I'll curb new red tape on small firms, says Business Minister: Michael Fallon vows to 'reform or bin' any rules that would hit companies Department for Business to ban new regulation hitting small firms The crackdown will come into effect immediately New Government regulations which would hurt small businesses will be 'reformed or binned', the Department for Business will announce today. In a dramatic attempt to crackdown on red tape, Michael Fallon will ban the introduction of new regulation by any Government department which would hit small firms. He is expected to say: 'On my watch, new regulations will now only extend to small businesses if they are essential, justified and where disproportionate burdens are fully mitigated. And where regulation is not fit for purpose it will be reformed or binned. Cutting red tape: Business and Enterprise Minister Michael Fallon will announce changes today The crackdown will come into effect immediately, and will apply to small businesses employing up to 50 staff. The vast majority of British businesses will benefit. Of the 4.8million businesses in this country, only 1.2million actually employ one or more people, according to official figures. It comes after red tape has for years been regularly cited by small firms as the biggest problem that they face. While entrepreneurs want to be focused on growing their business, millions complain their time is wasted on the constant mountain of red tape paperwork which needs to be filled in. Small business lobby groups have regularly warned their members are 'hammered' by red tape which they insist is thwarting Britain's chance of a full economic recovery. Today Mr Fallon will say he has listened to their fury about red tape, and promise to stem the flow of time-consuming regulation which distracts them day in, day out. Small business lobby groups have regularly warned their members are 'hammered' by red tape He will say: 'We all want faster growth. As Britain recovers, small businesses are leading the generation of ideas, the creation of new jobs and the shift towards a balanced economy. We cannot afford to hold them back with more rules and regulations. Last night, business lobby groups welcomed the move, which will affect all new ideas with immediate effect and apply to all regulations coming into force after 31 March 2014. John Allan, national chairman of the Federation of Small Businesses, said: 'The burden of regulation often falls heaviest on the smallest of firms. This announcement should mean that business owners will be able to devote time to growing their business and creating jobs, rather than form-filling. Alexander Ehmann, head of regulatory policy at the Institute of Directors, said they are 'much-needed powers to throw out rules which are unmanageable for the UK's smallest businesses.' Under the new system, all new regulations must be scrutinised by two committees, which have the power to veto them if they are deemed to be harmful to small businesses. Alternatively, the committee can grant an exemption to small businesses, or change the rules to mitigate the impact on small firms. For example, the rules around record-keeping for small firms - one of their biggest bugbears - might be simplified, but not for large firms. The British Chambers of Commerce said it will 'keep an eye' on the new policy to ensure that it is actually making a difference to firms, rather than just becoming another failed attempt to curb the explosion of red tape. It comes after the Prime Minister said yesterday he will accept all the recommendations made by his small business tsar Lord Young in his recent report. They include scrapping the age restriction, currently 30, on people who can apply for a popular 'start-up loan' from the Government to allow entrepreneurs of all ages to apply.