The business organisation believes the government should place a higher importance on incentivising small firms to grow and innovate.

A proposed growth programme would encompass an extension to the National Insurance Contributions holiday to include firms with up to four members of staff and a cut in VAT to 5 per cent in the construction sector.

Other suggestions include a business-led national mentoring service to be created through the Institute of Enterprise and Entrepreneurs to match mentors with businesses.

John Walker, national chairman of the FSB says: ‘The small business community continues to have a vital part to play in driving a credible recovery and taking on new members of staff to help tackle unemployment, so it is now vital the government puts a small business programme for growth into action immediately.’