The Conservative Party has called on the government to allow small and medium-sized businesses to delay paying VAT for six months.

"This is a measure that could be implemented to help cashflow and in some cases prevent companies from going to the wall," said shadow chancellor George Osborne.

"It was right to rescue the banks, because everyone depends on them, but now we need to rescue the real economy and stop jobs being lost and families suffering unnecessarily."

It has also called on local authorities to pay small firms for products or services within 20 days rather than the current 30, and suggested a 1p cut in the rate of employer national insurance for the smallest companies - those with fewer than five employees - for six months.

The party has already pledged to cut corporation tax if they came to power.