Small firms are urging the Government to offer incentives to create jobs.
The Federation of Small Businesses warns that more small firms plan to lay off workers in the first three months of 2012.
It adds that, with heavy cuts in the public sector and a steep rise in the number of people unemployed, more job losses by small businesses will make for an extremely difficult labour market.
The FSB is urging the Government to ‘think small first.’
It wants micro firms to be exempt from extensions to flexible working regulations and pay audits and maternity and paternity leave regulations to be simplified.
FSB regional chairman and Sheffield businessman Gordon Millward said: “The beginning of 2012 is beginning to look bleak, with confidence incredibly low and businesses looking to shed staff.
“However, things do not need to be so negative. If the Government makes the right choices and puts action into words we can turn this around.”
Mr Millward says the Government should introduce simple measures that could help to free businesses from the shackle of red tape so they can grow, innovate and take on new staff.