2 October 2009

The Government must put a stop to all new business regulation and simplify red tape if it is to seriously tackle rising unemployment, the Federation of Small Businesses (FSB) said today, outlining its proposals for creating and saving more than 300,000 jobs. It called for a moratorium on all new business regulations and a rapid simplification of confusing bureaucracy. A survey of FSB members showed that nearly one in three businesses (27 per cent) that wanted to expand said they were too scared to do so, because they were put off by complicated regulation. Of those businesses planning to down-size or close, 50 per cent said their decision was strongly influenced by the regulatory burdens they faced.

According to the Government's own figures, 60 per cent of businesses listed regulation as an obstacle to success. Based on these statistics, the FSB estimates that removing these regulatory obstacles could create more than 258,000 new jobs and save more than 55,500 from being lost.

In a new policy paper entitled Regulatory Reform – a route to economic recovery, the FSB is proposing an overhaul of the UK's regulatory structures, calling for:

• A moratorium on business regulation: to boost the chances of job creation, the Government must halt all new regulation during the recession and for the first 18 months after recovery.
• Accelerated simplification of current laws: employers are currently confused and put off by maternity and paternity law; discrimination law; and health and safety legislation. All of these must be immediately simplified.

John Wright, National Chairman, Federation of Small Businesses, said: "We cannot and must not underestimate the burden that unnecessary regulation puts on small businesses. Around half of all firms planning to close or down-size were influenced in that decision by the heavy impact of regulation. However, we know that small firms want to employ more staff and the Government should be making it easier for them to do so, especially as we pull ourselves out of recession and into recovery.

"The FSB is urging the Government to give the UK's regulatory environment a strategic overhaul, to provide it with what will amount to a second economic stimulus, to boost growth and employment."

About the Federation for Small Business

The FSB is the UK's leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk