Ahead of next month’s Comprehensive Spending Review (CSR), the Forum of Private Business is calling on the Government to reform tax and red tape in order to boost small business growth and help reach its target of £20 million in savings.
The Forum is arguing that simplifying regulatory compliance and reducing the red tape burden, including streamlining the tax system, could help the Government’s public sector efficiency drive and also save smaller employers in the region of £12 billion per year, the annual cost of red tape for small businesses in the UK, revealed last year in the Forum’s ‘cost of compliance’ research.
Combined with a commitment to further cutting small business taxes in the short term, the not-for-profit business support and lobby group believes introducing these measures on 20 October could both stimulate entrepreneurship and help the Government rebalance the economy.
“Put simply, the UK’s economy – ‘UK plc’ should be run more like a small business, making the most out of the country’s valuable resources and ensuring that all departments work together to create and promote a real culture of enterprise,” said the Forum’s Chief Executive Phil Orford. “The Government should focus on cutting the social protection budget by getting people into sustainable employment in the private sector.
“Historically the public sector has accounted for just under 40% of economic activity in the UK. Reducing it back to that level will inevitably mean significant cuts and there will no doubt be some pain to come. “However, there are also opportunities that could bring significant benefits for small firms. Our members frequently complain of duplication, confusion caused by different public bodies and excessive bureaucracy. We have a rare chance to remove these barriers to business growth in this Comprehensive Spending Review. It should not be missed.”
In addition to tax and regulatory reform the Forum’s submission to the CSR calls on the Government to create value for money in the public procurement process by opening it up to small firms, and argues that targeting small business development as a way to increase employment should be prioritised. Further, the Forum believes that the public sector must avoid duplicating private sector business support and training provision, particularly in the creation of new Local Enterprise Partnerships (LEPs), and that instead, in providing support services, the public sector should address private sector market failure when it occurs.
6 October 2010
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