Govt plans to reduce red tape for small businesses

The government has pledged to redouble its efforts to reduce unnecessary red tape and thus stimulate growth in the broader economy.

Michael Fallon, the Business Minister, has hit out at overzealous regulators for inhibiting growth and promised to reduce regulatory pressures in the second half of this parliament.

As part of the new measures, the government intends to introduce curbs on the country's 60 non-financial regulators.

Speaking to the Telegraph on Sunday, Mr Fallon remarked: "We need to cut back on enforcement as well as regulation.

"That lies behind a lot of business concern - the way rules are enforced on companies that are clearly low-risk. This isn't about reducing consumer safety - it's about businesses being treated fairly."

Mr Falon added that he and the UK government will be applying pressure to officials in Brussels over the next few months to ensure that the European Union follows suit.

It is widely thought that with less red tape to contend with, UK-based businesses will have more scope for expansion.

Ultimately, it is hoped that this will lead to a spike in terms of job creation and the expansion of the broader economy.

In January, the Recruitment and Employment Confederation's (REC) JobsOutlook suggested that small businesses are likely to increase their permanent staff numbers in the next few months, regardless of the proposed changes.

More than half of the country's businesses are looking to hire more permanent employees in 2013, the report said.

What's more, one in three firms are looking to take on more temporary workers too as businesses aim to create growth in their operations.

Speaking at the time of the report, REC director of policy Tom Hadley said: "At first glance the predicted growth in jobs for 2013 may seem at odds with recent gloomier news about lack of GDP growth.

"There are various factors influencing what's been termed this 'jobs puzzle'. The fact that wage inflation remains low is one reason that employers have been able to maintain or increase their workforce."

Posted by Jacob Williams

Date published 28 Feb 2013 | Last updated 28 Feb 2013