In an attempt to regain the voter’s trust, Gordon Brown has assured small businesses that he has every intention of providing tax cuts due to the current economic climate.  Mr Brown also aimed an attack at the opposing party stating that the Conservative party was “refusing to act”.

A spokesman for the prime minister re-iterated afterwards that a plan was in place to aid small businesses that will be affected in Monday’s pre-budget report.

Chancellor Alistair Darling is set to introduce special arrangements for these small businesses ahead of a lending slowdown, aiding small businesses by providing secure finance and insurance.

The plans, dubbed a “credit lifeline”, will be an indication that the £37 billion bank bailout has been unsuccessful and due to this the Government will move to underwrite new loans.

In response to being told that his party is refusing to act, David Cameron snapped back, “On this side of the house we have made our choice. Its called spending restraint.”

However, his argument was met with a strong awareness of the situation, as Gordon Brown replied, “Let me explain to you the difference between monetary and fiscal policy … Everybody in every continent around the world is saying monetary policy is not enough.

“That’s why we need to use fiscal policy. That’s real help for families now,” he said, accusing the Conservative leader of “setting himself against families”.

Chancellor Darling is also expected to declare that an injection of funding will be put into place for a scheme that sees small businesses apply for bank loans that are held up by a 75 per cent taxpayer guarantee.

Last month the Chancellor urged banks to continue lending money and called on them to meet the £53 million level of lending that was reached last year.

This news comes after calls by the Liberal Democratic party to “do more for smaller businesses”.  Nick Clegg, Lib Dem leader, suggested that the use of local councils or post offices could be a more direct way of getting funding to companies struggling in the current economic downturn.

Clegg said, “What we are saying is that there are a number of other ways that we need to explore of getting money back into the economy if the banks are refusing to do so.”

The Federation of Small Businesses agreed with the Lib Dem viewpoint, and national chairman of the FSB stated, we agree with the Liberal Democrat leader that the banks are hiding away from small businesses and that the Government is not exposing the banks enough and insisting that they lend to small businesses.

“Nick Clegg’s ideas for Government lending and for the post offices and for local authorities to get involved with small businesses are refreshing.”

David Cameron asked Gordon Brown if he was willing to support proposals to bring in new institutions to underwrite lending to guarantee borrowers would receive the necessary help.  Gordon Brown, however, said that action had already been taken on this subject and that the Tory party had been opposed to the idea previously.

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