Midland business leaders have welcomed a move that will mean firms with up to 50 staff will soon be exempt from the most troublesome new red tape.

The Department for Business Innovation and Growth (BIS) has said any new regulation will not cover small firms if it is deemed to place a disproportionate burden on them, holding back growth.

The freeze initially covered those with under 10 employees, but has been expanded to cut businesses’ costs and encourage them to grow.

Business minister Michael Fallon unveiled the new move after carrying out a Small and Micro Business Assessment.

Angela Tellyn, of the Coventry and Warwickshire Chamber of Commerce, which recently met a group of regulators to look at ways of cutting red tape for firms, said: “It was clear from the workshop that a range of activities and initiatives were already being undertaken, but that there was a lack of awareness and understanding of this support in the business community.”

Linsey Luke, of the Federation of Small Businesses, said: “The SME Group work is really trying to tackle head on those issues affecting small and medium-sized businesses.”

BIS has pointed to previous successes in cutting red tape, and Mr Fallon cited an example exempting those with under 250 staff from the right to request time to train, a move which saved firms £388 million. He added: “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.”