The Federation of Small Businesses has backed proposals by both the government and Conservative Party designed to help small firms survive the economic downturn.

The government has pledged to settle invoices with small businesses within 10 days and to postpone plans to extend the right to request flexible working to parents of older children.

"Increased regulation can impact the growth potential of small businesses so a postponement of changes to flexible working will provide respite for businesses," said John Wright, FSB national chairman.

"We are also pleased with the government's proposal to pay bills to small businesses within 10 days," he added. "To this end we have also written to local authorities urging them to undertake similar measures and to pay their small business suppliers as early as possible."

The Conservatives have proposed a six-month VAT holiday for small firms, a postponement in the increase in the small companies tax rate and a 1p cut in national insurance contributions for those with fewer than five employees.