Dear Alan

  I promised to write with more detail about Government help for business during my appearance at the Liaison Committee meeting on 12 February.

  Over 60,000 businesses have deferred paying tax after contacting HMRC's Business Payment Support Service.

  The Business Payment Support Service, which was announced by the Chancellor of the Exchequer at the Pre-Budget Report in November 2008, gives businesses the opportunity to pay all their HMRC taxes, including PAYE, National Insurance contributions and VAT through payment timetables which they can afford.

  Other measures to help small, medium and large enterprises are:

—  £1 billion Enterprise Finance Guarantee Scheme launched in January, securing up to £1.3 billion of additional bank loans to small firms with a turnover of up to £25 million;

—  £75 million Capital for Enterprise Fund also launched in January for viable businesses in need of long-term capital; and

—  £l0 billion Working Capital Scheme, securing up to £20 billion of short-term bank lending to companies with a turnover up to £500 million, with an expectation that approvals will commence in the first week of March.

  And from Friday 13 February the Bank of England will start assisting the largest companies increase lending, through a new fund of up to £50 billion to buy up high quality corporate bonds. This Asset Purchase Facility will encourage lending by the large corporate sector by giving them the assurance that they need to increase lending.

  In addition all companies are also benefiting from the cut in VAT and lower interest rates.

  I am copying this letter to Sir Alan Beith and Peter Luff who raised this with me.

Yours sincerely

Gordon

20 February 2009