The Federation of Small Businesses (FSB) yesterday launched a major blueprint for stabilising the UK economy, as well as its proposal for a £1 billion Small Business Survival Fund.

Calling on the UK Government to take urgent action to protect small businesses, the FSB is proposing the survival fund replace the Small Firms Loan Guarantee scheme and be boosted by the European Investment Bank.

Commenting on the plans, FSB chair John Wright said: “A lot has been made of the rescue package for big banks, but small businesses are at the heart of our economy, employing just under 60 per cent of the UK’s private sector workforce. A rescue package for small businesses is crucial to shortening the economic downturn and saving jobs.

“Small businesses need innovative and decisive action now as things are hard for them now. The proposed Small Business Survival Fund will, if the Government takes it up, mean that the millions of small firms in this country will survive the hard times and be able to put our economy back on track.”

FSB Scottish policy convenor Andy Willox added: "Access to a Small Business Survival Fund would bolster the Scottish economy and, if complemented by decisive action by the Scottish Government, would help all small firms to trade us out of the current downturn.”

The plans furthermore call for big businesses that do not pay their bills on time to be 'named and shamed' and subsequently fined by Companies House.

The lobby group also suggests scrapping the UK Government's Supply2.gov.uk website in order to ensure small businesses have access to information about public procurement contracts across the country, similar to the Scottish Government's new Public Contracts Scotland website.

Chief executives from the leading UK banks are set to attend a summit with the UK Government today to discuss how to help small firms cope with the ongoing financial crisis.