BANKS are reluctant to lend money, and red tape and regulations are stifling small businesses, trade leaders and company bosses told a Government minister when they met him in Tavistock last week.

The business forum with Mark Prisk, Minister for State for Business and Enterprise, was organised by West Devon and Torridge MP Geoffrey Cox and attended by around 50 members of the business community across the constituency.

The Cornish-born minister, who is MP for Hertford and Stortford and a former businessman, listened to the views and concerns which focused on the need for a fairer system of setting business rates, based on profit and turnover not size of property, cash from rates being ploughed back into the local economy, too much red tape and regulations and better lending opportunities to allow businesses to progress and expand.

Resident of Tavistock Emma Taynton-Young, who recently set up her own PR business, said there were lots of empty business premises in Tavistock but they cost too much in rates.

'I want an office in the town but I only need one desk so I work from home,' she said.

'There are lots of people in the same boat but if business rates were based on turnover or profit rather than square footage, many more people would fill up these empty properties and it would be good for business.'

John Hutchings, of the White Hart in Holsworthy, said his small hotel was not classed as a small business and his business rates were the same as the Co-op supermarket.

Mr Prisk said that in the future there would be greater flexibility for local authorities to discount business rates and not to have to consult first with Whitehall, particularly in areas which needed some regeneration or run-down industrial estates. He also said that more money from business rates would be kept in those areas.

The minister said he was all in favour of Business Improvement Districts, which had been set up in Plymouth and just recently Tavistock, where business communities pay more on their rates to enhance their town and take more control.

He said he was a great believer in letting business communities get on with it rather than having too much input from Government when it was not wanted or needed.

Company bosses talked about how red tape was hampering small business development, describing many 'heavy handed' policies as ridiculous and unworkable, and how many firms were now too scared to employ people because of the increase in industrial tribunals.

There was also criticism over large firms being brought in from other areas of the country to work on Government contracts in Devon when there was vast amounts of local expertise available.

Mr Prisk said the Government was opening up the tendering process so smaller local firms could 'have a crack of the whip.'

He said he wanted to strip away the bureaucracy and simplify red tape, cutting down drastically on the number of regulations in business and taking a partnership approach to enforcement.

'We can change this locally — in the Black Country all the local authorities have one single policy on enforcement. We want local authority and business leaders to work together, face to face. We also want the focus to change from businesses being inspected to supporting them to help them meet the rules.'

In terms of employment law Mr Prisk said the period of time an employee had to work for a company before they could call an industrial tribunal would be taken back to two years instead of one in a bid to stop 'vexatious claims'.

On the issue of banks, Nigel Eadie from Tavistock Chamber of Commerce said banks were not lending money, even to people who had been in business for 20 years.

'How are we supposed to expand or open businesses elsewhere in the region when simply going to a bank and asking for a loan is not on the cards?' he said. 'The banks are risk-paranoid and it is stifling business and employment.'

His comments were reiterated by Nick Henderson, of Mansbridge and Balment estate agents, which has 40 years of history in Tavistock.

Mr Prisk said one of the problems was the loss of the 'local bank manager' who knew good businesses from bad and the need for more competition between banks. He encouraged people to shop around and said there would be more banks coming onto the local market soon.

'Two or three years ago it was a completely different situation and banks were happy to give loans to anyone — that is why we are in the position we are in. It's a pendulum — too lax or too tight and the latter is where we are at the moment.'

The Government recently appointed Mary Portas, one of the UK's leading retail experts, to lead an independent review into the future of the high street.