Thousands of the UK’s fastest-growing businesses will be released
from reporting requirements and other regulations in the future,
as part of plans aimed at boosting productivity and supercharging
growth, Prime Minister announced earlier today.
Currently, small businesses are presumed to be exempt from
certain regulations. However, many medium sized businesses –
those with between 50 and 249 employees - still report that they
are spending over 22 staff days per month on average dealing with
regulation, and over half of all businesses consider regulation
to be a burden to their operation [source].
As the Conservative Party Conference kicks off in Birmingham, the
Prime Minister has announced plans to widen these exemptions to
businesses with fewer than 500 employees for future and reviewed
regulations, meaning an additional 40,000 businesses will be
freed from future bureaucracy and the accompanying paperwork that
is expensive and burdensome for all but the largest firms.
Prime Minister said:
“By raising the definition of a small business, in terms of
regulation, from 250 to 500 employees, we will be releasing
40,000 more businesses from red tape.
“That will make it easier for them to get on with their business,
in turn boosting our economy and creating more jobs to help get
Britain moving. Higher economic growth means higher wages, better
jobs, and more funding for our public services and NHS".
Business Secretary, said:
“Our enterprising medium-sized businesses are being buried in
pointless paperwork, preventing them from reaching their
world-leading potential.
“That is why we are cutting red tape, starting with preventing
unnecessary future regulations for these companies. We are
harnessing the freedoms the UK has since leaving the EU, removing
bureaucratic and burdensome regulations on businesses, and taking
steps to create a dynamic, growth-led economy.”
The exemption will be applied in a proportionate way to ensure
workers’ rights and other standards will be protected, while at
the same time reducing the burden for growing businesses.
Regulatory exemptions are often granted for SMEs, which the EU
defines at below 250 employees. However, we are free to take our
own approach and exempt more businesses to those with under 500
employees. We will also be able to apply this to retained EU law
currently under review, which we would not have been able to do
without our exit from the EU.
The changed threshold will apply from tomorrow (Monday 3 October)
to all new regulations under development as well as those under
current and future review, including retained EU laws. The
Government will also look at plans to consult in the future on
potentially extending the threshold to businesses with 1000
employees, once the impact on the current extension is known.
This is the first step in a package of reforms to ensure UK
business regulation works for the UK economy. The reforms will
harness the freedoms the UK has since leaving the EU to remove
bureaucratic and burdensome regulations on businesses, while
streamlining and making it easier for them to comply with
existing rules, ultimately saving them valuable time and money.
ENDS
Notes to Editors
- Currently, government’s starting assumption when developing
policy is that SMEs (fewer than 250 employees) are often granted
exemptions to regulation. We are now amending this assumption to
businesses with fewer than 500 employees.
- These are not blanket exemptions, and they can be overridden
in appropriate cases as a result of the policy development
process including any consultations that may be undertaken if
there is a justifiable reason for doing so.
- The changed threshold will apply from Monday 3 October.
- 'Staff days' refers to the total number of days worked by
individual members of staff during one month.
