Government seeks to ease European burden on small business

British companies employing fewer than 20 people should be exempt from European regulations to ease the financial pressures they cause, the government is proposing.

According to the FT, business secretary John Hutton will ask EU enterprise commissioner Günter Verheugen to include the exemption in the European Small Business Act currently being drafted in Brussels.

In a letter to Mr Verheugen to be sent this week, Mr Hutton will reportedly ask that legislation is introduced on only one or two days a year, to help SMEs plan ahead and save money.

He is also expected to suggest that small companies should be allowed to take a "tailor made" approach to European rules should a full exemption not be possible, and to call on Mr Verheugen to set a cap on the cost of any new regulations.

In the speech due to be given at the Confederation of British Industry (CBI)’s Entrepreneurs' Summit today, Mr Hutton will say: "Every regulation has a cost. Too much stifles enterprise and blunts our competitive edge. It’s critical we have the intent and capability to prioritise and simplify essential regulation, and eliminate unnecessary burdens wherever they exist."

According to the FT, a spokesperson from Mr Verheugen’s office said it was too early to say whether there was enough time to include the British proposals in the draft legislation.