New incentives for SMEs proposed

“Our focus must be on supporting the small to medium businesses and start-ups that drive our economy and create much-needed jobs across Europe. SMEs account for 99.8 percent of all Irish businesses and provide over two-thirds of all private sector employment EU-wide,” said Deirdre Clune MEP, EPP Group lead negotiator on a new European Parliament report on how best to harness the job creation potential of SMEs.

Speaking after the Parliament’s Committee on Employment and Social Affairs adopted the report (Wednesday), MEP Clune described small business owners and entrepreneurs in Ireland as the backbone of our economy.

“Today, the Employment Committee voted in favour of reducing red tape and removing unnecessary regulation for small businesses and start-ups. That means smarter regulation – not more regulation.

“The European Commission have given assurances that it plans to reduce the regulatory burden on businesses and, today, MEPs have added pressure to ensure they live up to these commitments. In effect, we want to make it easier and cheaper to set up a company, take on employees and avail of government supports,” the Ireland South MEP said.

“In our assessment, we examined labour costs for small businesses and how they can impact on competitiveness and the bottom line. National member state governments, including Ireland, should be looking to reduce taxation on labour - broadening out the tax base to other areas. SMEs can create jobs in rural Ireland but not if they are stifled by excessive USC and such taxes on taking on new staff."

In Ireland, 16,257 new enterprises were launched in 2014 - an increase of nearly 18pc on 2013. There were 19,159 persons engaged in these new enterprises. Data shows that almost 85pc of enterprises started in 2013 were still active in 2014.

“We also looked at access to SME funding and tax incentives that can be used to encourage young entrepreneurs to start new businesses – particularly in rural and outlying parts of Europe. We want entrepreneurs to be able to put their ideas into action," MEP Clune added.

The cross-party agreement on recommendations to help SMEs will be voted upon during a European Parliament plenary session in autumn 2016.