Job creation plans must include smaller firms

Small businesses must be central to Government strategies for private sector job creation, the Forum of Private Business (FPB) has said.

Following the Prime Minister's summit meeting with large employers this week, the aim of which was to boost employment levels, the FPB pointed put that SMEs account for six out of every ten private sector jobs and should, therefore, be the focal point of any plans for encouraging employment growth.

The Downing Street meeting was attended by 19 of the UK's biggest companies but included no representatives of the country's 4.8 million smaller firms.

Phil Orford, the FPB's chief executive, lamented the exclusion.

He said: "Individually, many small businesses feel that they are unable to present their concerns to Government. In this light, it is important that, in the future, they are given a prominent seat at the table when it comes to discussing such crucial issues as job growth and barriers to it, particularly employment red tape.

"Failure to listen to small business owners about employment will only further alienate them and fuel their concerns that they are, in reality, an afterthought at best."

Reports indicate that the Government is preparing to introduce an employers' charter which would support job creation among SMEs.

The charter may include measures correcting the perceived imbalance between the rights of employers and employees.

To reduce instances of workers' vexatious claims against employers, the charter could double the period, from one to two years, for which a staff member will have had to have worked in order to be eligible to make an unfair dismissal claim.

Employees may also be expected to pay a charge if they wish to take firms to industrial tribunals.

Mr Orford continued: "Any measures that make it easier to recruit employees and make key staffing decisions so small businesses can truly take advantage of emerging opportunities are to be welcomed.

"However, a lot more must be done to stimulate employment, including addressing the tax burden and freeing-up business owners from the £2.4 billion annual cost of compliance with employment law. Reducing this should be a central pillar of the Government's review of red tape."