George Osborne has announced a series of extra measures to help businesses in the tough economic environment.
The chancellor used his Autumn Statement today to declare that the British economy was "healing" despite admitting that it was "taking time".
Despite the fact that the Office of Budget Responsibility predicted a 0.1% contraction in the economy this year, and higher-than-forecast debt levels, Osborne pointed to the creation of 1.2 million jobs in the private sector since the coalition Government came to office.
"Britain is heading in the right direction. The road is hard but we are making progress," he said.
To offer help to businesses, he revealed that the Government-created Business Bank, which is designed to leverage private lending to help small and medium-sized enterprises (SMEs), will receive an extra £1b in capital.
Meanwhile business taxes are also set to be cut further. The temporary doubling of the Small Business Rate Relief Scheme, which had already been extended to April 2013, will now last until April 2014.
From 1 January 2013 and for the next two years, there will also be a 10-fold increase in the annual investment allowance in plant and machinery, so that a £250,000 investment will now qualify.
Corporation tax, which the Government has already been reducing, will drop by another 1% to bring it to 21% by April 2014. Osborne compared this to the 33% rate in France and 29% in Germany.
And the planned 3p per litre rise in fuel duty planned for January has been cancelled altogether.
By Neil Gerrard
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