Lord Mandelson pledged more help for smaller firms
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Britain's new business secretary, Lord Mandelson, has promised to help small and medium-sized businesses.
"We want to help smaller businesses to plan for the difficult times ahead," he told the House of Commons business select committee.
Small firms are to get £350m in aid, amid increasing signs the economy has slowed significantly, said ministers.
Manufacturers' confidence has seen its sharpest fall for 28 years, employers' group the CBI has warned.
Earlier this week, the Ernst & Young Item Club think-tank said the economy had "deteriorated dramatically" in the last three months and was already in recession.
Business aid
Lord Mandelson was questioned by MPs on the Business Select Committee, in his first appearance before them since taking his seat in the cabinet.
He said it was important to ensure those overseas markets remained open for UK business, saying: "We have a very strong productive base in the UK."
"We are on the side of small and medium-sized businesses and understand that they are facing tough times," he said.
As part of its £350m package to help small firms, the government has pledged to pay its own bills within 10 days instead of 30 days.
Announcing the scheme, Skills Secretary John Denham said: "We've got to make sure that small businesses have cash flow."
"So government is bringing forward the payments - to 10 days and that pushes billions of pounds out into small businesses, " he said.
Staff training
The Conservatives have said payroll taxes for firms with fewer than five employees should be cut by a penny - which could save a typical small business up to £600.
They have also said that small businesses should be allowed to defer paying VAT for up to six months.
The government has also announced help for small firms to re-train their staff during the current economic downturn.
This followed research showing that firms which invested in staff training were better equipped to survive a recession.
"We want to make sure that small businesses can get short courses for their employees," Mr Denham said.
Staff training was "demonstrated to improve profitability and make the company more profitable", he added.
"We think that will help hundreds of thousands of people to get skills which are proved to pay back to the companies they work for," he said.
Most firms employing up to 250 people will be able to take advantage of the training package.
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