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A self-critical approach

21st October 1966
Page 33
Page 33, 21st October 1966 — A self-critical approach
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Which of the following most accurately describes the problem?

By JOHN DARKER AMBIM THE autumn conference of the National Association of Furniture Warehousemen and Removers last week was notable for a number of constructive and discerning speeches. Mr. George Skelton, this year's president, said the NAFWR was a democratic body which by its nature was slow to adapt to change but the study group set up to examine the industry's problems would not be afraid to look critically at things which had become enshrined as sacred cows.

Mr. A. R. M. Walker, chairman of the study group and immediate past president of the Association, said the group had agreed upon its method of procedure and had listed a number of questions requiring a detailed answer. It was premature to expect any interim proposals, but he could provide an outline of the problems.

In defining anew the objects and scope of the Association they had to bear in mind • changes in their industry in recent years. Many experts would have to be consulted, and the study group proposed to seek the views of overseas members whose vantage point could be beneficial to the group's deliberations. "Edwin Harris, your late general secretary, is now prepared to spill the beans—he was always very polite when he was your servant".

Togetherness?

Mr. Walker pointed out that the Association was originally formed for small men. The membership now included large firms and the trend towards amalgamation could not be ignored. Consumer groups, today, made free bargaining between the entrepreneur and his customer impossible. The removals trade was not a simple one— specialized services such as office removals fell naturally within their ambit. They had to look at the functioning of the area organization to see what improvements could be effected there.

It was also desirable to await the anticipated changes in the law of contract, and revised company law, said Mr. Walker. Their conditions of contract would be affected by contract law changes, and the effect of insurance provisions was another matter that needed careful consideration. It was -possible, he thought, that insurance could be included in standard contracts with customers.

"The RHA study group," said Mr. Walker, "took two-and-a-half years to complete its thorough enquiries. We are trying to devise a structure for the Association that will last not for two or three or seven years but for at least 25, remembering that the original constitution had been viable for 50 years." The study group would fail if it was afraid to tackle the industry's complex problems. Three papers dealing with the problems of the family business concluded the morning session. Mr. G. F. H. Wright spoke about tax problems, Mr. A. Edwards dealt with the problems of management succession, and Mr. G. Dodd's subject was the future.

Mr. Wright said that the 1965 Finance Act —a formidable document of 271 pages— revolutionized methods of charging tax and its general effect was to penalize the family business, defined in the Act as a "close company under the control of five or fewer participators or participators who are directors". Participators, said the speaker, could include lone creditors, though bankers were excluded.

Although Corporation Tax was charged at 40 per cent the total tax charged was probably less than under the old basis for income tax and profits tax, said Mr. Wright. "But don't be misled. In your next accounts you will come up against distributions and shortfalls and the effect of these could be more adverse".

He urged members to develop their vehicle maintenance facilities and to follow an expansionist policy. Those firms which habitually paid dividends of 30. to 35 per cent of profits should continue to do so and argue that this was commercially essential.

Firms selling old premises should note that capital gains tax need not be paid on the profits on the sale of old buildings if new premises were being built--the profits could be set off against the cost of the new buildings.

Mr. Wright said that some firms were considering sole trading as alternative to limited liability structure. He thought that many family businesses would be helped by a sole trading basis and in many cases the limited liability which was lost under sole trading could be made up by insurance provisions. Owners of family businesses too often failed to arrange for the succession on their death or retirement, and Mr. Wright said thai though gifts inter vivos were liable to capital gains tax, retiring owners concerned with income preservation might consider whole live policies backed by annuities.

Management succession Mr. Edwards said that heads of firms must do their utmost to develop the managerial potential of their staff, including their sons. He favoured sending sons to larger outside firms for a training period, on the clear understanding that they would one day return to the family business. The new training board would greatly help the industry, he believed, and he hoped some permanent scheme of management education would be set up, either under the Board's auspices or by the removals industry itself.

The speaker urged that realistic salaries comparable to those in outside industry should be paid to managers and traine Senior men approaching retirement nee( relaxation; they must learn to delegi remembering to delegate authority w responsibility. They should allow act managers a fair trial period to gain expl ence and in reviewing progress they shol not ignore the general state of business.

Mr. Edwards believed that many sir firms could profit from the services of cc sultants; in any event, "disturbances a storm centres in your business will keep y on your toes and produce an expansior outlook".

Success in the future would not entin depend upon business expertise, said Mr. Dodd, in a thoughtful appraisal of futt prospects. The industry would have ma more burdens and he anticipated many bar ruptcies, but when credit restrictions. eas he felt the enterprising firms would hold th own.

Mr. Dodd surmised that new legislati would issue from politicians of all colours; was alarmed by the implications of SE which could easily be adjusted with serio consequences to particular industries areas. And the proposed reduction of drive hours would disadvantage smaller firms.

While welcoming stricter legislation co cerning vehicle maintenance, Mr. Doc stressed the vulnerability of single vehic businesses if their vehicle was put off t road. Small firms must give maintenan prior attention, and he felt automatic chas! lubrication might help them.

Mr. Dodd ' urged members to innova ceaselessly in an endeavour to lessen ti burden of removals to their own staff and customers. Containers, he suggested, mig save manual effort and economize in labot.

Rebutting criticisms

A powerful rebuttal of a recent Pre criticism of the industry published in a vac newspaper was made by Mr. K. Berg in a lively speech on "The Association". NI Berger, said the writer John Baggaley Lu attacked the industry, the Association am the Institute. None of them was perfect b they all tried to do a good job. Of tl criticism, "the industry moans because cannot get staff that care", Mr. Berger sa that until a few days ago this applied 1 every industry. Honest and faithful servic had been rendered by the industry in movir about 4+ million people a year.

Generally, said the speaker, estimatc were adhered to and promises made to cu tomers were kept despite the need for hurrie improvisation on occasion. "Where else i


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