The Small Business Council has set out its manifesto for what it believes small businesses are entitled to expect from the government’s forthcoming pre-budget report.

The pre-budget report, to be presented by Chancellor Gordon Brown on the 2 December, will, as well as wider implications for the UK economy, outline the changes that small businesses can expect in the coming year.

One of the main sections of the wish list calls on the government to tackle the growing cost of regulation, setting a target of a 25 per cent reduction.

It goes on to suggest that every policy maker should be required to simplify, reduce or remove a regulation or regulatory cost each year.

William Sargent, SBC Chairman, said: “Attention must shift to their quality and relevance, starting with the feasibility of a policy proposal, and whether or not it will achieve the intended outcome.

“It must also examine the cost implications for small firms - shockingly only 7% of RIAs do this at present. Lastly, we would like to see each government department being required to publish details of how it has considered alternatives to regulation."

The report also underlines the disappointment felt by many employers towards the government’s handling of the UK’s skills shortage. The SBC claim that the National Skills Strategy is ‘diluted at ground level’ because of too much focus on qualification based training.

Other proposals in the report include:

  • Better policymaking: effective consultation with small firms; regulation as a last resort; clear sign-posting and communication of new legislation; recognition that one size doesn't fit all.
  • Regulatory Impact Assessments (RIA) should be re-named Policy Impact Assessments and undergo an overhaul to ensure that they are meaningful.
  • The cost of being governed and doing business with the Government being reduced each year
  • Retained profits should be tax-free to encourage business growth
  • Officials dealing with policies simplifying, or abolishing one or more regulations per year per person
  • Business support should be demand-led, not supply-led

The report also addresses the issue of finance by calling on the government to encourage businesses to invest in growth by not taxing retained profits as well as fairer tax treatment between the costs of raising debt versus equity.

Sargent said, “"Our Annual Report sets out some fairly radical thinking on how the Government can make life better for millions of small businesses, many of which operate regionally. They are the engine room of the British economy and policymakers across the board must look outside their ivory towers and get in tune with the needs of such businesses."