David Cameron to slash small business red tape - again

After Ed Balls announced he wants to bring back the 50p tax rate, Cameron is hoping helping small businesses will be vote-winner.

by Rachel Savage
Last Updated: 24 Feb 2014

David Cameron wants to be small businesses’ friend. The PM told a Federation of Small Businesses (FSB) conference that he’s going to take a hacksaw to thousands of rules and regulations, undoubtedly hoping to be greeted with adulation.

Cameron announced that more than 3,000 ‘over-zealous’ rules will be axed or altered, which the government estimates will save businesses more than £850m.

The rules being ditched veer wildly from the sublime to the ridiculous, including 640 pages of cattle movement guidelines, 380 pages of waste management regulations and 286 pages of rules about hedgerows. The Department of Environment, Food and Rural Affairs (Defra) will ditch 80,000 pages of environmental regulations by March 2015, which Cameron will say should save businesses around £100m per year (and a few trees too).

100 ‘overlapping and confusing standards’ for new homes will be cut ‘to less than 10’ (perhaps they need more grammar regulations?), which the government thinks will save homebuilders around £60m. Business rates relief worth £1.1bn, £100m of broadband vouchers and £2,000 each to fund growth for 20,000 small businesses, are also in the works.

However, while the FSB noted approvingly that the government is recognising ‘the vital contribution small businesses make to the economy and society’, they pointed out that more isn’t necessarily better.

‘Business support is congested and confusing with research showing hundreds of support schemes to help small firms, yet with little take-up or effect,’ the group said in a statement before the conference. It made admiring noises about the US Small Business Administration (SBA) and its ‘place at the Cabinet table’, and has lined up ex-head Karen G Mills to address the gathering.

FSB chairman Mike Cherry had a firm word for large companies too – pay your small suppliers ‘promptly’. They’ve been told.

Cameron’s policy announcements came after Labour shadow chancellor Ed Balls started the latest populist bandwagon rolling by saying on Saturday he wanted to bring back the 50p tax rate for those earning over £150,000.

Balls, whose brother Andrew is likely to be getting a hefty pay hike after being promoted to deputy investment chief at giant bond investor Pimco, looks like he’s onto a vote-winner – a Mail on Sunday poll found that 60% supported it.

‘This is not an anti-business agenda ... it's an anti business as usual agenda,’ Balls told the BBC’s Andrew Marr Show. Businesses were, however, less than impressed.

‘This is a backwards step which would put the economic recovery at risk and would very quickly lead to the loss of jobs in Britain,’ said a letter to the Telegraph signed by 25 senior business bods, including ex-M&S boss Sir Stuart Rose and former Diageo chief exec Paul Walsh.

With the reputation of ‘big business’ still smeared, however, populism may still drown out the chorus of companies’ disapproval. As MT Editor Matthew Gwyther has pointed out, businesses need to put their head above the parapet and shout about how great they are before people will believe it. Cameron certainly won’t.

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