A new volume-based tax credit for research and development was announced today by the chancellor. To be included in next year's Finance Bill, it was described as a "tax cut to boost innovation". The government will consult further on its details.

The VAT rules will be simplified to help small businesses, which will save up to £1000 a year from an extended flat rate.

From April capital gains tax is to be cut to 20 per cent for assets held for one year, and 10 per cent for those held for two years.

The 10 pence band of corporation tax is to be extended for small businesses.

A new £50 million fund is to be created to help small firms gain access to risk capital - "capital that is often not available from banks," Brown said.

The government is enhancing Enterprise Management Incentives to help smaller companies attract the top level employees they need to maximise growth. Measures to double the gross asset limit for qualifying companies to £30 million will take effect from January 1, 2002.

The government will next month publish a green paper on planning reform following a comprehensive review of the land use planning system.

There will also be £40 million allocated to training pilots backed by the TUC and the CBI.

The government is also publishing draft legislation for an exemption for capital gains and losses on substantial shareholdings and a new regime for providing relief for the costs of intellectual property, goodwill and other intangible assets.