Chancellor again vows to slash red tape for SMEs

30 March 2005
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31 March 2005 | David Arminas

Small businesses could become more competitive as a result of Gordon Brown's budget commitment to reduce regulatory inspections and bureaucracy.

However, SMEs remain sceptical about the delivery of measures designed to reduce red tape.

"Purchasers should welcome this move because it will improve the efficiency of contractors in their supply chain," according to Stephen Alambritis, head of parliamentary affairs at the Federation of Small Businesses (FSB).

"If small businesses don't have to attend to inspectors, they can concentrate on improving their products, packaging, delivery systems and pricing structures, as well as supply chain issues."

However, he warned that small businesses have been promised a "bonfire of red tape," in the past, but "it has never been lit".

The plans, which promise to reduce inspections relating to health and safety and VAT, will also help larger organisations to focus on their core skills.

The Confederation of British Industry (CBI) said firms of all sizes, but especially SMEs, should welcome the proposals.

"It is good news for large companies as well," said a CBI spokeswoman. "But they tend to have big financial departments and people who already deal with the paperwork for inspections. Small firms often don't have people to handle this, so it takes them away from their day-to-day work."

According to the FSB, over the past five years more than 40 laws have been passed granting regulators greater powers to inspect areas including payroll details, environmental protection plans and employment issues.

"More than 300 inspectors have the right of entry, unannounced, to a business. We want one inspectorate, who can then recommend other inspections if they are deemed necessary."

"I think it is good news," said Peter Smith, a former CIPS president who now runs a small procurement consultancy.

"I am terrified of hiring more staff because of the payroll administration processes such as pensions, leave and national insurance contributions."


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