Julian Smith MP: Small businessmen are the best judges of employment relations. The Beecroft report will empower them

Julian Smith is the Member of Parliament for Skipton and Ripon, and Co-Chair of the All Party Parliamentary Group on Micro Businesses.

Start-ups and small businesses are the growth engine for Britain’s economic future. There are over four million businesses in the UK with fewer than ten employees, accounting for over seven million jobs.

Regulation, and particularly employment regulation, is the main issue - other than financing - that start-ups and very small businesses and their representative business organisations complain about. In fact over half of Britain's smallest companies say that the complexity of employment law is putting them off hiring more staff. Now the Government has launched a consultation on simplifying the dismissal process and the concept of ‘compensated no-fault dismissal’ for micro businesses. It is something I have been calling for since being elected and, though it has taken longer than I would have hoped, I am pleased it is now underway. Ministers want to hear from those involved in business from across the country - and, given that one side of the Coalition has serious concerns regarding these changes, we need to ensure that the voice of business is heard loud and clear in the consultation.

The proposals would see the dismissal rules that a small firm has to go through to fire an employee reduced from twelve pages to one, and a new mechanism - no fault dismissal - allowing employers to give notice to employees in return for a compensation payment similar to the levels set for redundancy.