Government accused of failing small firms

Sunday, 14 August 2005 12:00 AM

The government has been accused of failing to hit most of its targets to encourage the growth of small businesses.

The Confederation of British Industry (CBI) said small companies had been hampered by the uncoordinated delivery of government support and the increasing burden of regulation.

The report by the business organisation claims the government's Small Business Service (SBS) had missed four of its seven targets aimed at helping smaller firms in 2004.

The Department of Trade and Industry (DTI) agency had failed targets to build an enterprise culture in the UK, encourage entrepreneurs in disadvantaged areas, improve regulation and create a positive environment to encourage the growth of small firms, a CBI report says.

CBI director general Sir Digby Jones said the SBS was not to blame for failing to meet its targets but accused the government of stifling small businesses with red tape.

The CBI report claims that more unnecessary regulation has been introduced since 2000 and that concerns over employment legislation are deterring firms from recruiting staff.

"How can an enterprise economy break through when the government presides over systematic, stifling red tape, a discredited planning regime and a society that becomes more politically correct and risk averse by the day?" Sir Digby said.

But the DTI claimed that work was underway to simplify the regulatory structure and reduce the burden of legislation on small businesses.

"In March the government committed to one of the most ambitious programmes in the world to reduce regulation on business," said a DTI spokeswoman, in reference to plans announced by chancellor Gordon Brown in this year's Budget.

She added: "This includes simplifying regulatory structure, including merging 31 of the national regulators into seven and consulting on new measures to ensure that enforcement and penalty arrangements strike the right balance."

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