On learning of another government initiative to ‘slash red tape’ for small and medium-sized enterprises (SMEs), it’s hard not to be a little sceptical.

After all, this worthy objective has been doing the rounds for several decades, along with ‘putting bobbies back on the beat’ and ‘cutting waste in Whitehall’.

But the Small Business, Enterprise and Employment Bill – heralded in the Queen’s Speech on 4 June – really could make a significant difference to Britain’s entrepreneurs.

For the first time, ministers will be legally obliged to set a ‘deregulation target’ for each Parliament and report on progress towards it. We have yet to see the details on this and another key measure, ‘making it easier for small firms to access finance’, but at least they promise concrete and measurable steps, rather than the vague aspirations of the past.

Frequent reviews promised
Here is how the Queen announced the Bill: ‘Legislation will be introduced to help make the United Kingdom the most attractive place to start, finance and grow a business. The Bill will support small businesses by cutting bureaucracy and enabling them to access finance.’

Official notes to the speech said the deregulation initiative would ‘ensure that the red tape that affects small businesses is frequently reviewed to make sure that regulations are either cut or remain effective’ and it would ‘place that requirement into law’.

Estimates as to the cost of red tape for SMEs put the bill at £5 billion or more every year, but previous attempts at deregulation have floundered. The Coalition’s ‘one-in, one-out’ rule, aimed at keeping the number of regulations steady, did not apply to European regulations, and the cash value claimed for the resulting cuts in regulations have not been professionally audited.

Access to finance
While it is not yet known how ministers will either set their target or be held to account for it, the ‘access to finance’ aspect of the Bill will build on the Small Business: Great Ambition campaign launched by ministers in the autumn. This announced an extra £250 million of funding for the government’s British Business Bank to support smaller businesses and set a target of unlocking, in partnership with the private sector, £10 billion of SME finance between 2014 and 2018.

A third aspect of the Bill will be the opening of the government’s £230 billion annual procurement budget to tenders from smaller firms, promising ‘fair access’ to public contracts. This has long been the practice in the US, and SME representatives have been calling for something similar in the UK.

The Bill also had good news for businesses struggling with cash flow. This was a pledge to ‘improve payment practices between small businesses and their customers’ – in other words, those larger firms that deliberately pay their bills late.

Entrepreneurial spirit
‘The purpose of the Bill is to build a stronger economy by supporting small businesses as they compete,’ said a government spokesman, adding: ‘The main benefits will be to foster and back the entrepreneurial spirit that thrives in this country, to build on the UK’s reputation as a fair and trusted place to do business and to reduce the barriers that can constrain the ability of businesses to start up, innovate and grow.

Not all of the Bill will be welcome to entrepreneurs and SME managers. Doubtless the higher fines for failure to pay the minimum wage are only right and proper, but will they be accompanied by even more intrusive bureaucratic oversight? Similarly, few could object to making zero-hours contracts fairer, but will this proposal hamper the flexibility of smaller businesses?

All that said, the two key tests will be, first, when the relevant minister tells Parliament what de-regulation target has been set and, second, when the minister reports back five years later – to say, if we’re lucky, that the target has been met.