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Health & safety red tape stays firmly stuck in place

11 April 2013

SMEs might now be benefitting from significant changes to work place health and safety (H&S) regulations had they not been blocked by the House of Lords.

SME support organisation, the Forum for Private Business said the removal of strict liability for employers would have meant H&S becoming less of a burden on employers, adding that the proposed new focus on making employees more aware of, and responsible for, their own actions was something its own recent research had confirmed has the widespread support of small business owners.

The new measures had been due to come into effect on April 6 as part of the Enterprise and Regulatory Reform Bill, but the clause was defeated in the House of Lords, meaning it won't now be adopted in statute.

The Forum's head of policy, Alex Jackman said the deregulatory measure meant as long as an employer took reasonable steps on H&S, they shouldn't be subject to prosecution for things they couldn't possibly have predicted or prevented.

"It's a fact of life that accidents, unfortunately, do just happen, and sometimes there's nothing that can be done to prevent them," said Mr Jackman. "This new approach to H&S would have gone a long way to recognising this. For too long the entire onus has been on the employer as part of a blame-game approach that has cost business millions, and has also tarnished people's view of what's a very serious, important subject.

"People have lost faith in health and safety, with organisations such as the Health and Safety Executive pilloried, and along the way that's debased the issue in the nation's eyes.

"We had hoped this new approach could help rebuild and restore trust and faith in workplace health and safety practices, while at the same time freeing business to get on with trading during difficult economic times. Sadly, not all share the view that employees should have a degree of common sense around health and safety law and we will have to wait a little longer."
The Forum believes excessive regulation has cost UK firms both time and money in recent years, tangling firms in red tape and preventing them from growing their businesses. It urges the government to press on with the changes in the face of what it describes as misguided opposition.

Plugging gaps in SME financing
Meanwhile, business secretary Vince Cable has launched the first phase of the new business bank with an injection of £300m of new funds to address shortfalls in the SME finance market. This is the first tranche of cash to be released from the £1bn of new capital allocated to the business bank in the 2012 Autumn Statement. The government hopes the Business Finance Partnership will attract at least the same amount in private sector investment.

Research by the National Institute of Economic and Social Research reveals that SMEs have been disproportionately affected in their ability to access finance as a result of the contraction in bank lending since 2008. The government wants to promote greater diversity of debt finance available to SMEs by encouraging the growth of smaller lenders and new entrants to the market.

Proposals are being welcomed from a wide range of lenders; the government says it is prepared to invest alongside private investors of all shapes and sizes, including existing and new smaller lenders, debt funds, asset backed lenders, supply chain finance, peer-to-peer lending and other lending platforms. The first transactions are expected to be in place by Autumn 2013.

The CBI's principal policy adviser for enterprise, Hayley Conboy said the £300m fund demonstrated the government's commitment to support growth og the SME sector. She believes it will broaden the funding options available to growing firms by boosting the alternative finance provider market. "The key to the success of this and other government finance schemes will be to raise business awareness of the initiatives available," she adds.

If you want to find out more about getting involved in these investment platforms, advice is available here.

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