Julian Smith: Small businesses need the freedom to succeed

That's why it is right that the new Government is already taking action to reduce Labour's appalling burden. Business doesn't say that there should be no regulation, but there should be less regulation and it should be better. The avalanche of bureaucracy, box ticking and petty commands that have been heaped upon entrepreneurs and all small businesses went too far.

Last year, I co-authored the Arculus Report on Regulation for Ken Clarke and the Shadow Business team. I am delighted that many of these ideas have made it into the Coalition Agreement and are going to be present in forthcoming legislation.

They include "sunset clauses" on regulations and regulators, a concept of "one in, one out" forcing government departments who bring in new regulations to get rid of an old one first, and a Cabinet committee dedicated to reducing regulation. And I hope the opportunity of the Freedom Bill will be used by the new government to scrap a whole list of unnecessary regulations and red tape.

I set up my business from the front room of my flat 11 years ago. At that time Labour seemed to "get" business – taper relief offered attractive capital gains tax rates for entrepreneurs and a regulation and red tape tsar was appointed at Cabinet level to bear down on Government departments. But the momentum of that promising start was quickly lost. Health and safety, tax administration and employment law are three areas which spiralled in terms of the time and cost borne by me and other small business owners over the Labour years.

Small to medium-sized businesses create the majority of jobs in Britain. Here in Yorkshire, as across the country, they will be the engine for the growth we desperately need to get those who lost out in the recession back to work. Labour thought these businesses had a limitless capacity to deal with endless red tape and regulation – on average six new regulations per day of the last Government were rained down on UK companies.

The cost and time burdens placed on Britain's small businesses over the past decade run into tens of billions of pounds. I am confident that the coalition Government knows and understands this. Action is already underway with reviews on red tape on the farming industry and on health and safety laws.

But there are proposed Government policies which I believe need to be looked carefully through the prism of a hard working small business owner.

The new Government rightly wants to support families. Legislation is to be introduced to offer both men and women the right to request parental leave and to share their entitlement between them. For a company with many employees, this can be dealt with. But if you are a tiny company the implementation and consequences of this new law will be a source of worry, particularly given the state of the economy.

I will be encouraging the Government to delay the introduction of any new employment legislation until the economic outlook improves and consult widely to ensure that the voice of small business is heard and considered when it is introduced.

Small business should work to high standards, to customers, employees and shareholders. But the last Government forgot that it is already in the owner's interest to do these things in order to stay successful. As with so many other areas, disproportionate, bureaucratic micro-management from the centre creates resentment, particularly as over the past two years small businesses have been paddling furiously to stay afloat.

If you are a farmer in North Yorkshire and have taken the risk to diversify your farm by setting up a side business, or if at the moment you are thinking of taking the plunge and filling one of Ripon's empty shops with a new store, all the signals and actions of government should be to make it as simple as possible for you to get on with your business. That is all owners and directors want – freedom and simplicity. We must create the best possible environment for risk takers, inspired by profit and business ideas to give it a go.

We won't grow our economy by creating more opportunities for employment lawyers or health and safety consultants. We need the engines of Yorkshire small business to be firing on all cylinders to create jobs and tax revenue to kick start our economy.

The Government must ensure that small business owners are given as much freedom as possible to get on with running their businesses in the right way. By doing that, they will help to create the jobs and tax revenue that we so desperately need.

Julian Smith is the Conservative MP for Skipton and Ripon.