Government business policies 'out of touch with reality'

The government’s policies have been condemned as doing little to kick-start growth and being "too timid" with the reality of the UK’s economy. 

In a statement released ahead of the Conservative party conference, which started on Sunday, the Federation of Small Businesses (FSB) declared bolder policies are needed to tackle the tough challenges faced by small businesses.  

John Walker, national chairman of the FSB, said: "If unemployment was lower and consumer spending higher, government policies to grow the economy might work. But they are out of touch with reality. 

"With economic growth sluggish at best, spending on the high street low and unemployment high, the government needs to ratchet up its growth agenda and send a clear signal to the business community that it will support them."

A reduction in red tape, as seen in the government's Red Tape Challenge, was welcomed by the FSB but the organisation argued that the cuts do not go far enough to help entrepreneurs. 

The FSB called for measures to extend existing schemes to boost employment within small businesses and argued for a 5% VAT cut in the tourism and construction sectors for one year. Mirroring shadow chancellor Ed Balls, the organisation also suggested the extension of a national insurance tax break for small businesses taking on extra workers. 

According to The Telegraph, David Cameron will call for further reductions in regulatory barriers in his party conference speech on Wednesday.

BusinessZone.co.uk is providing full coverage of the Conservative conference.