DTI ad push to aid small businesses

LONDON - COI Communications is talking to agencies on behalf of the Department of Trade and Industry about an advertising push designed to demonstrate the Government's support for small businesses.

The campaign will promote the work of the DTI-run agency, the Small Business Service, which was set up in April 2001 to champion small companies operating in the UK. Creative work will also highlight its Business Link advisory service, which offers impartial guidance to anyone running a business with less than 250 employees.

COI refused to confirm how much would be spent, but the push is thought to be worth about £2 million annually.

COI is understood to have drawn up a longlist of agencies for the pitch, which is due to be held in May. The media strategy for the campaign is as yet unknown, but COI confirmed that once a list of creative agencies has been drawn up, it would pair them with one of the media partners on its roster. This follows the strategy recently implemented by COI of pairing its creative shops with media agencies for ongoing pitches for the Department of Health and the Department for Work and Pensions.

The pitch is thought to have been prompted by recent claims that the Government has failed to create an "enterprise culture" within the UK since it took office in 1997, because of too much red tape imposed on small businesses. The British Chamber of Commerce has estimated that Labour-imposed regulations have cost businesses a total of £15.06 billion.

The Federation of Small Businesses also complained to the DTI following the Government's new employment bill, which states that from January 2003, all businesses irrespective of size, will have to follow formal disciplinary and dismissal procedures for employees. Currently, all those businesses with less than 20 staff are exempt. A poll showed 66 per cent of businesses thought that the bill would have a detrimental effect on their health.

The chancellor, Gordon Brown, will announce new measures to boost the UK's 3.2 million small- and medium-sized companies in next week's budget.

Brown's proposals will include a shake-up of the VAT system. This will allow small businesses to calculate how much they are liable to pay using a percentage of their turnover instead of working through the details of each individual transaction. This could save fledgling companies up to £1,000 each year.

Other proposals that could be included in the campaign include making commercial property transactions exempt from stamp duty and bringing in a new community investment tax credit, which will that mean entrepreneurs in deprived areas of the UK are eligible for tax breaks.

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