To help companies with cash flow problems, the chancellor extended the provision that allows loss-making companies to reclaim taxes on profits made in the last three years until November 2010 as well as doubling the main capital allowance rate to 40%.
With the latest figures showing that the unemployment rate has risen to 2.1m the chancellor announced that all long-term unemployed under 25 years of age will be offered a job or training.
An additional £1.7bn of funding will be given to the Job Centre network and funding of £250m will be spent to help people get work experience in growth industries.
Alistair Darling also pledged a "top-up trade credit insurance scheme" that will match private sector trade credit insurance provision if insurers reduce their cover to any UK business.
The credit insurance scheme will provide cover to businesses
operating in the UK for six months. It is hoped that this will protect small firms against late payment and ally fears of a ‘domino effect' of bankruptcies among suppliers due to the reduction or withdrawal of credit insurance.
However, the Budget did not provide automatic rate relief for small firms or give Companies House the necessary clout to use powers within the Companies Act to esnure small firms are paid on time.
"With a quarter of business failures due to late payment and around £38,000 owed to small businesses at any one time, Companies House should have been given more powers to name, shame and fine companies which fail to pay on time. The Government has missed an opportunity to save thousands of businesses and the jobs they create," said John Wright, FSB Chairman.
"We welcome moves to focus on jobs and job creation for young people, but we are very disappointed that this budget will do nothing for those firms which are doing their best to hold on to their valued employees. A Government funded wage subsidy for short-time working would have been a real help but was totally ignored."
