As Building predicted, the congestion charge is throttling London's small builders. We talked to two who are so fed up with it that they're thinking of quitting the capital – and a roofer delivers his message to Ken.
Building's Chop the Charge campaign is three weeks old, and has already gained backing from across the construction sector. Leading industry figures have contacted us with messages of support and ideas for reducing the burden on the industry, and London deputy mayor Nicky Gavron last week promised to meet lobbyists over a possible exemption. But what the industry really needs is hard evidence that the charge is a tax on development; that it is crippling projects and forcing builders out of the zone. That evidence has not arisen – until now.
Two builders in central London, Richard Currell and Karl Mudares, have revealed to Building how Livingstone's levy has affected their livelihoods – and could even force them to stop working in the capital. The main problem they are facing is that the charge has made it even more difficult to attract subcontractors. And the supposed benefit of the charge, that it would make parking easier, has not happened at all.
The congestion charge has led to contractors facing squeezed margins, and according to Currell and Mudares, could force smaller firms out of central London. The situation has got so bad that the mayor of London, Ken Livingstone, must grant the industry some relief from what has become a tax on the development that the capital so desperately needs.
Case study one: “It’s just a nightmare”
Karl Mudares is the director of Dan Crown Limited, a builder based in Knightsbridge. His firm provides a one-stop shop for clients, offering architectural services and on-site renovation. He has been in the industry since 1988 and employs six people. “I live in Bexley and commute every day. The charge isn’t doing anything. I get to central London at seven o’clock every morning and it’s still busy. There are traffic jams in Trafalgar Square as everyone is trying to avoid the fine.” Mudares is in his office overlooking Knightsbridge. As we talk, we can hear the traffic growling past outside the window. “It’s just a nightmare. It’s such a strain on you. I have to leave two to three hours early for every appointment because you can’t predict the traffic and then when you get there you can’t park.” His voice begins to rise and he starts to wave his mobile phone furiously. “Last month I got £600 in parking fines. I have to have one guy on site all day just checking the meters and finding spaces. The charge hasn’t helped at all.”
Like Richard Currell (see case study two), he is finding it harder to convince subbies to work in central London. “Tradesmen need their vans. They need things like their ladders, which they can’t carry on the train and you can’t leave equipment overnight because it gets stolen. Soon there will be a lack of good tradesmen here. I have to pay all their costs, including the charge.”
Mudares has had no choice but to pass these expenses on to his customers. “They don’t like it. I’m losing and the client is losing – so who is making the money at the end of the day?”
He would like to find work closer to his home, but thinks that there is not the same potential in the outskirts: “I’m considering stopping work in London – what with the charge and parking problems and whatever other charges they’ll introduce. I feel like I’m being robbed. There needs to be some sort of permit or concession.”
Case study two: “Sod it – why should I do this?”
Richard Currell has been in the building business for most of his life, working as a quantity surveyor and project manager before becoming managing director of Alex Green Interiors. He works from Fulham and covers most of the central London area, specialising refurbishment and renovation in upper end of the market. Currell is having a bad day. He is arguing with a traffic warden about his white van, which has been parked across the street from the flat he is refurbishing in central London. Admitting defeat, he drives off to find another parking space before returning to talk to Building. He arrives 15 minutes later, having left a colleague keeping watch. This situation is typical, says Currell: “I thought the congestion charge would make it easier to park in central London, because there would be less cars – but it hasn’t. We’re quite mechanised and use our van as a workshop. Of course, with the charge that’s all up the kyber. “It’s a crippling charge and it’s made getting around the capital much more difficult. There are still just as many cars – only they’re coming in earlier to avoid the charge.” Sometimes Currell travels to the site in the evening and drops equipment off to avoid the charge in the morning. The team then go up by Tube the next day. This isn’t suitable for every job, though. “We’re having to turn painting work away because we can’t leave our spraying equipment in case it gets stolen,” says Currell. He adds bitterly: “It’s getting ridiculous.”
Not only is it affecting current jobs, but Currell sees it as a problem when trying to get work for the future: “We now have to decide whether we even go to give quotes because we have to pass the charge on to clients. With the admin, it rises to £7 or £8. It’s taking the gravy out of jobs.”
The charge is also making it harder for him to find subcontractors. “I can get the best 20 chippies in the country but they won’t come up here any more. It’s not worth the hassle.” He foresees serious long-term effects for subbies in the city. “With all the aggravation there’s going to be a dearth of tradesmen in London.”
The shrinking margins caused by the toll makes it harder to attract workers. “I can’t afford to give my men bonuses anymore,” says Currell. “In fact, I’m the lowest paid member of my team.”
As a small business, Currell feels the impact of the charge hardest. “It’s another nail in the coffin of the small builder. Bigger firms like Bovis are immune to it all. They can absorb costs easier, while for us the margin is really getting squeezed. It’s killing the business. “At times I feel like saying: ‘Sod it – why should I do this?’ I ask myself if it’s worth working in London. I get offers all the time for QS or project management work, and I could make more money. But my firm’s like my family. I’ve worked hard at it. I don’t want to let it go. We’re providing an essential service for people. The whole congestion charge needs rethinking.”
My message to Ken
Congestion charging has begun. As predicted, it has quickly proved unfair and badly thought through. It unfairly penalises companies like mine, who simply cannot avoid the congestion zone. Within four days I had clocked up an amazing £40 in charges for the pleasure of working in the capital’s filthy, congested streets with their unsympathetic traffic wardens and idiotic bureaucrats. A simple message for that clown Ken – if we could, we would tell you where to poke your charge! However, we cannot; London is where we work. But there must be another way. I established Imperial Roofing 12 years ago. We have a staff of 15 and an annual turnover of about £1.5m, and we have contributed to the success of the London economy. We now feel we are being penalised for trying to run a business. Like many other small firms, we are increasingly frustrated by the amount of red tape we must comply with, and the imposition of ever more stealth taxes – for example, we must make an annual data protection payment of £95. Now we have to pay to go to work. The construction industry, in its usual style, has missed the boat with regard to exemption. Why are we being penalised for trying to do our job? Taxi drivers are exempt, so why aren’t we? It could be that Ken doesn’t realise that to get men, equipment and material to a site in central London requires a vehicle. Would he prefer that we load our membrane and glues and other essential items on to a bus? I drive into London about four times a week, visiting many sites and carrying out surveys throughout the capital. My ladder won’t fit on the bus or Tube. Of course, there’s another cost as well: nearly all our suppliers have advised us that “due to congestion charging, we are forced to add on the £5 charge every time we make a delivery to you” – as if we are their only customer. Before he imposed this charge on us, I wonder whether Ken considered how it would hit all the businesses that need to access London, such as goods and food deliveries, stationery suppliers and so on – all of which will pass on the charge. The result is that the spiralling cost of working within the capital will have an inflationary effect. It may be that London’s dear leader will be the one-man catalyst for the start of the next recession. This column should be seen as a friendly warning. If you think a plumber is hard to get these days, you ain’t seen nothing yet. In one or two years, a quality roofing company will be rarer than rubies. The simple reason is that insurance premiums, training requirements, employment status and all the other stealth taxes will force many out of business. The companies most at risk are those quality-minded outfits who train, pay the insurance, play the game. The cowboys, who suffer from no such financial disadvantage, are likely to flourish. Next time you need a roofing company, remember the above and don’t be surprised at the cost of the estimate. And I would like to deliver one final message for Ken: just pray your roof doesn’t need fixing.