Welcome news from the Government, which has announced it is extending its exemption on red tape to more small businesses. The move will mean that firms with up to 50 employees will now not be forced to comply with onerous new rules. The freeze, which had previously only applied to businesses with less than 10 staff, is being widened in a bid to enable small firms to help kick-start the economy.
The move is part of a package of new measures, known as the Small and Micro Business Assessment, aimed at encouraging small businesses to grow by reducing the time they have to spend dealing with regulations. Business Minister Michael Fallon also said in a press release* that policies that unduly penalise small firms would be “binned”.
“As Britain recovers, small businesses are leading the generation of ideas, the creation of new jobs and the shift towards a balanced economy. We cannot afford to hold them back with more rules and regulations,” said Fallon.
The Government’s own red tape watchdog – the Regulatory Policy Committee – will try to make sure departments do not introduce policies that harm small firms. Those that do will either be scrapped, or small businesses will be granted an exemption or their impact on them will be mitigated, such as by giving small firms more time to implement the new rules or being allowed to fill in fewer forms, keep simpler records and have fewer inspections than larger companies.
Business groups, including the Institute of Directors and the Federation of Small Businesses, welcomed the announcement.
Deepak Soni, Head of Small Business Insurance at Hiscox, commented: “In essence it is good news that SMEs with fewer than 50 employees may be exempt from the latest round of red tape. What would have been better is less red tape affecting businesses altogether.”
The Government also said it would make it easier for small business owners to get the advice and support they need to help them grow.
These include a £30 million “Growth Voucher programme” to encourage more small businesses to get specialist help on issues such as expanding their workforce, marketing, financial management and growing online. Government research shows that few small firms hire external consultants, even though those firms that get external advice grow faster.
The Government also wants university business schools to work with small firms by providing them with advice, and to encourage MBA graduates to join small businesses rather than setting their sights on big corporations or consulting jobs.