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Budget UK Government

Budget: SME organisations applaud red tape 'holiday'

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By The Drum Team, Editorial

March 23, 2011 | 3 min read

Small business membership organisations north and south of the border have reacted positively to the announcement that SME’s will be granted a ‘holiday’ from red tape for three years in today’s budget to support small businesses.

All companies that have less than 10 people, both start-ups and established businesses, will be exempt from Government red tape for the next three years, Chancellor George Osbourne has announced among other measures.

Commenting on this announcement, which begins in May, Scottish Policy Convenor Andy Willox OBE, said: “62 per cent of Federation of Small Businesses (FSB) members in Scotland have seen the cost of red tape increase in the last four years. Three in 10 say it’s one of the main barriers to business success.

“While some regulation originates north of the border, many of our members will be pleased with the Chancellor’s announcement. While this moratorium is in place, is this not an opportune moment to ensure that all future regulation doesn’t tie our members in knots?”

The Forum of Private Business has also said it is pleased with the announcement, but claimed that the policy did not go far enough.

“The organisation is concerned that the moratorium will not apply to red tape stemming from EU law – which creates the majority of regulatory hurdles for small firms - and is also calling for similar regulatory relief for larger SMEs that have also been charged with creating the jobs set to be lost in the public sector,” a statement explained.

“While they will broadly welcome many of the Chancellors’ announcements, British business owners will be looking for much more in the way of real actions in the weeks, months and years that lie ahead,” commented the Forum’s chief executive, Phil Orford.

Other measures announced included a reduction in fuel duty by 1p while 40,000 extra apprenticeships will be funded for young people.

The small business rate relief holiday is being extended by one year to October 2012, at a cost of £370m, while freezing alcohol duties and air duty and increasing tobacco tax by 2%.

Plans to set up Enterprise Zones in some the most deprived areas of England have also been extended from 10 areas to 21. These areas will benefit from relaxed planning laws and discounted business rates, with the aim of encouraging job creation.

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