A Government-commissioned report by business leaders on “EU red tape” is wrong to label health and safety as a threat to small firms, a leading professional body said today.

The document, presented by its authors to the weekly Cabinet meeting in Downing Street, highlighted the ‘30 worst threats to small firms’. “Problematic, poorly-understood and burdensome European rules” slowed production, job creation, sales and innovation and left Europe trailing international trading rivals, the report said. And among recommendations was for small businesses in low-risk sectors to be exempted from keeping written health and safety assessments. It’s estimated that relaxing these rules could save businesses across Europe £2.7 billion, said the Prime Minister’s business taskforce.

Richard Jones, head of policy and public affairs at the Institution of Occupational Safety and Health (IOSH), said: “It’s important to remember that health and safety failures in the UK cost society a staggering £13.4 billion per year, double this once you take into account the cost of occupational cancers and property damage. “In this latest report, we’re concerned that once again health and safety is misunderstood and wrongly labelled as a hindrance to business – whereas research shows that positive feelings about work are linked with higher productivity, profitability and worker and customer loyalty.” The report fails to make clear that small firms in the UK, employing fewer than five employees, are already exempted from keeping written risk assessments, said Mr Jones. “We would argue that what small firms actually need is more help from Government, for example more promotion of all the free tools, welcomed by SMEs, which help make risk assessments easier,” he added.

“In terms of economics, we understand that at least one European employer body (UEAPME), while supporting simplification, has opposed general exemption from health and safety laws for small firms because of fear it would create a two-tier system in the internal market and be detrimental to their members.” The taskforce’s report, ‘Cut EU red tape’, sets out how the European Union could promote enterprise and boost growth by “sweeping away poorly understood and burdensome rules and preventing similarly pointless legislation in the future”, said a Number 10 press release.

Welcoming the report, David Cameron said: “It’s vital that business can take full advantage of the EU’s single market. But all too often EU rules are a handicap for firms, hampering their efforts to succeed in the global race. “Business people, particularly owners of small firms, are forced to spend too much time complying with pointless, burdensome and costly regulations and that means less time developing a new product, winning contracts or hiring young recruits. “I’m determined to change that and to get the EU working for business, not against it.”