Small businesses issue Budget warnings

Small business groups have urged the chancellor to 'mend bridges' ahead of his Budget announcement on Wednesday.

The Federation of Small Businesses (FSB) is urging Alistair Darling to abandon his plans for an increase in fuel duty and to scrap tax changes that will affect family-run businesses.

In a snap poll of almost 2,500 of its members, the FSB found that 93% reported their confidence in the government had decreased since Gordon Brown's last budget in March 2007. Just 7% said that their confidence had increased or stayed the same.

Meanwhile, the Forum for Private Business (FPB) has said that the UK's small business sector is at a "tipping point", and is at risk of entering "a long period of negative growth".

Citing the most recent research from the Small Business Research Trust, which is sponsored by both the FPB and the FSB, the FPB's chief executive Phil Orford warned of a knock-on effect to the wider UK economy.

"The chancellor needs to wake up to the reality of the situation and be brave by providing support for the cornerstone of the UK's economy," he said. "We are calling for a review of, and at the very least a delay in, the implementation of these additional burdens, given the evidence that smaller firms are already in decline."