Less red-tape for small businesses

Mar 21, 2011 - 01:36 pm

Business Minister Mark Prisk has announced that the government intends to cut red-tape for smaller businesses.

In his speech to the Federation of Small Businesses annual conference he said that the changes would lift the regulatory burden coming from Whitehall.

Small firms with under 10 staff will not be subject to new regulations for three years under a government plan to boost the economy. 

This includes not giving workers at firms with fewer than 250 staff the right to request leave for training.

He said there would be a period of consultation about how the moratorium would work. But he promised that "the exemption will kick in very shortly".

"Furthermore, we will continue to exempt companies of fewer than 250 staff from the right to request time to train. We know this measure, brought in by the last government, has caused considerable irritation."

There are also plans to revoke regulations giving parents of children up to the age 17 the right to flexible working hours.

Small and medium-sized businesses account for almost 60% of jobs in the UK and for half the country's economic output.

But there are also 4.6 million firms with 10 or fewer staff - so-called micro businesses - which the government feels are unfairly burdened by red tape that is more often designed to cover larger enterprises.

Mr Prisk said: "A large company may be able to afford the dedicated compliance and HR personnel to cope with the large volumes of regulation that are part of commercial life.

"For the smaller firm, this may mean the owner having to waste hours on form filling."

The Federation welcomed the proposed changes. "Regulation is one of the most burdensome and complex issues for small businesses, so it is a real victory for the FSB and small firms across the country that the government has finally listened," said the group's chairman, John Walker.

He said that the moratorium on new regulations for micro-firms was particularly important.

It will give them "the confidence and stability they need to employ more staff without the worry of constant changes in employment law," Mr Walker said.

The CBI employers' group wants the coalition to go even further with its regulatory changes.  The CBI said that small firms should be given the right to an annual review of flexible working conditions and calls for firms to have the right to agree return dates for staff on maternity leave.