Tories in bid for the small firm vote

'Regulation Summit' tomorrow will look at ways of exempting SMEs from red-tape burden

The Conservative Party is considering a policy to exempt small and medium-sized enterprises (SMEs) from a tranche of business regulation.

Shadow Chancellor Michael Howard and shadow Trade Secretary Tim Yeo are hosting a "regulation summit" tomorrow to garner the opinions of think-tanks, trade unions and business groups on the effects of red tape on business.

The party intends to use the input to formulate its regulation policies. The Conservatives claim that businesses were subject to a new regulation every 26 minutes last year, and that dealing with them costs £6bn a year.

Mr Howard has said he wants to introduce exemptions on regulation for the SME sector. He has called for small businesses to be spared the increase in national insurance contributions.

The Small Business Bureau, an SME pressure group, is expected to ask questions on which exemptions are being considered. However, the party says it intends to wait and see what the industry representatives have to say.

"We will listen to their concerns, not just on the burden of regulation but also on the process of implementation and the cost of implementation," says a statement from the Conservatives. "We want to understand from those on the front line. We want to make intellectual progress towards a balanced approach to regulation."

Left-leaning think-tank the Institute of Public Policy Research will attend the summit, as well as the Institute of Directors, the Confederation of British Industry, the British Retail Consortium and the British Venture Capital Association.

The TUC, which has also been invited to the summit, believes many of the regulations are needed. "The talk of red tape strangling SMEs is not a case that has been made," says Richard Exell, senior policy officer at the TUC. "A lot of what's talked about in red tape is about protecting people at work and ensuring basic minimum standards."

The Conservatives are looking at ways to introduce "sunset clauses" for new regulations, so that after a certain time they would lapse or have to be re-introduced. The party also wants to end "gold plating" of European directives.

This week the Agency Workers Directive is being discussed by a European Parliament committee. It proposes to give temporary workers the same rights as full-time staff after six weeks. The CBI wants this to be changed to 12 months. It is also worried about the introduction of equal treatment of agency and permanent staff, particularly in wages, which it says is beyond the EU's remit and unworkable.

Another directive was agreed last week that will require member states to recycle half of all product packaging by 2008. The British Government's proposal is to introduce tough guidelines on businesses with a turnover of £1m which produce more than 50 tonnes of waste packaging a year. However, Grant Thornton, the accountancy and advisory firm, says that to meet European guidelines smaller companies will have to be targeted.

The Environment Agency has just launched a website with the aim of guiding small businesses through environmental regulation. Contact: www.environment-agency.gov.uk/netregs