Britain takes steps to help small businesses

The government said on Tuesday it would channel more training funds to small businesses and pay small business suppliers promptly to help them through an expected economic downturn.

It said 350 million pounds of a pre-existing training programme would be devoted to training the employees of small businesses over the next three years.

It committed to pay the bills of small business suppliers within 10 days, instead of the previous 30 days, helping their cash flow.

The measures are designed to help small businesses, which are important employers, to withstand an economic slowdown that many economists predict will turn into a recession.

Many small businesses have been hit hard as credit has dried up due to the financial crisis. That has prompted the Conservatives to make proposals to help them and led several newspapers to launch campaigns on their behalf.

The 350 million pounds will be used to train employees of small businesses in business improvement techniques or management, the government said.

"Small businesses are an important engine of our economy and we must make sure that we support them during tough economic times," Skills Secretary John Denham said in a statement.

Three banks that have accepted government funds under a plan to shore up the banking system — Royal Bank of Scotland, HBOS and Lloyds TSB — have pledged to maintain lending to small businesses at 2007 levels.

Ministers have said they will talk to other banks about maintaining credit to small businesses.

Conservative leader David Cameron called on Monday for immediate tax breaks for small businesses as he vied with the government over the best way to deal with the economic downturn.

Cameron said small firms should be allowed to delay making value-added tax payments for six months, and companies with four or fewer staff should be given a one percent cut in National Insurance payments, also for six months.