Chancellor of the Exchequer Alistair Darling's pre-Budget report promised more help for small businesses in order to make sure the first recession of the new millennium "is slower and shallower".
He expects the UK economy will shrink in 2009 somewhere between 0.75 per cent and 1.25 per cent. This time last year, Darling predicted 2009's growth would be 2.75 per cent, but don't let that cloud your judgement on his prediction that 2010 will show growth of 1.5 to 2 per cent.
Darling said that small and medium firms employ 60 per cent of private sector workers. He said he wished to support SMEs in three ways: equip them for the future; improve their cashflow; and reduce burdens put on them.
Firms will be able to offset losses against profits made in the previous three years instead of just one year.
The government will make available £1bn for small businesses in need of funds. Seven UK banks have asked for access to the £4bn offered to SMEs by the EU. Small exporters will get help with an extra £1bn via Export Credit Guarantees.
Smaller firms will also be able to spread their tax payments, not just VAT, over a longer period.
Empty commercial properties worth less than £50,000 will be exempt from business rates.
In one moment of light relief from Darling's gloomy outlook, Michael "follically-challenged" Fabricant was told to keep quiet by the Speaker.
On the wider economy the Chancellor is bringing forward £3bn in spending from next year to this year - this is for road building, school improvements and improvements in energy efficiency.
He is cutting VAT from 17.5 per cent to 15 per cent for 13 months starting from 1 December. This move, Darling claimed, was the equivalent of putting £12.5bn into the economy. How much of this will be passed onto consumers, and how much they react to it, remains to be seen.
Tobacco, booze and petrol tax will go up to offset the fall in VAT. The new car duties for more polluting vehicles are being phased in more slowly than originally planned. ®