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The BBC's Carole Walker
"The battle for the business vote is well underway"
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Tuesday, 4 April, 2000, 04:09 GMT 05:09 UK
Red tape burden facing cuts
Small firms face say old Labour is rearing its head
The government's record on business is coming under scrutiny as representatives of Britain's small firms gather for their annual conference.

Trade Secretary Stephen Byers is expected to use the conference to announce the government's intention to cut red tape.

But another high-profile speaker, Shadow Chancellor Michael Portillo, is set to accuse Labour of ignorance and arrogance in its policies for business.

The British Chambers of Commerce's conference will also hear from Bank of England Governor Eddie George.

Growing disillusionment

Mr Byers is expected to signal the government's determination to free about 150,000 small companies from the need of having to produce independently audited annual accounts.

Firms have also cited the Working Families' Tax Credit, minimum wage and employment relation regulations as all adding to small business pressures.

Stephen Byers: Hoping to dispel firm's fears
Chris Humphries, director general of the British Chambers of Commerce (BCC) says there is growing disillusionment with the government's business credentials and a feeling that old Labour tendencies are coming back.

Mr Byers will have a chance to hit back when he addresses the BCC's annual meeting in London on Tuesday.

BCC members are also expected to attack the Budget for its failure to do anything to alleviate the strength of sterling, which has left exporters struggling to compete in overseas markets due to the high value of the pound.

The Budget may have abandoned the last best chance we had to take the pressure off interest rates

BCC deputy director general Dr Ian Peters
Some City analysts have warned that Chancellor Gordon Brown's 4bn cash injection into public services could force the Bank of England to counter the risk of inflation by raising interest rates yet again, pushing sterling even higher.

The words of Mr George will be closely scrutinised for any hint as to what the Bank's Monetary Policy Committee will do when it assembles later this week for its monthly rate-setting meeting.

Most City analysts were still expecting the committee to leave the cost of borrowing unchanged at 6% for the second month in succession when it announces the outcome of its deliberations at midday on Thursday.

BMW's sale of Rover could lead to more job losses
However, BCC deputy director general Dr Ian Peters warned that Mr Brown would be held to blame if rates did go up again.

"The Budget may have abandoned the last best chance we had to take the pressure off interest rates and ensure more balanced growth in the UK," he said.

"The chancellor has now left both himself and the Bank nowhere to turn."

Shadow Chancellor Michael Portillo will accuse the government of demonstrating ignorance, arrogance and malice in its policies towards business.

Meanwhile, the government is reportedly worried that the country's automobile industry will shed thousands more jobs as concern mounts over the strength of the pound.

Mr Byers was in discussions with several carmakers about "managing change", in the wake of BMW's decision to sell its loss-making Rover business, said The Independent newspaper.

The companies believed to be involved in the talks included Ford, which has announced plans to cut the workforce at its assembly plant at Dagenham in east London.

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