More Small Businesses to Be Saved from Red Tape
Small businesses with up to 50 employees will be saved from new burdensome regulations…
Business Minister Michael Fallon has announced that small businesses with up to 50 staff will be saved from "burdensome new regulations" by extending a freeze on regulatory exemptions.
Previously micro businesses, those employing fewer than 10 staff, were to be exempted from regulations under the Micro-Business Moratorium announced in the 2011 Budget.
The latest initiative is named the Small and Micro Business Assessment (SMBA) and is designed to ensure that small firms are not impeded should there be evidence that regulations might restrict their growth.
In a statement through the Department of Business, Innovation and Skills website, Business Minister Michael Fallon said of the new inititive:
“We all want faster growth. 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.”
“On my watch, new regulations will now only extend to small businesses if they are essential, justified, and where disproportionate burdens are fully mitigated. And where regulation is not fit for purpose it will be reformed or binned.”
New regulatory proposals will now undergo a rigorous assessment by the independent Regulatory Policy Committee (RPC) before being further scrutinised by the Reducing Regulation Committee (RRC).
Should unneccessary burdens on small business be identified at any stage of the process, the regulations will only be approved if exemption is granted to smaller businesses.
The initial impact assessment will require that the scrutineering departments look at a number of mitigating strategies to help small businesses such as:
- Prioviding extra time for smaller businesses to comply with new regulations
- Simplify record-keeping processes for small businesses
- Tailoring guidance and advice for the smaller businesses
- Ensuring that regulatory requirements are tailored to business size so that action by small firms is proportionate
Alexander Ehmann, Head of Regulatory Policy at the Institute of Directors, said of the latest news:
“The IoD has argued for a much tougher system of challenge when government is applying regulations to small and micro businesses. We are pleased to see this turned into reality with the introduction of the SMBA. Businesses across the country should welcome this new system, which gives the Regulatory Policy Committee much-needed powers to throw out rules which are unmanageable for the UK’s smallest businesses.”
John Allan, National Chairman of the Federation of Small Businesses added his voice to the announcement, saying:
“The burden of regulation often falls heaviest on the smallest of firms. This is why the FSB has called for the RPC to have sharper teeth to defend small and micro firms against poorly framed regulation. The small and micro business assessment should help to make future regulation more manageable and proportionate for the smallest firms, and is to be welcomed. This should mean that business owners will be able to devote time to growing their business and creating jobs rather than form filling.”
The SMBA will extend beyind the end date of the Micro-Business Moratorium so that firms with fewer than 50 staff are covered from the 1st April 2014.