A leading Bradford says small firms in the district are suffocating from the stranglehold of red tape - even though a Government Minister says it should be cut.

Richard Doyle, a partner at Bradford accountants Auker Rhodes, said: "We now have a Small Firms Minster who admits that the Government doesn't create wealth but that businesses do. She also acknowledges that 99 per cent of all Britain's businesses are small or medium sized. And importantly, the Minister agrees there's too much red tape and it needs to be cut."

But Mr Doyle said he could not say the same for the other Government departments dealing with smaller firms.

He said: "It seems that neither Mo Mowlam's red tape 'star chamber', set up to vet all Government regulatory proposals, nor the new Small Business Service, or the Better Regulation Task Force are making a jot of difference to the agony suffered by many thousands of small and medium sized firms today.

"They are suffocating from the sheer pressure, cost and distraction of complying with the minimum wage, the working families tax credits, the working time directive and the Fairness at Work white paper and with Tribunal Awards.

"The cumulative effect of more red tape and regulations is forcing owner-managers to spend excessive time and money on administration instead of concentrating on growing their businesses.

"The aggregate cost of complying doesn't only run into many millions of pounds, but also many thousands of jobs. This is no way to encourage more start-ups, or prevent more small businesses from collapse."

He said another 'red tape' issue which urgently needed sorting out by the Small Firms Minister involved small high-tech firms which needed to invest to achieve their full potential.

"But any investment has to be financed largely from retained profits on which tax has to be paid in the first place. Retained profits in high tech businesses should be tax free," he added.

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