Red tape hindering employment, says FSB

Date: 12th December 2008

Red tape is preventing a large number of business start-ups from taking on new employees, according to one organisation.

An investigation by the Federation of Small Businesses (FSB) revealed that the number of firms with a workforce of up to nine staff has fallen, which could suggest small companies are employing less people.

The FSB believes that this is because recruitment in the sector is being stifled by government bureaucracy.

National policy chairman for the FSB, John Walker, said: "Small businesses are clearly good employers who look out for their employees, offer them flexible working and are more likely to employ those who were previously unemployed."

He added that while business start-ups play an important role in training their workforce, they are also hindered by changing laws and taxation regulations.

This week the London Development Agency revealed that it was launching a £23 million package of public sector support for the capital's business start-up community.