FSB urge Chancellor to deliver 'enterprise principles'

In a submission to the Chancellor of the Exchequer, prior to this month’s Pre Budget Report, the FSB said that "if the government wants to encourage enterprise it should give small firms a fair slice of public sector contracts and reduce red tape to create an environment in which all businesses can prosper".

Britain’s leading small business organisation urged Gordon Brown to:

• Make it easier for small firms to bid for lucrative public sector contracts;
• Combat red tape by returning responsibility for paying state benefits to the taxman;
• Recognise that micro businesses are the backbone of the economy by reducing the tax burden on the self employed;
• Introduce radical measures to combat the informal economy;
• Bring in tax breaks for businesses to assist them in making their premises accessible to disabled people.

Addressing the five policy principles Northern Ireland Policy Chair Wilfred Mitchell said: “British businesses are missing out on billions of pounds of lucrative government contracts because they are required to jump through hoops and wade through masses of red tape just to be in the running.

“The best way to assist small businesses is not by introducing yet another business support scheme but is by making it possible for them to win work from the public sector. Government contracts should be advertised more widely and businesses should be able to register their interest more easily and at any time.

“One of the principal constraints on the ability of businesses to create jobs is the growing administrative burden which falls disproportionately on small firms.

“We are urging the Chancellor to kick-start a renewed government effort to combat red tape by returning responsibility for paying state benefits and collecting loan repayments to the experts in government agencies such as the Inland Revenue.”

On the issue of the tax burden on micro businesses Mr Mitchell said: “A self-employed person now pays up to 32 times more tax than his incorporated counterpart. No other tax system in the world favours one form of business structure over another or penalises the smallest businesses in this way. The Chancellor must recognise that the self-employed are the backbone of the economy by introducing a small business allowance and ensuring that all businesses are treated equally and fairly in the future.”

Turning to the "informal economy," he said that businesses operating in the shadows competed unfairly with their legitimate counterparts. He said that previous government initiatives had been ineffectual and had served to damage legitimate businesses.

“Measures to combat the informal economy have to be radical in order to succeed," he said. "We want to see a three-month amnesty to bring all employers into the PAYE scheme, reform to the VAT system to allow free movement of goods and services between registered traders and a substantial increase in personal allowances to remove low earners from income tax altogether.”

He added that small firms were sensitive to the needs of the disabled but are worried about the costs of ensuring effective disabled access and called on the Chancellor to introduce a 100% First Year Allowance to ensure that all business premises could comply with the requirements of the Disability Discrimination Act.

(SP)