Freelancers and SMEs need more government support

He explained that red tape from the European Union was holding back small businesses' ability to grow and ministers should be focusing on providing these firms with the tools they need to begin hiring more staff and exporting their goods and services overseas.

The UK has 6,000 large organisations and nearly 5 million small and medium sized enterprises. 3.8 million of those SMEs are sole traders. Half a million new jobs could be created if 500,000 small businesses hired one person.

However, for a lot of these firms, employing their first member of staff is a phenomenal challenge and they need help and advice to cope with all the regulations surrounding employment of others.

Meanwhile, recent research from the CMI shows that UK managers are despondent over GDP. Less than 10% of them think the UK's GDP will increase in the coming twelve months and 68% think we run the real danger of slipping back into recession.

Petra Wilton, the director of policy and research at the CMI, said the private sector is under enormous pressure to spearhead the recovery and the predictions from managers must give the government major cause for concern.

The CMI's research also found that a number of UK firms could benefit from changes to the taxation system. Managers said that the private sector would get a much needed boost if taxation was simplified and small businesses received tax breaks.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.
Image: Betty Boop by infomatique