The Federation of Small Businesses (FSB), the UK’s largest business organisation, today welcomed the launch of the Conservative’s Economic Competitiveness Policy Group report from John Redwood. However, the FSB also pointed out that deregulation has been a favourite theme of all political parties with little action to follow it up. Small businesses believe that politicians now have to deliver on their promises.

FSB research has shown that the average small business spends 28 hours per month filling in forms for the Government. A third of FSB members also say that they will not take on more staff because employment legislation is too onerous. This is clearly a significant barrier to growth for the UK economy, particularly at a time when the Government is looking to small businesses to create employment opportunities and economic growth.

The FSB believes that, contrary to the worries of the trades unions, simplified employment and health and safety legislation will enhance the protection of employees as well as lift a significant burden off employers. If regulations are written more clearly then small business owners, who do not have human resources departments or legal advisers to fall back on, will be able to understand and meet their legal requirements and will be able to do so more quickly. This will free them up to spend more time growing their business to create more jobs.

By making employment legislation clearer to interpret for employers, more businesses will feel comfortable hiring more people, which will lead to a growth in this sector. Small businesses currently employ fifty eight per cent of the private sector workforce (twelve million people) and produce half of UK GDP.

John Walker, FSB Policy Chairman, said:

“The current system of regulation is holding back the UK economy and preventing the creation of more jobs. Mr Redwood has correctly identified that in his report.

“Reducing the complexity of regulations is the way forward. However, we have heard encouraging words from all the political parties on cutting red tape many times before with no delivery.

“The report today has some encouraging ideas in it and the inclusion of regulatory reform in the title of the Government’s replacement for the DTI is also welcome. However, it is now time for action from all political parties. Small businesses can deliver for their local communities and create more jobs. The politicians just need to relax their grip to allow the economy to flourish.”