The Business, Enterprise and Regulatory Reform Secret-ary warned of a "hard road ahead for all of us" but said the Government was determined to do everything it could to help small and medium businesses.

He told a gathering of the city's business leaders: "Businesses everywhere are fighting for cash-flow or credit. Looking for the investment and orders they need to survive. Depending on those businesses are millions of workers in families now trying to stretch household budgets.

"No responsible Government can afford to stand by and do nothing - watching as viable businesses are sent to the wall, jobs lost, talent wasted and revenues to the Exchequer fall, as the costs of unemployment and welfare rise.

"Such exceptional times call for exceptional action, bold new measures to help you get through the worst of this storm."

In its pre-Budget report on Monday, the Government promised £1 billion of targeted tax cuts and £2 billion of loan guarantees to help small and medium enterprises.

Lord Mandelson said: "Here in Sheffield that means a small business facing temporary financial difficulty can spread payment of their tax bills over a timetable they can afford.

"It means a small exporting company can get a Government guarantee for the short-term funds they need to finance their overseas business.
"And it means Government will also step in to help viable small and medium enterprises struggling to get credit, by guaranteeing their loan from the bank."

He added that none of it would have been possible without the help of Yorkshire Forward and other regional development agencies giving advice and support at a grassroots level.

The Made in Sheffield lunch brought together 100 of the city's leading businesses with MPs, including David Blunkett and Angela Smith, for a dinner at the Hilton Hotel yesterday.

Lord Mandelson also subtly contrasted the Government's position with the Conserv-atives, who last week broke off their pledge to match public spending targets after 2011.
He said: "As well as making sure small and medium enterprises weather the downturn, we're doing what no British Government has ever done at such a time - maintaining our investment in high-quality public services."