Fines, lawsuits, loss of revenue: ignore smoking ban side-effects at your peril
By Karen Attwood
Published: 06 April 2007
Non-smokers in Wales breathed a collective sigh of relief at the beginning of April when the country went smoke-free. England is to follow suit in July and as only a quarter of the population smokes, the majority of the country is looking forward to the ban. However, according to a new study around 42 per cent of businesses are ill-prepared for the effects of the ban and are unaware of the financial repercussions of breaking the law. The insurer Royal & SunAlliance has estimated around 800,000 businesses are unaware of their obligations and face hefty fines this year if they fail to comply.
The ban prohibits smoking inside offices, pubs, restaurants, indeed virtually every enclosed space and workplace and it is the responsibility of business owners to ensure it is enforced. For example, if a pub landlord failed to prevent his customers from lighting up he would be liable to fines of up to £2,500. And if businesses do not display No Smoking signs, they face on-the-spot fines of £200. This increases to £1,000 if the issue goes to court.
Furthermore, under the terms of the legislation, if employers do not take reasonable measures to ensure that their premises are smoke-free, they could be liable for future claims if an employee was later struck down with an illness that can be traced back to working in a smoke-filled room.
The study found that small businesses are the most vulnerable to the ban, with almost half unaware of the financial implications. Regionally, the East of England showed lowest awareness of potential consequences while businesses in the Midlands were better prepared. Some businesses were unaware that smoking rooms were no longer permitted.
The findings "should serve as a startling reminder to employers and commercial property owners", Phil Bell, of Royal & SunAlliance, said.
"Not only must they act now or face stiff financial penalties, but perhaps more worryingly, turning a blind eye could leave them facing significant claims in the future for employees' ill- health," he said. "The onus is now firmly on employers to ensure their premises are smoke-free. Companies have had plenty of notice about the ban coming into effect and should have no complaints if they are penalised for failing to comply."
The Federation of Small Businesses said it had been working for months to ensure that companies were well informed and to prevent them from being caught out. "You would have to have been living on the moon to not know the smoking ban was coming in," he said. However, some businesses may not have been aware of the amount they could be fined, he said. There is financial help available for small businesses who have been able to apply for free No Smoking signs to put up in the workplace.
One industry expected to take a hit to profits in the wake of the ban is the hospitality sector. Beer and fags go hand in hand for many and a lot of heavy smokers are also heavy drinkers. Experts are predicting die-hard smokers will stay at home and sup on cheaper ale from supermarkets instead of heading to the pub. The UK's biggest brewer, Scottish & Newcastle, has warned that the ban will wipe £10m off its profits as the UK pub market declines by as much as 5 per cent this year.
However, pubs have been investing heavily and although there are fears for snug inner city venues that have no access to outdoor areas, many pub groups are seeing the change in the law as an opportunity.
Simon Emeny, managing director of the inns division at Fuller, Smith & Turner, said there would be "winners and losers from the smoking ban". "It will be the biggest change the industry has seen," he said. Fuller's, which brews London Pride, has invested £3m-£4m in improving outdoor spaces and creating patios for smokers but expects the value of the pubs to increase by the same amount.
Other companies have been offloading inner-city pubs and improving their food offering ahead of the ban. Although there is expected to be an initial dip in turnover, similar to that experienced in Scotland where the ban was introduced last summer, the industry does not appear overly concerned for its long-term prospects. People who may have avoided the pub due to the stuffy atmosphere are now likely to return, with more families expected to eat at family-friendly venues.
More likely to suffer long-term damage is the bingo industry, which employs 21,000 people in 700 licensed premises across the country. The Bingo Association is predicting that 200 will be forced to close in the wake of the ban. Fifty per cent of bingo players smoke, twice the national average and bingo halls make the majority of their money in the breaks between games, when punters gamble on slot machines. Come July, they will all be nipping outside for a fag if they don't stay away all together. Steven Baldwin, of the Bingo Association, said that although the industry supported the ban, it came at a time when it was already suffering from recent changes to gambling legislation. This has led to licence fees being increased while the number of jackpot machines that bingo halls are allowed to operate has decreased. The leisure company Rank, which is selling off a number of bingo halls, said the smoking ban in Scotland had cut sales at its bingo clubs by 15 per cent.
Certainly if the ban encourages some smokers to stub out their cigarettes for good, it should lead to a healthier workforce. Around a fifth of businesses surveyed said they expect to see enhanced levels of productivity as staff will have fewer breaks and therefore will work more effectively. However, around a quarter of businesses were not so optimistic. They believe the ban will lead to increased stress levels among those employees needing a fix and unable to get one when they want to.
Gordon Timeline, business psychologist at the stress consultancy Robertson Cooper, said: "Although the long-term health benefits of restricted smoking are clear, many smokers will feel a loss of both control and of a short-term sedative. This can lead to an initial increase in stress levels and can impact productivity at work."
To address this, employers need to recognise the additional stress this ban may place on some of their workers and address this head on, he added. "For example, speaking to smokers in advance about the impact of the ban, and discussing how they can increase social interaction in place of the traditional 'smokers circle'," he said. "Ultimately, businesses need to emphasise positive well-being messages and be open to ways to engage their smokers."
English businesses now have three months to catch up with the rest of the country. The message is simple, be prepared if you don't want to get burnt.
