Government vows to cut red tape for small firms

Business groups have welcomed the proposals


Business secretary Vince Cable has proposed a three-year moratorium on new domestic rules under government plans to cut red tape and boost economic growth for small firms.

The new rules to reduce the regulatory burden on business were unveiled today at the Federation of Small Businesses (FSB) annual conference in Liverpool, by the business minister Mark Prisk.

At the conference Prisk said: “We are giving those affected an opportunity to tell us which rules are badly designed, or straightforwardly a bad idea. The onus of proof will then fall on Whitehall to prove why the regulation needs to stay, or if there is another way of achieving the same outcome.”

Further measures outlined by Prisk included: ending workers’ rights to request leave for training in companies with less than 250 employees and abolishing the extension of flexible working rights planned for 300,000 families from April. The 22,000 regulations that effect business are also to set to be published.

The decision to cut red tape has been welcomed by business groups who have long been campaigning for a reduction in regulation for small firms. However, the Confederation of British Industry (CBI) has urged the government to ensure next weeks’ Budget has the needs of small companies at its core.

John Cridland, CBI director-general, said: “Smaller firms are job-creation dynamos. The government must think small first by tackling regulation, which distracts them from growing the business and creating jobs.

“If the government gets the law right for small firms, it gets it right for all firms. Thinking small first would better harness the potential of SMEs, rather than simply exempting some of the smallest from aspects of the law that undermine growth.”

National chairman of the FSB, John Walker, commented: “We need to see the chancellor use the Budget to create a country fit for entrepreneurs by providing incentives for businesses to take on staff and for self-employment to become a viable choice for the unemployed.”

The UK’s small and medium sized businesses provide almost 60% of jobs and account for half of the country’s economic output.

© Crimson Business Ltd. 2011

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