Following the current spending review, the government plans to help small companies obtain finance through a US-style
funding programme.

Government Response: HM Treasury

Chancellor Gordon Brown said: "We understand that in the global economy the premium is now on inventiveness, entrepreneurship and creativity.

"Britain is now ready for the next round of enterprise reforms and a step change in creating a more dynamic enterprise culture.

"We still know that Britain can learn a lot from America's model of enterprise."

Party Response: Liberal Democrat

Brian Cotter MP, Liberal Democrat small business spokesman, said: "This latest announcement will not mask the fact that many small businesses are still being strangled by Labour’s red tape and a baffling tax system, which is the unhelpful legacy of the Chancellor’s incessant tinkering.

"Small companies will not forget the way the Chancellor pulled the rug from under their feet in the last Budget, by reversing the special tax status he had granted them just two year’s previously.

"By continually giving with one hand and taking away with the other, Gordon Brown is actually creating an unstable environment for small businesses.

"It is no surprise that he has presided over a 20 per cent rise in bankruptcies since 1997."

Forum Response: Institute of Directors

Richard Wilson, business policy executive at the Institute of Directors, said:  "The chancellor's motive for establishing Enterprise Capital Funds is well intentioned and doubtless they will help some firms.

"However, most businesses finance their activities in two main ways: bank finance (loans and overdrafts) and internal resources (their own money, cash flow or retained profits).

"It follows from this that if the chancellor really wants to help as many businesses as possible he should pursue two policies.

"Firstly, he should ensure that fiscal policy is set with the aim of helping the Bank of England to keep the cost of borrowing down.

"Secondly, the chancellor should reduce taxation on businesses. This will leave more money in the hands of owners and managers with which to finance their operations, invest in R&D, spend on training and expand their businesses.

"It is because low taxes are vital for business that the government's commitment to the key conclusions of the Gershon Report is vital.

"The government should vigorously pursue the savings identified in the Gershon report, not just to free more resources for public services but also to reduce the burden of taxation."