought to be paying:  

  • 16 to 17-year old rate = £3.87
  • Youth Development Rate for those aged 18-20 = £5.30
  • Adult Rate for those aged 21-24 = £6.70
  • Apprentice Rate = £3.30  

The Apprentice Rate applies to:  

  • all apprentices in their first year and
  • 16 to 18-year olds in any year of the apprenticeship.  

Otherwise, apprentices are entitled to the rate that relates to their age. If you provide staff accommodation, it can be taken into account at a daily rate of £5.35. These hourly rates will rise again on 1 October in line with above-inflation increases announced in the March 2016 Budget.  

National Living Wage (NLW)  

The Government has introduced a new hourly rate for all full and part-time staff aged 25 and over. The National Living Wage with effect from 1 April 2016, at a starting rate of £7.20. It is, in effect, a 50p premium on the NMW Adult Rate and is now the top rate of the five statutory rates. Over time, ministers will ratchet the NLW up every April so that it reaches over £9 by 2020 - in other words, a legally-enforceable 6% year-on-year pay increase.  

Annual uprating is due to be aligned in April 2017 because at present, NMW increases occur in October, whereas NLW occur in April. This is sensible, but it means that until next April, there are different dates for increases, depending on staff age.  

Enforcement  

The Conservatives are determined to see through these changes that were in the General Election Manifesto. The HMRC will enforce rates more vigorously than before, with harsher penalties. Employers found guilty:  

  • will have to pay arrears owed, plus a penalty, up to a maximum penalty of £20,000 per worker
  • are likely to be disqualified from being a company director for 15 years
  • will automatically be ‘named and shamed’ by the Government.  

HMRC’s enforcement budget is being doubled and a new team established to bring criminal prosecutions against firms that do not pay the correct rate. Given other policies like protecting the term ‘apprenticeship’ from misuse by dodgy training providers and the Apprenticeships Levy, the HMRC is bound to focus on enforcing rates and rules for apprentices. NB: after apprentices aged 24+ finish their first year, they become entitled to the National Living Wage (£7.20), not the Apprentice Rate (£3.30).  

The Minimum Wage was flagship Labour Party policy at the 1997 General Election and became law in April 1999. The Conservatives have now gone further and ministers have begun a complex set of policy, tax and regulatory changes (all at the same time) to boost productivity. Mr Osborne wants to correct an anomaly where taxpayers subsidise employers who pay low wages.  

To offset the impact, the Chancellor is exempting small firms from National Insurance Contributions and cutting Corporation Tax to 17% by April 2020. Mr Osborne argues that higher wages lead to greater spending that would ultimately lead to the creation of more jobs in the wider economy. But others are not so sure. The Office for Budget Responsibility warns of the hidden cost of ‘wage spill-over’. This is where employers have to boost other staff wages to maintain pay bands - especially if they have no choice, for example, if set out in employment contracts.  

A furore caused by businesses that withdrew benefits like Sunday and Bank Holiday pay, overtime, and time off in lieu for unsociable hours has erupted at Westminster. A 130,000-strong petition calling for B&Q to ditch its changes led to a House of Commons’ debate. MPs revealed tactics used by firms to lessen the impact by clawing back allowances or premiums.  

The Government is taking a firm line and is putting pressure on companies. On ITV, the Chancellor warned that by cutting perks, firms are not acting in the spirit of the law and they should abide by their responsibilities. Replying to the debate, Business Minister Nick Boles urged MPs to tell him of firms not upholding the spirit of the law, so ministers can embarrass employers and apply pressure so they live up to their legal obligations.  

To conclude, the BMF has no problem with the National Living Wage. The last BMF Remuneration Survey showed that average wages for merchants’ staff are £16,000- 20,000 pa. For managers, salaries go up to £30,000 or beyond. BMF members tend to offer better terms and conditions than DIY retailers. When the B&Q leak broke, the BMF wrote to “The Times” to give a more balanced view of our supply chain. We emphasised that BMF merchants have a much bigger share of the market than B&Q – approximately 4,500 outlets compared to their 750 stores.  

No-one fully knows what the impact will be in relation to pay, productivity and employment. The Government admits it is likely to mean job losses. The National Living Wage will raise the pay of entry-level workers to (as yet) untested levels. One aspect is certain: if you already pay over the legal minimum, the NLW will catch up with you. Higher pay you offer today will be eroded over time and no longer act as a premium to retain or recruit staff. For more information, please go to www.gov.uk/national-minimum-wage or www.livingwage.gov.uk.                     


The official HM Government webpage that gives statutory guidance to employers is at: https://www.gov.uk/national-minimum-wage  
The National Living Wage
The National Minimum Wage Act 1998 and National Living Wage 2016

The Bribery Act 2010


The Bribery Act 2010In the April 2011 edition of “Business News”, the BMF told members:  


Bribery Act 2010

The Bribery Act comes into force on 1 July 2011. A Briefing '10 Things Every Employer Should Know About the Bribery Act 2010' was prepared by the BMF's Employment Adviser and is available from brett.amphlett@bmf.org.uk.


Click here for the official HM Government webpage that gives statutory guidance to employers.
The Bribery Act 2010
The Bribery Act 2010 | Guidance to help commercial organisations prevent bribery

Does the Modern Slavery Act 2015 affect your building materials business?

Modern Slavery Act 2015In the February 2016 edition of “Business News”, the BMF told members:


Modern Slavery Act 2015 – does it affect your business?

BMF’s employment lawyers Halborns outline the new requirements of the Modern Slavery Act 2015

What do I need to know about the Modern Slavery Act 2015? (MSA)
If you turnover £36M or more you must publish an annual statement of the steps your business is taking to ensure human trafficking and slavery is not present in your business or supply chains. As you’d expect, detailed definitions of the offences of slavery and human trafficking are set out in the MSA but essentially amount to forcing people to work or travel against their will.

How do I comply with the requirements?
There is no law on the exact wording that the statement should take. It should include:
1. Details about your supply chains;
2. What steps you have taken to check whether slavery and human trafficking has tainted your business or supply chains;
3. Which areas of your business or supply chains might be at risk of slavery or human trafficking (if any), and any steps you have taken to assess and manage those risks (and whether they have been effective);
4. Any training you have provided to your team to ensure that slavery and human trafficking is identified and dealt with.

When do I have to publish a statement by?
Any business with a financial year end on or after 31 March 2016 must publish the statement within six months of the end that financial year, and then annually from then onwards.

What happens if I don’t comply?
You can be forced to comply by the Secretary of State through court proceedings.

The BMF advises those members who were interested in advice on the Modern Slavery Act contact either Halborns direct on 0115 718 0333 or via the legal helpline on 0870 420 7373. Halborns will talk you through the process and explain the requirements of the Act.

Halborns will issue you with a document that explained this and would enable you to draft your own statement based on a structure set out in the document. Halborns will need to charge a nominal fee for doing so of £100 + VAT a time. This would both be to cover costs in giving the telephone advice and to reflect the fact that the member would be relying on Halborns professional indemnity insurance   


In the November 2016 edition of “Timber Forum News”, the BMF told members: 

BMF & TTF launch guides to the Modern Slavery Act 
The Builders Merchant Federation and the Timber Trade Federation have produced member guides to the Modern Slavery Act. 

The Modern Slavery Act 2015 came into effect last year and aims to improve law enforcement and transparency on slavery and human trafficking. It is a major concern for goods with long, international supply chains. 

The Act requires commercial organisations - which have a turnover equal to or larger than £36M - to describe the steps they have taken to ensure that slavery and labour exploitation are not taking place in any part of their supply chain or in any part of their own business. This must be published in an annual statement.

It is important to note that timber certification schemes and the TTF’s due diligence framework (RPP) already include provisions to address Modern Slavery through the adherence to international labour laws and declarations. 

The BMF’s employment lawyers Halborns can assist you with drafting your statement and ensuring you comply with the legislation. Contact Halborns for further guidance at info@halborns.com.  For any queries you can also contact Owen Walton - TF Communications and Research Executive - at owalton@ttf.co.uk   

Click here for the official HM Government statutory guidance to employers.
Modern Slavery Act 2015
Does the Modern Slavery Act 2015 affect your building materials business?
An Act to make provision about slavery, servitude and forced or compulsory labour and about human trafficking, including provision for the protection of victims; to make provision for an Independent Anti-slavery Commissioner