Byers: We'll do more for business

BCC conference: jockeying for business votes

Trade secretary Stephen Byers has told business leaders that the government needs to simplify regulation and the tax system.

"The plain truth is that businesses should run business," he said in a speech at the British Chambers of Commerce (BCC) annual conference in London.

Mr Byers said the government had done much to help business, including moving away from a stop-go economy.

"This was a vicious cycle which trapped businesses and individuals."

But he said: "In the new knowledge-based economy, we need a tax regime which reflects the nature of this new economy."

Radical look

Mr Byers said the government was now taking a "radical look" at the tax treatment of small companies.

He said payroll administration had become "more complex and time consuming" and the government would announce a new approach "in the very near future".

He gave no details as to what this new approach might entail but businesspeople said it was expected to embrace to simpler, electronic communication with key government departments including the Inland Revenue.

Mr Byers also announced several modest new measures the government was taking to ensure businesses didn't face a "raft of red tape".

Tribunals reform

These included amending employment tribunal rules to enable the tribunal to strike out cases unlikely to succeed.

He said the costs for which those pursuing "ill-founded" claims were liable would be increased to a maximum of £10,000 from £500.

"These new arrangements will help the situation," he said.

"My aim is to get back to what tribunals were originally set up to be: Quick, non-legalistic and fair."

Another measure involved removing small businesses from the requirement to pay merger fees.

Mr Byers said this was a "small" though "significant" step.

Record

Mr Byers also highlighted the government's record.

He said corporation taxes were at a record low while measures such as a new 10p starting rate for small company tax and tax relief on intellectual property and research and development for large companies had recently been announced.

Speaking at the same conference, the Conservative party leader William Hague had earlier said a Tory government would "set business free" from government.

"At the moment in this country we are going in the wrong direction.

"We are increasing tax and regulation," he said.

Five issues

The UK's three main business groups - the BCC, the Confederation of British Industry (CBI) and the Institute of Directors (IoD) - called on political leaders to promote a stronger enterprise culture.

BCC director general Chris Humphries said five issues headed the agenda: Skills, transport, red tape, tax and e-business.

He said the government needed to take action to ensure the right skills were available in the right place while 30 years of under investment in transport had created "crippling problems" for business.

CBI director general Digby Jones said he was "very optimistic about the future of business Britain" but that business needed more freedom.

"All regulation distracts from the real business of doing business," he said.

Massive task

IoD director general George Cox said that although British businesses had a slight advantage on tax over their European competitors this was being eroded.

He said enterprise needed to be "valued and understood" but that this was a "massive task".

"We're not getting across to young people what business is really about."

The conference is expected to be the last major business event before the general election and has attracted speakers from the three main parties.

The Liberal Democrat leader Charles Kennedy is due to speak on Tuesday afternoon while the Prime Minister, Tony Blair, is rumoured to be considering making an impromptu appearance at the two-day meet on Wednesday morning.