The channel has supported plans by the Federation of Small Businesses (FSB) for the government to cut the administrative burden on small and medium-sized enterprises (SMEs) and help them take on new staff.

Last week the FSB unveiled its blueprint for tackling the rising wave of unemployment, with a five-point plan to create 400,000 new jobs.

Pressing the government to act, the plan identified five key areas:
the promotion of part-time working, investment in apprenticeships; simplifying legislation; giving small businesses more opportunities to bid for public contracts and cutting payroll taxes.

FSB representative Marc Shoffman said: “The government needs to act so SMEs can become more ambitious without having to fear taking on new staff. There are about four million SMEs in the UK ­ ideally we would like each of them to take on just one new member of staff.

“Steps can be taken to bring together plans that were due to take effect last year, but failed to. The government said it would pass 30 per cent of procurement deals to SMEs. According to our research, last year just 16 per cent of small businesses gained access to these contracts.”

The FSB claims that by decreasing the burden of regulation on
business, the government could increase job numbers by 160,000 and save 73,000 jobs by preventing company closures.

Lee Bevan, managing director of VAR Leapfrog AVIT, said: “Firms cannot cold call databases or send mail shots to generate new business due to so many spam regulations.”

At the prime minister’s recent Jobs Summit, Gordon Brown said measures are needed to stop “temporary rises in unemployment being made permanent, with whole communities written off as we saw in the past”.

Brown announced a £500m, two-year scheme enabling employers to receive up to £2,500 to hire and train staff, for people unemployed for more than six months.

However, Pierre Lams, director of VAR Handheld PCs, said: “The government is missing the point ­ it is not a case of cash backs, banks need to free up capital for SMEs. Reducing National Insurance would also help.

“It is not a case of whether we would like to expand, but whether the banks will let us.”

Shoffman said: “The FSB was hoping the government would support those that stay in employment. The funding is available to those out of work for six months so it does not really encourage them to stay employed.”